I am pleased to join Consensus to help build the firm’s new Beauty and Wellness practice alongside my colleague, Paul Alexander. As these massive categories continue to grow and evolve, I am thrilled to combine Consensus’s strong experience as a leading consumer-focused investment banking boutique with my deep industry passion, expertise, and relationships. I am also happy to be able to partner with leadership teams and lend the perspective of someone who has been in their shoes. Consensus already has advisory and banking experience in the healthy living area of consumer that I will leverage in focusing on the future of beauty and wellness. This future looks bright, but also quite different, and I look forward to connecting with the Consensus community to discuss relevant opportunities.
While inclusivity, efficacy, and sustainability are table stakes for relevance and success in beauty and wellness going forward, I look for the key trends listed below to be areas of focus in the short term:
These are just a few of the important trends in the evolution of personal care we intend to emphasize within the Consensus Beauty and Wellness practice. Please stay tuned for future Big Stories that dive deeper into these important focus areas. It’s an honor to be part of the Consensus team, and I look forward to the opportunity to serve the beauty and wellness community in this new capacity.
Headlines of the Week
Walgreens is mulling a sale of its pharmacy automation business iA, which could fetch up to $2 billion. iA, with global headquarters in Indianapolis, helps big-box pharmacies fill prescriptions. Walgreens announced a majority investment in the company in 2021. It paid $451 million in cash for the majority equity stake, according to a March 2021 filing. The potential sale comes as Walgreens considers shedding non-core businesses to raise cash for efforts including affiliate VillageMD’s $9.8 billion takeover of rival primary care provider Summit Health-CityMD. That deal was announced in November.
Serta Simmons Bedding and 13 of its U.S. affiliates filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas. The company announced the filing at 11:08 p.m. Eastern time Monday evening saying the filing was “voluntary” and “pre-arranged.” SSB has entered into a restructuring support agreement with “key financial stakeholders” to reduce the company’s debt and all the company to “continue making critical investment in its business and brands.” In the filing, the company lists its liabilities at between $1 billion and $10 billion, and its assets as between $1 billion and $10 billion. Owned by Advent International, the company includes two of the mattress segment’s most iconic brands. In addition to Serta and Simmons, online brand Tuft & Needle, acquired in 2018, is also part of the company’s portfolio. According to the company, the restructuring agreement will reduce the company’s funded debt from about $1.9 billion to about $300 million and allow SSB to continue investing in its business. The company has received a commitment for a $125 million exit asset-based lending (ABL) credit line available upon SSB’s emergence from Chapter 11.
Apparel & Footwear
Levi Strauss on Wednesday posted earnings and revenue that topped Wall Street’s expectations. The company’s reported net income for the three-month period that ended Nov. 27 was $151 million, or 38 cents per share, compared with $153 million, or 37 cents per share a year earlier. Sales were $1.59 billion, down 6% from a year earlier. Levi has been grappling with a slowdown in discretionary spending and a reduced demand for denim, leading some analysts to downgrade the stock. The denim brand saw a drop in direct to consumer revenue, which the company blamed on store closures in Russia. Direct to consumer sales declined 2% after Levi closed nearly all of its shops in Russia, a major market for the denim retailer, Levi CEO and President Chip Bergh told CNBC. Still, Levi’s direct channels saw a strong Christmas season and sales increased 10% in November and December compared to the prior year, the company said. Digital sales were also down 7% year-over-year, which the company attributed to a return to stores and a cooldown in online shopping.
Pacsun has named president and board member Brie Olson as its new co-CEO, serving alongside co-CEO Mike Relich, effective March 9. Olson replaces former co-CEO Alfred Chang, who is leaving the Gen Z-preferred fashion retailer after 17 years to join Fear of God as its CEO. He will remain on the Pacsun board. “Culture is dynamic, and so Pacsun must be as well — and that is what I love most about being part of this organization,” Olson said. “I am honored to take on this new role and excited to continue working with Mike and the rest of the fantastic Pacsun team as we make big, bold swings.” With her appointment, Olson joins a growing roster of female CEOs across retail. As of Jan. 1, more than 10% of CEOs leading Fortune 500 Companies were women for the first time since the Fortune 500 list began 68 years ago. As of the summer of 2022, that percentage was closer to 8.8%. Amid a general shakeup across retail, CEO shifts have opened the door for new leaders — often women — to come into the top position, which has been the case at Under Armour, Foot Locker and now Pacsun. Olson joined Pacsun in 2006 as senior design director for women’s. Throughout her 17-year tenure, she has served as chief brand officer, chief merchandising officer and SVP of merchandising and design. She was named president in 2021.
British fashion retailer Superdry expects only to break even this year, it warned after reporting a deeper half-year loss, with the climb down from a previous profit forecast sending its share price plunging by as much as 20%. Its warning cited a 5.2% decline in half-year wholesale revenue because of uncertainty arising from the COVID-19 pandemic, leading an increase in its inventory of older stock. Inflation-pinched British consumers reduced shopping spending last month by the most in at least 25 years, official data showed, dashing hopes of a Christmas boost for the country’s flagging retail sector. However, Superdry reported sustained demand over the Christmas period as store sales caught up to pre-pandemic levels, with revenue rising 24.9% in the nine weeks to Dec. 31. The retailer’s adjusted pretax half-year loss widened to 13.6 million pounds ($16.81 million) from a 2.8 million pound loss a year earlier.
Athletic & Sporting Goods
The Denver-based Alterra Mountain Company owns more than 50 worldwide mountain destinations and recently added another to its portfolio. The massive ski corporation announced the addition of Snow Valley Mountain to the Ikon pass and Big Bear Mountain Resort pass. Now, Snow Valley Mountain will operate in partnership with Alterra’s two other Southern California destinations, Bear Mountain and Snow Summit Resorts. Snow Valley Mountain Resort is one of the oldest continually operating ski resorts in Southern California. It’s also located in the San Bernardino National Forest, just 11 miles from Big Bear Lake.
Strava routes are about to get three-dimensional. The popular fitness social network announced today that it’s acquired Fatmap, a mobile app known for its 3D maps for outdoor sports like hiking, trail running, skiing, and mountain biking. Fatmap has roughly 1.6 million registered users and has raised about $30 million in funding. Once the integration is finished, Strava users will be able to see Fatmap’s high-resolution 3D maps without leaving the Strava app.
The World Golf Report 2023, a study from Golf Datatech and Yano Research Institute, found that the worldwide golf equipment and apparel market grew over the pandemic to reach $20 billion, encompassing the $11.1 billion equipment and the $8.9 billion apparel sectors, respectively. The 2023 report, the 5th edition since 2015, provides a global retail market summary based on geography, size and economic significance. Key highlights showed that worldwide golf equipment and apparel sales were at all-time highs in 2021 to more than $5 billion. Even though the golf business was healthy over the past two years, the data shows it could have been better due to supply chain issues, manufacturing and shipping constraints and the strengthening U.S. dollar which often negated positive sales trends within local markets.
Cosmetics & Pharmacy
Kadenwood announced the acquisition of Probulin, a probiotic and microbiome health brand, for an undisclosed sum. Probulin provides proprietary IP and “cold and protected” delivery to assure maximum efficacy by delivering live cultures. Probulin was formed in 2013 and is based in Topeka, Kansas. Kadenwood was formed in 2019 and is based in Newport Beach, CA. Other wellness brands in the Kadenwood portfolio are Healist Naturals, Purity Organic, Level Select CBD, Purity Preferred, and Social CBD.
An apparent shortage of pharmacists is forcing CVS and Walmart to reduce the hours of its pharmacies, as they close earlier in thousands of locations. Beginning in March, both retailers will either cut or shift the hours that their pharmacies operate in response to staffing shortages and waning consumer demand as the height of the Covid-19 pandemic recedes. Walmart, which has pharmacies in most of its 4,600 US locations, will close them two hours earlier, at 7 pm. CVS will shift or cut hours at about 6,000 US pharmacies.
The distributor of specialty chemicals and ingredients is expanding its beauty, personal care, home and industrial cleaning portfolios with the acquisition of Turkish specialty chemicals distributor Kale Kimya. Terms of the transaction were not disclosed, and the deal comes after Univar Solutions and its German rival Brenntag ended discussions over a potential merger in January 2023.
Discounters & Department Stores
Dollar Tree on Tuesday named Rick Dreiling CEO, effective Jan. 29. The former Dollar General chief will continue to serve as executive chairman. He replaces Mike Witynski, who has been with the company since 2010 and CEO since 2020. Witynski, who led the company during the height of the pandemic, and also oversaw the expansion of Dollar Tree’s pricing to $1.25 for most items, is stepping down from the board and leaving the company. The company’s C-suite saw significant changes in 2022, with a handful of key executives leaving their positions.
Target wants the retail industry to know it’s brought its “Targét” touch to grocery and omnichannel. Ease, joy and affordability are the pillars of the retailer’s framework for differentiating itself to customers, Chief Growth Officer Christina Hennington and Chief Food and Beverage Officer Rick Gomez said during the National Retail Federation’s conference in New York earlier this week. Like other mass retailers, Target has benefited from the initial pandemic years prompting one-stop shopping, as well as recent months-long high inflation placing a renewed focus on value — leading to mass retailers attracting more grocery shoppers and posing bigger competition to traditional supermarkets.
Walmart on Tuesday announced it’s raising pay for hourly employees. The company said the raises will increase its minimum wage to $14 an hour. This move will boost the company’s U.S. average hourly pay to about $17.50 for hundreds of thousands of employees. The company also announced other pay and benefits-related changes this week. They include new, higher-paying positions for employees in Walmart’s auto care centers. Walmart is also adding new college degrees and certificates to its employees’ education program. America’s largest retailer by sales also said that it’s expanding a program that pays for store-based and supply chain employees to earn a commercial driver’s license or CDL. Earning a CDL is an eligibility requirement to become a Walmart truck driver, a position that pays up to $110,000 annually.
Less than two years after HBC split up the e-commerce and brick-and-mortar operations of its retailers, all three businesses are laying people off. On Tuesday, The Bay, the e-commerce company affiliated with Canadian department store Hudson’s Bay, “announced impacts to some corporate roles within the business, reflecting less than 2% of associates,” a spokesperson said by email. Also on Tuesday, a spokesperson for off-pricer Saks Off 5th’s e-commerce site said the company “made changes to streamline our organizational structure,” including “the difficult decision to part ways with associates across various areas of the business.” The spokesperson didn’t immediately reply to a request for more information about how many people are affected. After last week’s report that Saks.com is eliminating about 100 jobs, half in tech, or about 3.5% of its total workforce, a spokesperson for that business on Tuesday confirmed the details.
Emerging Consumer Companies
Dry cleaning robotics start-up Presso has raised another $8 million in funding to further develop its robotic dry cleaning technology. The technology automates the cleaning process and reduces human labor by using robots to handle the cleaning, folding, and sorting of clothes. Presso’s technology is designed to speed up the process and improve the efficiency of dry cleaning operations, which can save time and money for both businesses and customers. Presso plans to use the funding to further develop its technology and expand its operations. The company has already raised a total of $13 million in funding from investors, and it aims to become the leading provider of robotic dry cleaning solutions.
Ebay has invested an undisclosed amount in luxury resale platform Cudoni. Cudoni is a UK-based luxury resale platform that enables customers to easily sell their high-end fashion, watches and jewelry online. The company’s service includes free home collection and valuation, as well as professional photography and listing on the Cudoni website. Cudoni’s proprietary technology and team of experts handle the authentication, pricing, and sales process on behalf of the sellers, making it an easy and convenient way for people to sell their luxury items. With this investment, Cudoni will be able to expand its operations and improve its technology, which will allow it to attract more customers and increase the volume of luxury goods available for resale. The investment from Ebay will also benefit Cudoni by providing access to Ebay’s resources and expertise, which will help it grow its business and increase its reach. The move is part of Ebay’s ongoing strategy to expand its presence in the luxury resale market.
Food & Beverage
Powered by Real Food From the Ground Up continues to expand its salty snack business with the acquisition of tortilla chip brand Food Should Taste Good from General Mills. Terms of the deal were not disclosed. There will be no job losses at General Mills as a result of the divestiture, a spokesperson told NOSH, and no employees will be transitioning to the buyer. Founded in 2006 by CPG executive Pete Lescoe, Food Should Taste Good was acquired by General Mills in 2012. Though the company previously sold a wider assortment of snacks including kettle chips, crackers and pita puffs, it currently offers an array of tortilla chips made in a variety of flavors and with different base grains. Following last year’s exit of long-time backer and co-founder Jason Cohen and his investment firm Halen Brands, Powered by Real Food From the Ground Up has been on an expansion tear, building out a portfolio of salty snacks designed to complement its flagship brand of veggie-enhanced chips, crackers and veggie straws. Late last year the company launched You Need This, a millennial and Gen Z skewing salty snack line, and acquired puffed chip brand Popchips.
Camino Partners is the new name and a newer mission for Equilibra Partners Management, the venture capital firm run by Kind founder Daniel Lubetzky and other Kind alum. Camino Partners will focus on incubating and hands-on work with newer companies, teaming up with like-minded entrepreneurs, helping them start and build new ventures. The current portfolio includes several companies in food and beverage, as well as other spaces. As Equilibra, the firm invested in Greek yogurt brand Ellenos, breakfast and baked snack maker Belgian Boys, organic seaweed brand gimMe Snacks, and insect protein maker Chapul. Egg white chip brand Quevos is part of the portfolio, winning an investment from Lubetzky on “Shark Tank,” as is Lubetzky’s own newest launch, plant-based Mexican food brand Somos, which he started with former Kind colleagues Miguel Leal and Rodrigo Zuloaga. Much like Equilibra before it, Camino Partners is looking at the core leadership of companies to work with, as well as their values, authenticity and a category and culture-shifting edge that can give the brand a boost in marketing and positioning.
Yerba mate company Guayaki has raised $75 million in a funding round, according to a January 13 SEC filing by the company. The filing reflects over half of the company’s $142.8 million offering amount in the equity fundraise, with $67.8 million remaining to be sold. As well, Anthos Capital president Emily White and SBG Growth founder and CEO Robyn Rutledge appear to have joined the company’s board of directors, with both executives newly listed in the filing, Forbes reported. Founded in 1996, Guayaki avoided taking outside investment for more than two decades. But since securing a $6 million raise in December 2017, the brand has significantly scaled its nationwide operations and taken on several more fundraises, closing its fifth venture round backed by CAVU Venture Partners and Swift Foundation in 2020. Guayaki produces a variety of ready-to-drink and bagged yerba mate products, including canned and bottled beverages, and leads the RTD category. According to IRI, Guayaki’s canned and bottled tea drinks were up 10% to over $141 million in retail dollar sales in the 52-weeks ending January 1, 2023.
Grocery & Restaurants
A new supermarket is opening outside Boston, but customers will never set foot inside. Addie’s Grocery on Route 1 has a different model. Customers can order all their food online and pick it up at the store. But unlike apps that hire someone to do your grocery shopping, Addie’s staff does the shopping themselves, so they have full control of inventory. They guarantee everything you order will be in your shopping bag and guarantee no substitutions. Online grocery services offer convenience and can limit impulse-buys, saving money. Those are some of the benefits fueling grocery e-commerce, which has been predicted to double within five years, according to McKinsey.com. And yet, there are challenges. Jim Mcquade, the co-founder and CEO of Addie’s, says our favorite grocery store chains aren’t really designed to run as e-commerce businesses and that customers who shop online might not get the exact type of items they want when they unpack their shopping bag. Even if the order is fulfilled, delivery charges with a tip on top can be steep. Addie’s is looking to address those issues. In a separate press release last week, Addie’s announced this is has raised $10.1 million, including participation from Disruptive Innovation Fund.
The U.S. Department of Agriculture has published new organic product certification regulations that the agency said will deter fraud and improve transparency and product traceability. The Strengthening Organic Enforcement Rule, which takes effect in March but will not be enforced for the first year, “will assure consumers that organic products meet a robust, consistent standard and reinforce the value of the organic label,” the USDA said. Through the National Organic Program (NOP), the USDA Agricultural Marketing Service oversees the administration and enforcement of organic regulations. The NOP has always had strict standards for how products could be certified as organic, but those standards had been created when the organic industry was much smaller and more localized, the agency said. Organic sales are the fastest-growing segment of the industry, with sales surpassing $63 billion in 2021, according to the Organic Trade Association. Fraudulent organic claims are of particular concern, the USDA said, because of high demand for organic products, the absence of direct enforcement over some entities in the organic supply chain, and the incentive for fraud, given the high price premiums for organic food products.
Home & Road
Newell Brands is collapsing its seven business units into three in an attempt to simplify its operating model and save money, the company has announced. The restructuring plan, which is called Project Phoenix, will also eliminate 13% of office positions, and layoffs will begin in the first quarter of 2023. Project Phoenix, which Newell expects to implement by the end of this year, will simplify organizational structure; streamline the company’s real estate; centralize its supply chain functions — which include manufacturing, distribution, transportation and customer service; transition to a unified One Newell “go-to-market” model overseas; and reduce overhead costs, the company said. “These actions are a continuation of the simplification agenda that we have driven over the last four years and in response to the difficult macro environment,” said Newell CEO Ravi Saligram in a release. Newell’s brands include Rubbermaid, Calphalon, Sistema, Yankee Candle, Coleman, Contigo, Oster, Sunbeam and Mr. Coffee, among many others.
Bed Bath & Beyond, now in default on its credit, has added an independent director whose skills are likely to come in handy. The beleaguered retailer’s board of directors notified the Securities and Exchange Commission that on Jan. 24 it appointed restructuring specialist Carol Flaton to the board, effective immediately. She currently has no committee assignments, BBB reported. From 2014 to 2019, Flaton was a managing director at AlixPartners specializing in restructuring and turnarounds, according to her biography at Talen Energy Supply, where she also serves as a director. Prior to joining AlixPartners, Flaton was a managing director in the restructuring practice of Lazard Freres. From 2008 to 2013, she advised debtors, creditors and equity holders engaged in restructurings, debt exchanges, 363 sales, acquisitions, refinancings and capital raises. In a separate filing, Bed Bath & Beyond disclosed that it has received a notice of default and request for immediate payment on its $550 million asset-backed loan with JP Morgan. The company also owes $375 million to lender Sixth Street after expanding its credit facility last August.
Home furniture manufacturer and retailer Bassett Furniture reported $121 million in consolidated fourth quarter sales, a 5.6% gain over last year and a 3% gain over third quarter. Retail sales hit $76.3 million for the quarter, a 14.9% gain from last year’s $66.4 million. Wholesale sales of $74.6 million represented a 1.6% decline from last year. “We posted revenue of $121 million in our fourth quarter, a 5.8% increase against the backdrop of an increasingly difficult macroeconomic environment as we head into another year,” said Robert Spilman, CEO. “Operating profit of $6.7 million was slightly ahead of last year even though we made selected price adjustments designed to reduce inventory that were detrimental to our margins. We also invested more digital marketing dollars to drive our top line. “Our company is stronger than when we entered the pandemic three years ago. We have trimmed our underperforming stores, properly adjusted our retail cost structure, gained wholesale market share with independent furniture dealers and further fortified our strong balance sheet.” Spilman did note, however, that the year is starting off slowly, with the back half of the fourth quarter seeing a decline.
Jewelry & Luxury
The RealReal, which has been looking for a permanent replacement for founder Julie Wainwright as CEO since June, on Wednesday said it has hired John Koryl to take the job as of Feb. 6. Koryl most recently held key digital strategy positions at Canadian retail conglomerate Canadian Tire Corporation. Before that he spent six years at Neiman Marcus, where his focus included omnichannel strategy, per a company press release. Co-Interim CEOs Rati Sahi Levesque and Robert Julian will remain with the luxury resale retailer, Levesque as president and chief operating officer, and Julian as chief financial officer.
Michael Kors has a new CEO after the surprise exit last year of Joshua Schulman, who had been leading the brand and was expected to take on the top post at parent company Capri Holdings in September. Instead, Schulman left the company in March and John Idol remained chief executive at Capri. Now, an executive from sister company Versace is taking on the Michael Kors post. Cedric Wilmotte, who is currently the chief operating officer at Versace, will become Michael Kors’ CEO effective April 3. He has a long history at Michael Kors, spending over a decade running the brand’s Europe, Middle East and Africa division.
Luxury goods group LVMH’s sales rose 9% in the fourth quarter as shoppers in Europe and the United States splurged over the crucial holiday season, helping partly to offset COVID disruptions in China. Sales at the world’s biggest luxury group reached 22.7 billion euros ($24.65 billion) in the final three months of the year, with the 9% increase on an organic basis, a touch above analyst expectations for 7% growth, based on a consensus cited by UBS. That marked a deceleration from the 20% growth recorded in the first nine months of the year, due to the hit in China from lockdowns and its subsequent exit from a zero-COVID policy, which has spurred a surge of infections in the world’s second-largest economy.
We may be heading for a global recession, but there’s one group of people who can’t seem to stop spending — the world’s richest. While retail sales in general have been falling, and the stock market was down by 20 per cent last year, spending on luxury goods and experiences actually grew by roughly the same amount in 2022, as wealthy individuals unleashed their animal spirits. The data, which comes from a new Bain & Company study of the luxury market, challenges much of our conventional wisdom about luxury spending and the rich in general. For starters, last year’s boom in the €1.38tn market was driven almost entirely by Gen Z and Y, who dominated the personal goods market (including luxury clothing, bags, jewelry, etc). “The spending of Gen Z and even the younger Generation Alpha is set to grow three times faster than other generations through 2030,” according to Bain. So much for youthful worries about the materialism of their predecessors.
Office & Leisure
The LEGO Group announced plans to relocate its U.S. headquarters after more than 50 years in Connecticut. Skip Kodak, president of the LEGO Group in the Americas, said the company would be moving from its current office in Enfield, Conn. to Boston by the end of 2026. “Boston is ranked one of the best cities in the world to attract and retain talent,” Kodak said. “We have exciting plans for the next phase of growth and hope we can retain many of our current team, as well as attract new colleagues.” The move is expected to begin in mid-2025 with a phased approach. Employees will work either in the current Enfield office or onsite at the LEGO Education office in Back Bay, Boston until the move is complete by the end of 2026. All employees currently based in Enfield will have a position in the new Boston location and will receive relocation assistance if they choose to make the move. Those who opt to not relocate will be offered job placement assistance and receive financial support. There are currently around 740 people working full-time from the Enfield office.
GameStop informed more employees of layoffs this week, in part related to the closing of its Shepherdsville, Kentucky, distribution center, according to several LinkedIn posts and reporting from local publication WDRB, which obtained a copy of a letter sent to employees. It is unclear how many employees will be impacted. LinkedIn posts from a variety of employees — such as a technical support engineer, a facilities manager and an operations project manager — say they were notified that the Kentucky distribution center will be permanently shut down in June, with their last day at the company being in March. The company opened the 630,000-square-foot Kentucky location in 2016, and a real estate listing updated on Tuesday says it will be available starting July 1 and currently serves as the retailer’s “North American Distribution Hub.”
Toy and gaming giant Hasbro will cut 15 percent of its global workforce in an effort to cut costs and shake up its business model. The company announced the layoffs after underperforming in the fourth quarter and reporting a 9 percent decline in year-over-year revenue for 2022. Hasbro said its Wizards of the Coast division, which publishes the popular Dungeons & Dragons tabletop game, continued to perform well. But its consumer products division struggled over the holidays amid weak demand for toys and apparel. As part of the job cuts, Hasbro President and COO Eric Nyman will step down. The layoffs and other organizational changes aim to save the company up to $300 million over the next few years. The layoffs could be a warning sign that consumers are slowing their spending after an extended period of red-hot inflation hit Americans’ wallets.
Technology & Internet
The U.S. Justice Department on Tuesday filed its second antitrust lawsuit against Google in just over two years. It’s the latest sign that the U.S. government is not backing down from cases against tech firms even in light of a mixed record in court on antitrust suits. This lawsuit, which is focused on Google’s online advertising business and seeks to make Google divest parts of the business, is the first against the company filed under the Biden administration. Google’s advertising business has drawn critics because the platform operates on multiple sides of the market — buying, selling and an ad exchange — giving it unique insight into the process and potential leverage. The company has long denied that it dominates the online advertising market, pointing to the market share of competitors including Meta’s Facebook. In its lawsuit, the Justice Department and the states argue that Google sought to control all sides of the market, realizing “it could become ‘the be-all, and end-all location for all ad serving.’”
Electric vehicle maker Tesla reported Q4 2022 earnings, beating on both profits and revenue. Shares rose more than 5% after hours, after CEO Elon Musk said the company might be able to produce 2 million cars this year. Tesla reported automotive revenue of $21.3 billion in the fourth quarter, representing 33% growth year-over-year. In a shareholder deck, the company acknowledged that average sales prices have “generally been on a downward trajectory for many years,” and said “affordability” would be necessary for Tesla to grow into a company that sells multiple millions of cars annually. In late 2022 and this year, Tesla cut prices on its cars around the world, upsetting customers in the U.S. and China who recently bought new Teslas at higher prices, and triggering an instant decline in used Tesla prices in the U.S. as well. The price cuts seem to have sparked demand, however. Speaking on a call with shareholders and analysts on Wednesday, CEO Elon Musk said, “Thus far in January we’ve seen the strongest orders year-to-date than ever in our history. We’re currently seeing orders of almost twice the rate of production.”
Finance & Economy
The U.S. economy finished 2022 in solid shape even as questions persist over whether growth will turn negative in the year ahead. Fourth-quarter gross domestic product, the sum of all goods and services produced for the October-to-December period, rose at a 2.9% annualized pace, the Commerce Department reported Thursday. Economists surveyed by Dow Jones had expected a reading of 2.8%. Consumer spending, which accounts for about 68% of GDP, increased 2.1% for the period, down slightly from 2.3% in the previous period but still positive.
The housing market is showing early signs of recovery with pending sales of U.S. homes climbing for the first time in a year, according to new data from Redfin. Pending home sales rose 3% in December, the first month-over-month increase since October 2021, Redfin said in a report. There are other indicators that demand is stirring back to life, including bidding wars, more requests for home tours and a growing number of people contacting the brokerage firm to start the home buying process. The interest rate-sensitive housing market has borne the brunt of the Federal Reserve’s aggressive campaign to tighten policy and slow the economy.