Last week, Bed Bath & Beyond announced in its quarterly earnings report that losses were far greater than expected and sales fell by a third compared to the same period last year. This announcement came on the heels of issuing a “going concern” opinion that the business may not be able to operate in the near future due to a lack of liquidity. These warnings seem to come every quarter from the New Jersey-based, home goods retailer and analysts are increasingly worried. For example, in anticipation of last September’s poor quarterly earnings report, Morningstar analyst Jaime Katz asked, “It sort of looks like a decision tree from where it is now, will Bed Bath & Beyond reimagine itself and pull away from the brink, like Best Buy? Or will it continue to patch holes only to keep sinking, like Sears?” For the past few years, Bed Bath & Beyond has been doing enough to survive, but the company is now looking more like Sears, showing signs that it is likely marching towards a Chapter 11 bankruptcy filing.
As recently as 2018, Bed Bath & Beyond was a success: earning more than $12 billion of net sales and operating over 1,500 stores. The company had successfully acquired and operated marquee brands like BuyBuy Baby and World Market and when many of its peer retailers went into bankruptcy after the Great Recession, the company motored along. Bed Bath & Beyond was most successful in its own brick and mortar locations. National leaders empowered local managers to choose what to sell in each store, and this unique approach catered to local customers’ styles and tastes. In addition to receiving their iconic blue 20% off coupon, customers felt a strong connection with their local Bed Bath & Beyond store.
However, factors that eventually led to Bed Bath & Beyond’s decline were at play years prior. In the mid 2010’s, as online shopping expanded and brick and mortar retail softened, companies with strong digital platforms like Amazon, Target, and Wayfair, among others, grabbed Bed Bath & Beyond’s market share. The company spent several years and key internal resources unsuccessfully trying to perfect an online platform that would complement its in-store experience. In the late 2010s, Bed Bath & Beyond’s sales began dropping precipitously and a series of attempted turnarounds began under new CEO Mark Tritton. In 2019, Mr. Tritton arrived at Bed Bath & Beyond from Target with the objective of lowering inventory in stores and pushing private label brands such as Nestwell and Everhome. Still in the infancy of this new strategy, the COVID pandemic broke out and customers, who were almost exclusively shopping online, did not get to experience the company’s new, private label brands. This was a disaster for Bed Bath & Beyond, as the pandemic was a boon for the home goods sector generally, but the company did not grow in 2020.
The past two years after the pandemic broke out have not been any kinder to Bed Bath & Beyond. The company has experienced a wild rollercoaster ride which included: a rise and crash of its stock price, another leadership shakeup, more store closures and job cuts, saddening news of the CFO’s death, inflationary pressures on the cost structure of the business, and the eventual hiring of AlixPartners to restructure the business. With only $153 million of cash and nearly $2 billion in long-term debt on its balance sheet as of the last quarterly filing, the company may have to decide soon whether to file for bankruptcy or sell off all or some of its assets.
Headline of the Week
Subway has retained advisers to consider a potential sale, the Wall Street Journal reported Wednesday evening. Both corporate and private equity suitors are expected during the consideration process, and early estimates value the sandwich chain at more than $10 billion. Subway told the publication it doesn’t comment on ownership structure or plans and is continuing to focus on its “transformational journey.” That journey has been bumpy. The Milford, Connecticut-based, 37,000-some-unit global chain was founded in 1965 by Peter Buck and Fred DeLuca and run by DeLuca until he was diagnosed with leukemia. His sister, Suzanne Greco, took over in 2015 and John Chidsey came on board in 2019, marking the first member outside of the family to lead the company. About 10 years ago, the bloated system began experiencing sharp sales and traffic declines and started to retrench. It has since closed an estimated 2,000 units and has navigated several rounds of franchisee conflicts over issues like the $5 Footlong deal that squeezed margins. In addition to closing underperforming stores, the chain has also undergone several efforts to ignite a turnaround. Since Chidsey came on board in 2019, the chain has restructured its corporate structure, remodeled thousands of stores, launched a new marketing campaign with heavyweights like Tom Brady and Serena Williams, and pulled away from the customizable model its known for in favor of a signature sandwich lineup.
Apparel & Footwear
Crocs has its fair share of skeptics, but the company has been on a tear lately. CEO Andrew Rees said Tuesday at the annual ICR conference that Crocs expects to report record revenues of $3.55 billion for 2022. The footwear company also projects 13% revenue growth this year. Crocs’ namesake brand has become synonymous with comfort and the dozens of colors its clogs come in. Like most sneaker companies, the brand also touts successful collaborations with musical artist Bad Bunny and designer Salehe Bembury. But it’s not the Crocs brand alone that catapulted the company to over 50% revenue growth in 2022. Crocs purchased Hey Dude late in 2021, much to Wall Street’s disappointment. But Hey Dude, a brand beloved by Gen Z, grew 70% and generated about $1 billion in sales last year. About one-third of Crocs company sales are now Hey Dude shoes, according to the company. “The Hey Dude acquisition, we’ve been thrilled with that,” Rees said during the company’s ICR presentation. “When we first bought the company, we indicated we thought 2022 revenues will be between $700 million and $750 million, and now we’re at $1 billion.”
Keds might be a beloved brand, but that wasn’t enough reason for Wolverine Worldwide to keep it in its growing portfolio. “We can’t have any sacred cows, the world is different now,” said Wolverine Worldwide’s CEO Brendan Hoffman, in a fireside chat at the 25th annual ICR conference. He explained the company’s decision last month to sell the well-known, more than 100-year old brand that Wolverine acquired in 2012. “We can’t afford to invest in all these businesses.” Despite his current resolve, the footwear executive, who took the helm of Wolverine at the start of 2022, said he never really planned to unload any brand from the footwear conglomerate, which also owns Saucony, Merrell and Sperry, among other brands. “The thought of divesting a brand was kind of off-limits,” Hoffman said. But as he settled into his role, it became clear that some brands needed more attention than others — and not all had the potential to be winners. He added that while the mergers and acquisitions market has been relatively quiet, Wolverine had “a lot of inbound interest” for Keds which made the decision to sell easier.
Poshmark is officially under new ownership. South Korean internet giant Naver on Thursday closed its $1.2 billion acquisition of the resale marketplace, which was announced in October. With the closing of the deal, Poshmark was delisted from the Nasdaq, according to a company press release. The platform will continue to operate under its existing brand and will still be headquartered in Redwood City, California. Poshmark will also maintain its employee base. Poshmark CEO and founder Manish Chandra said he was “thrilled” to join Naver. “As a part of Naver, we’ll benefit from their financial resources, significant technology capabilities, and leading presence across Asia to expand our platform and enhance our user experience,” Chandra said in a statement. Naver was founded in 1999 and says it operates South Korea’s top search engine and the country’s largest e-commerce platform. The company also offers fintech and cloud services.
A little more than a year ago, Sunrise Brands in Los Angeles acquired three high-end contemporary California labels whose owner had gone bankrupt. The acquisition of the Joie, Equipment and Current/Elliott brands in July 2021 was just one more recent addition to the company’s roster of labels, which now include NYDJ, or Not Your Daughter’s Jeans, bought in 2019; Donald Pliner, acquired in 2020, and Rebecca Minkoff. Now Gerard Guez, the chairman and chief executive officer of Sunrise Brands, formerly called Tarrant Apparel Group, is working with his partner of 42 years, Vice Chairman Todd Kay, to position the labels for major growth while making sure costs are efficient. “When we buy a company, we really try to clean it up,” Guez said. “We’ve developed a knack for that.” Sunrise Brands has a long history of making clothing in China. In 1985, Guez launched Tarrant Co., the predecessor of today’s company, in Hong Kong to manufacture apparel for other companies. By 1988, the company was making and designing exclusively for Limited Express Stores. It has also manufactured merchandise for retailers including Chico’s, Walmart and Kohl’s and still produces about 75 percent of its goods in China.
Athletic & Sporting Goods
Kinzie Capital Partners LP, a Chicago-based private equity firm, announced that through an affiliated entity it has acquired GT Golf Holdings, Inc., headquartered in Vista, CA with additional locations in Fort Worth, TX and Mount Pleasant, SC. The transaction was completed in partnership with the Company’s management, including President Brian Van De Veere, Chief Operating Officer Gary Anderson and Vice President of Sales and Marketing Patrick Coughlin, who will continue to hold key management roles at the Company. GT Golf was founded in 1995 and offers a wide breadth of consumable products, including golf grips, accessories and tees, sourcing more than 3,000 SKUs from over 150 vendors in addition to 300 Company-owned proprietary products.
Liverpool F.C.’s former uniform supplier has become embroiled in a legal dispute that mirrors the one that it had with the Reds back in 2019. According to Italian sports business website Calcio e Finanza, via Sports Pro Media, New Balance, who was Liverpool’s kit supplier from 2015 to 2020, is taking legal action against Italian side AS Roma over the intention of the Serie A club to link-up with a different kit manufacturer, Adidas, from the 2023/24 season. Boston-based New Balance signed a multi-year deal with the Serie A outfit in 2021 in a deal reportedly worth €3m to €4m per season but, according to financial statements from AS Roma, New Balance initiated arbitration before the International Chamber of Commerce against the Giallorossi club in June 2022.
Naish, the legendary Maui-based company of 24-time windsurfing world champion and pioneer of Stand Up Paddling, Kiteboarding, and Wingsurfing Robby Naish, has been acquired by Kubus Sports, a Netherlands-based internationally leading sports equipment brands platform. With the acquisition of Naish, a leading brand in water sports equipment, Kubus Sports strengthens its global market position within the fun & water sports industry. Kubus Sports, founded in 1970 and headquartered in the Netherlands, is an owner and value-added distribution platform for premium quality sports equipment brands, covering various niche sports markets, including STX, Prolimit, Storm, Ohana, Brabo Hockey, Brabo Padel, STX Snow, Atom and Princess Hockey.
Cosmetics & Pharmacy
CVS Health is reportedly exploring an acquisition of Oak Street Health, which runs primary care centers for Medicare recipients, according to a Bloomberg report. Citing people familiar with the matter, the report noted that talks are ongoing and a deal could be reached within weeks. The deal would value Oak Street at more than $10 billion, including debt. However, the talks could cease without an agreement, the report noted. According to Oak Street Health’s website, the company specializes in caring for older adults, and provides “personalized primary care so you can stay healthy and focus on doing the things you love.” Last year, CVS Health held discussions to buy health-care provider Cano Health. In September, CVS agreed to buy Signify Health, a leader in health risk assessments, value-based care and provider enablement. With a network of more than 10,000 clinicians across all 50 states and a nationwide value-based provider network, combined with its proprietary analytics and technology platforms, Signify Health is improving patient engagement, patient outcomes and care coordination for stakeholders across the healthcare system, CVS Health said. That deal is expected to close in the first half of 2023. A spokesperson contacted by Drug Store News said the company doesn’t “comment on rumors or speculation.”
L’Oréal has taken a minority stake in temporary tattoo-maker Prinker Korea Inc. The world’s largest beauty company said in a statement Monday that the investment into the South Korea-based company was made through the corporate venture fund BOLD Business Opportunities for L’Oréal Development. Financial terms of the deal were not disclosed. Prinker Korea, which launched in 2015, invented and manufacturers the world’s first digital temporary tattoo device “with a goal to inspire consumers and offer new tools for self-expression,” according to L’Oréal. Prinker’s temporary tattoo device is compact and light, enabling the creation of durable yet easy-to-wash-off tattoos in color or black-and-white, at home or in store. On the Prinker app, it’s possible to choose a tattoo from among more than 12,000 designs. People may create their own drawings on the Prinker app, too, which are then made into tattoos.
Makeup brand Morphe announced that it will close its 18 U.S. stores to focus on selling through its website and wholesaling to retail partners including Target and Ulta. “We have made the difficult decision to close all Morphe stores in the U.S. We are forever grateful to our store teams for their passion, talent and dedication over the years,” the company said in a Twitter post. A company spokesman told Women’s Wear Daily that the company believes the shift will position Morphe to “better compete in the broader beauty landscape and more efficiently reach our customers where and how they shop.” Some makeup artists and other Morphe users said on social media that they were only given a day’s notice about their local store’s closing, per WWD. Morphe is part of Forma Brands’ portfolio, which also includes Playa Beauty, Lipstick Queen, Bad Habit and Jaclyn Cosmetics. Private equity firm General Atlantic acquired a controlling stake in the company in 2019. Eric Hohl, formerly president of Too Faced Cosmetics, took over as chairman and chief executive officer in March 2022. Anonymous sources told WWD in October that the company was considering filing for Chapter 11 bankruptcy, and a Forma Brands spokesperson said it was “engaged in constructive discussions with our financial stakeholders regarding ways to strengthen the company financially.”
Discounters & Department Stores
Walmart will offer its store fulfillment technology and local delivery services to other retailers on Salesforce Commerce Cloud, the companies announced Thursday. Both Walmart GoLocal, the retailer’s same-day delivery offering, and Walmart Commerce Technologies Store Assist, which helps optimize in-store fulfillment, will be available through Salesforce AppExchange in the spring, Walmart executive Anshu Bhardwaj said during a conference call. “With the help of Salesforce, we are packaging everything a retailer could need to manage local fulfillment and delivery,” said Bhardwaj, senior vice president of technology strategy and commercialization at Walmart Global Technology. She declined to provide specifics on customer pricing.
In a closely watched holiday season, Five Below CEO Joel Anderson said the discount retailer had “no surprises” during the period, which helped to push its sales up 11.2% to just over $1 billion. “We didn’t see the lull in the middle of December that we’ve seen several years,” Anderson said in a discussion at ICR on Monday. For the fourth quarter overall, Five Below is now guiding toward the high end of its previous forecast and Anderson said the company was “very pleased with what we saw.” Even macroeconomic headwinds including inflation and a potential recession work in the discounter’s favor “because it’s all about value,” Anderson said.
Macy’s lowered its Q4 guidance on Friday, saying it now expects sales to land at the low to middle point of its previous estimate of between $8.2 billion and $8.4 billion. End-of-quarter inventories look to be “slightly below last year and down mid-teens relative to 2019,” the department store also said in a press release. “Based on current macro-economic indicators and our proprietary credit card data, we believe the consumer will continue to be pressured in 2023, particularly in the first half,” Macy’s CEO Jeff Gennette said in a statement.
Emerging Consumer Companies
Born out of founder and CEO Jesse Margolis’ desire to share a humorous conversation he overheard in a Los Angeles grocery store in 2015, ‘Overheard’ has grown into a brand platform whose handful of accounts, dedicated to overheard conversations in major metropolitan areas across the US, has roughly 5 million followers. This week, the brand was acquired by Doing Things Media, the parent company to several viral Instagram accounts including Recess Therapy, Animals Doing Things, and Middle Class Fancy. Doing Things Media raised a $21.5 million Series A round in February 2022, led by Volition Capital, and is positioning itself as a platform for the internet’s favorite creators and brands. “We’ve found success building niche communities,” Doing Things Media CEO and co-founder Reid Hailey said. “Overheard fits seamlessly into our portfolio, allowing us to expand into new content verticals while providing the Overheard brand with the infrastructure required to rapidly scale with new opportunities on and off social media.”
Co-founded in January 2022 by YouTube stars Logan Paul and KSI (who have a combined 50 million subscribers), PRIME initially launched with two hydration products, selling direct-to-consumer and through a network of mass, grocery, and specialty retailers in the US, Canada, and the UK. PRIME was launched in partnership with a Kentucky-based supplier and distributor, Congo Brands, which specializes in partnering with celebrity influencers to create and launch brands such as Alani Nu and 3D Energy. The products’ launch was met with fanatical demand, with PRIME hydration resale values skyrocketing to as much as $120 a bottle ($2.50 at retail), and sales of the hydration beverage and sticks surpassed $50 million in sales through October 2022. Last week, the brand launched its newest product, PRIME Energy, in five flavors. The product quickly sold out on the brand’s website. Paul noted in a press release, “we launched PRIME with one product line exactly one year ago and we’ve already grown to surpass some of the biggest players in the industry…It’s been surreal to see our growth and now that we’re taking on the energy space, I’m excited to see where we can go.”
Food & Beverage
Sovos Brands sold pancake and waffle mix brand Birch Benders and related assets to Hometown Food Company. The terms of the deal were not disclosed. Todd Lachman, Sovos president and CEO, said the divestiture will allow the company to focus more on its “core” Rao’s and Noosa Yoghurt brands and create “a more focused business that is better-positioned to drive sustainable sector leading growth.” The divestiture comes more than two years after Sovos, which was built on acquisitions, purchased Birch Benders to add to its portfolio of “one-of-a-kind” disruptive brands specializing in premium foods. Birch Benders watched sales tumble following the loss of a major customer. The brand also is seeing additional competition in the slowing keto diet space where it is popular, and a larger-than-expected decline in waffle and pancake consumption following the COVID-19 boom. Sovos wrote down the value of Birch Benders by $42 million last August.
Modelo and Corona brewer Constellation Brands said the company plans “more muted” price increases in its current fiscal year after recent hikes slowed demand. Constellation CEO Bill Newlands told Wall Street analysts on an earnings call last week consumers are “overly sensitive to pricing actions” and that company needs “to be careful in balancing our growth profile and our pricing profile.” While beer has shown signs so far of being immune to price increases affecting the broader economy, Constellation’s remarks show consumers are scaling back on purchasing their favorite brews or turning to lower-priced offerings in order to save money.
Slate Milk closed a $10.5 million funding round that will fuel the brand’s national distribution efforts and support the launch of a new product in coming weeks. The Series A funding round was led by a private investment from the family office of Boston-based venture capitalists Rob Smith, Jimmy Berylson and Brian Knez (Smith and Knez are also founders of venture firm Castanea Partners which did not contribute to Slate’s financing). Additional capital came from previous investors Riverpark Ventures and Spacestation Investments. The new raise was rounded out by a host of influencers, athletes and food and beverage entrepreneurs. Launched in 2019 by Manny Lubin and Josh Belinsky as a lactose-free, better-for-you chocolate milk brand positioned to adults, the company raised about $5 million in a 2021 rolling seed round. To date, Slate has raised roughly $16 million.
Grocery & Restaurants
Albertsons said inflation helped drive same-store sales gains of 7.9% in the third fiscal quarter, but higher costs put some pressure on margins. The Boise, Idaho-based company said net income for the 12-week period that ended Dec. 2, 2022, was down about 11.5%, to 375.5 million, compared with the year-ago third quarter, when the company realized several one-time gains. Revenues for the recently ended quarter were up 8.5%, to $18.2 billion, including a 33% increase in digital sales. The cost of fulfilling those sales had a negative impact on profitability, however. The company said its gross margin rate fell to 28.2% of sales during the quarter, compared with 28.9% a year ago. Excluding the impact of fuel and last-in first-out (LIFO) inventory expense, the gross margin rate decreased by 47 basis points. Albertsons attributed the decline primarily to increases in product, shrink and supply chain costs, a decline in COVID-related revenue due to administering fewer vaccines, and increases in picking and delivery costs related to the growth in digital sales. These costs were partially offset by increased COVID at-home test kit revenue and the benefits of ongoing productivity initiatives.
After completing the acquisition of Anthony’s Coal Fired Pizza in Nov. 2021, BurgerFi International now sees the opportunity to add more brands to its portfolio, CEO Ian Baines said during the company’s presentation at the ICR conference in Orlando on Monday. Though no further details were given on what categories the Fort Lauderdale, Fla.-based burger chain might be looking into to expand its reach, Baines emphasized the success of consolidating the 60 Anthony’s locations into its portfolio, citing the $2 million in back-office synergies both companies were able to create. “We wanted to take BurgerFi, which had from a consumer acceptance perspective, has a strong offering and very distinct brand, and drive growth in that brand,” BurgerFi CFO Michael Rabinovitch said during Monday’s presentation. “The acquisition of Anthony’s at the time was opportunistic. Given that they were recovering, and it was an acquisition that we bought from private equity we look at inorganic growth as an opportunity now […] to look at brands for more acquisitions.” In fact, currently Anthony’s is outperforming its parent brand as BurgerFi’s same-store sales have slumped, and three-quarters of the company’s P&L is from Anthony’s (which was fully corporate-owned, as compared with BurgerFi’s robust franchising program).
Home & Road
The industry’s largest mattress retailer is withdrawing its planned initial public offering one year after filling its request. Mattress Firm, in a filing with the U.S. Securities and Exchange Commission, said it was no longer proceeding with the IPO at this time. The news follows last month’s announcement that Steinhoff International, the retailer’s parent company, was restructuring its 10 billion euro debt with key lenders. In the withdrawal request, Mattress firm said the decision is “consistent with the public interest and the protection of investors.” The retailer filed for an IPO Jan. 7, 2022, saying it planned to sell $100 million in shares. The 200-page prospectus detailed the company’s 2021 revenue of about $4.4 billion and a net loss of $165.1 million. The document was later amended Feb. 8. With more than 2,400 locations, the company cited liabilities in its original filing of $3.5 billion and long-term debt of $1.2 billion as of September 2022 when it secured a new credit agreement with Barclays Bank and other financial institutions. Mattress Firm was acquired by Steinhoff in 2016 in a $3.8 billion deal. Two years later, in 2018, the retailer filed Chapter 11 and shed leases for unprofitable stores.
The losses widened for troubled retail brand Bed Bath & Beyond during the third quarter of fiscal 2022. The sagging earnings come during a week of rough news for the Union, N.J.-based home goods retailer. In a filing with the SEC last week, it expressed doubt about its ability to continue operations without pursuing alternate strategies, and Reuters reported that the beleaguered retailer might begin skipping debt payments coming due Feb. 1 as it prepares for a bankruptcy filing. For the three months ended Nov. 26, the retailer reported net sales of $1.259 billion, down 33% from $1.878 billion over the same period in 2021. Year-to-date, Bed Bath & Beyond’s net sales total $4.160 billion, down 28.5% from $5.816 billion through nine months of FY 2021. By channel, comparable sales fell 31% in stores and 33% via e-commerce compared to the same three months of 2021. The company posted a net loss of $392.966 million in the quarter, or a decrease of $4.33 per diluted share, compared with a loss of $276.429 million in Q3 of 2021, or a decrease of $2.78 per diluted share.
Jewelry & Luxury
Whether it’s calf-leather Italian Prada bags or classic, checkered British Burberry trench coats, South Koreans are the world’s biggest spenders on personal luxury goods per capita, Morgan Stanley said. The investment bank estimated South Korean total spending on personal luxury goods grew 24% in 2022 to $16.8 billion, or about $325 per capita. That’s far more than the $55 and $280 per capita spent by Chinese and American nationals, respectively, according to Morgan Stanley estimates. Luxury brands have also highlighted strong sales in Korea. Moncler said its revenue in South Korea “more than doubled” in the second quarter compared with before the pandemic. Cartier-owner Richemont Group said Korea was among the regions where sales grew by double digits in 2022, compared with both a year and two years ago.
LVMH on Wednesday announced “significant organizational changes,” effective Feb. 1. Jewelry brands Tiffany, acquired two years ago for $16 billion, and Repossi have also joined the Watches & Jewelry Division, led by Stéphane Bianchi, per a company press release. Christian Dior Couture chief Pietro Beccari will be CEO of Louis Vuitton, succeeding Michael Burke. After 10 years leading Louis Vuitton and more recently “guiding the successful integration of Tiffany,” Burke will have unspecified new responsibilities, reporting directly to CEO Bernard Arnault. Delphine Arnault, who has supervised Louis Vuitton product since 2013, succeeds Beccari as Christian Dior Couture chairman and CEO. Charles Delapalme, who has led Dior’s commercial activities since 2018, will be managing director of Christian Dior Couture.
Jamie Singleton has been named president and chief consumer officer of Signet Jewelers, part of a larger executive reshuffle that involves leadership changes at Zales, Kay, Jared, Peoples, and Banter by Piercing Pagoda. Gina Drosos remains Signet’s CEO. Singleton, who has been with Signet since 2010, most recently served as president of Kay, Zales, and Canadian brand Peoples. Her ascension has led to reshuffling at the top of Signet’s leading banners. Bill Brace has been promoted to president of Kay Jewelers. Brace was previously president of Jared. Since taking over Jared in 2018, sales have grown 22%, Signet said.
Office & Leisure
Spin Master, a global children’s entertainment company, has announced it has reached an agreement to acquire the Hexbug brand of toys from the toy company, Innovation First International. “Spin Master is the business that can really take our years of foundational tech toy innovation to the next level and gain an even greater awareness for the brand here at home and around the world,” says Tony Norman, chief executive officer, Innovation First International. First entering the market in 2007, Hexbug products feature robotic technology with movement inspired by nature. The line includes more than 100 toys ranging from buildable playsets to battling robots. Expected to close in February, the acquisition of Hexbug marks Spin Master’s 28th acquisition since the company was founded in 1994 and the 18th since its initial public offering in 2015.
The Walt Disney Co. on Wednesday said former Nike CEO Mark Parker will become chairman of Disney’s board. The move will be effective on the date of Disney’s annual shareholders’ meeting, which has not been announced yet. Parker, who’s been on Disney’s board for seven years, also serves as executive chairman of Nike. He will succeed Susan E. Arnold, who isn’t standing for reelection because of the board’s tenure policies. The move comes less than two months after Bob Iger returned as Disney’s CEO. “Mark Parker’s vision, incredible depth of experience and wise counsel have been invaluable to Disney, and I look forward to continuing working with him in his new role, along with our other directors, as we chart the future course for this amazing company,” Iger said in a news release. Parker served as CEO of Nike from 2006 t0 2020, a period of enormous growth for the sportswear brand.
Technology & Internet
Amazon said Tuesday it’s expanding a service that lets merchants add the vaunted Prime badge to products on their own websites. The Buy with Prime program, first announced last April, allows Prime members to check out on other retailers’ sites using their Amazon account and receive free, two-day delivery. The service launched as an invite-only program, but will become available to all U.S. sellers by Jan. 31, Amazon said. The e-retailer also announced a new add-on to the program that lets merchants show reviews and ratings from their Amazon listings on their sites. The wider rollout of Buy with Prime comes as Amazon confronts slowing sales growth and an extended stretch of economic uncertainty, prompting CEO Andy Jassy to take a close look at the company’s expenses and execute the largest round of layoffs in its history. Amazon is now under pressure to find new revenue streams as its retail and cloud computing businesses have struggled to maintain the rapid expansion investors grew to expect, especially at the height of the pandemic. Amazon did not disclose how much it charges merchants to use Buy with Prime. The company said pricing includes fulfillment and storage fees, which can differ depending on the sellers’ inventory. Amazon’s third-party marketplace has become the centerpiece of its dominant e-commerce business, accounting for more than half of its retail sales.
Tesla has slashed prices globally on its electric vehicles by as much as 20%, extending an aggressive discounting effort and challenging rivals after missing Wall Street delivery estimates for 2022. The move marks a reversal from the automaker’s strategy over the last two years when new vehicle orders exceeded supply. It comes after CEO Elon Musk warned that the prospect of recession and higher interest rates meant it could lower prices to sustain growth at the expense of profit. Musk acknowledged last year that prices had become “embarrassingly high” and could hurt demand. Shares ended down 0.9% after falling as much as 6.4% on Friday. Last year, Tesla stock had its worst year since the company’s inception due to slowing growth in China and Musk’s distraction with Twitter. Tesla lowered prices across the United States, Europe, the Middle East and Africa, following a series of cuts last week in Asia, in what analysts saw as a clear shot at both smaller rivals that have been bleeding cash and legacy automakers aggressively ramping up electric vehicle production.
Finance & Economy
Inflation closed out 2022 in a modest retreat, with consumer prices in December posting their biggest monthly decline since early in the pandemic, the Labor Department reported. The consumer price index, which measures the cost of a broad basket of goods and services, fell 0.1% for the month, in line with the Dow Jones estimate. That equated to the largest month-over-month decrease since April 2020, as much of the country was in lockdown to combat Covid. A steep drop in gasoline was responsible for most of the monthly decline. Prices at the pump tumbled 9.4% for the month and are now down 1.5% from a year ago after surging past $5 a gallon in mid-2022.
American industry leaders are pessimistic about global economic growth for the year ahead. Three-quarters of CEOs surveyed by accounting and consulting firm PwC expect global economic growth to slow over the next 12 months. That compares to last year, when 77% of CEOs expected positive global growth. Their pessimism is driven by Russia’s invasion of Ukraine, which sparked Europe’s biggest land war since World War II, resulting in rising energy and commodity prices, and increased labor costs and inflation. CEOs’ confidence in their own companies’ growth prospects is also as low as it’s been since 2009, according to PwC, which surveyed more than 4,400 CEOs globally. Business leaders are expecting a dramatic reshaping of the business environment over the next 10 years that will require significant changes to their operations.