Last week, Amazon founder Jeff Bezos announced that he will step down from his role as CEO later this year. He will be replaced by Amazon Web Services CEO Andy Jassy. For many Americans who don’t have strong opinions about Amazon or its founder, this change will have little impact on how they view the company. But Jeff Bezos isn’t any normal CEO. According to CNBC, he is the second wealthiest person in the world (until recently, he had sat in the top spot for four years). With that kind of wealth and the fame of having founded Amazon, many Americans do have strong opinions about Bezos. Amazon has faced its fair share of criticism over the years for a variety of reasons, but many people have also conflated their gripes about Amazon with objections they may have for Mr. Bezos. Many people see a blurry line between the man and his company. So, with Bezos stepping down, it is worth asking, will this change the way anyone perceives, criticizes, or does business with Amazon?
For the U.S. government and regulators, the answer is almost certainly no. Most, if not all, of the scrutiny that Amazon has faced from the government over the years relates to its operations, including the way it treats its vendors and competitors, its labor practices, and its impact on the environment. None of this is likely to change simply because Mr. Bezos is no longer the acting CEO.
But what about how consumers view the company? That could possibly change. Bezos has steadily become more involved in politics over the years, which can spark negative public sentiment. His politicization was slow in the early days of Amazon, but accelerated in 2013 due to his acquisition of the Washington Post, and then put in hyperdrive over the last four years by his increasingly acrimonious relationship with Donald Trump. Throw in his 2019 battle with the National Enquirer that made public certain details of an extramarital affair and explicit text messages, and Bezos’s public profile became more and more vulnerable. Finally, also in 2019, when Amazon announced it would back out of a multi-billion dollar second headquarters project in New York city, Crimson Hexagon, a social media analytics firm, reported that online sentiment for Bezos reached negative 92%.
However, just because Bezos is stepping down doesn’t mean that consumers will absolve Amazon of the sins they believe it has committed. Firstly, Amazon has also become increasingly viewed as a political entity. The company’s decision to open its second headquarters near Washington D.C. and the fact that it spent $18 million on lobbying in 2020 (a record for the company) reveals that Amazon also views itself as increasingly political. Other decisions made by the company have thrust it further into volatile political waters, such as its move to suspend conservative social network Parler from Amazon Web Services in the wake of the Capitol riot (effectively shutting Parler down).
In fact, the Parler suspension and the backlash that ensued underscores that while Bezos’s departure may be an opportunity for Amazon to shed itself of some of his controversies, there is also a risk. Now, whenever Amazon makes a move that draws criticism, that decision and its blowback belongs directly to the company, and not necessarily Jeff Bezos. And lastly, while Bezos is stepping down as CEO, he is staying on as Executive Chairman of the Board. With Bezos staying so close to Amazon even after Mr. Jassy moves into the CEO’s office, the public is still likely to think quickly about Amazon any time Bezos makes press.
However, is the premise that the public’s perception of Amazon could have an impact on its business flawed? The company’s fourth quarter results, which were reported last week, show that business is booming in spite of any concerns people may have about the company’s track record or Jeff Bezos. Fourth quarter sales increased 44% year-over-year to a record $125.6 billion. But, Amazon’s business last year was strongly fueled by the pandemic, and popular sentiment is moving in the wrong direction for the company. According to CNBC surveys, from 2017 to 2019, public opinion that Amazon is bad for small business rose from 37% to 59%. As the government eyes antitrust actions against big tech, and as ideological divisions in America increasingly politicize virtually everything, Amazon should be careful. It may be the everything store, but at some point, people may conclude that it isn’t for everyone.
Headlines of the Week
CVC Purchasing Shiseido Personal Care Unit for $1.5 Billion
To help reach its goal of becoming the world’s premier prestige beauty company by 2030, Shiseido is selling its personal care business to CVC Capital Partners in a $1.5 billion deal. “The purpose of this transfer is to grow the personal care business, whose business structure is mass market and quite different from the cosmetics business with beauty consultant counseling, by spinning off and establishing a new joint venture independent of Shiseido,” said Masahiko Uotani, Shiseido president and chief executive officer, in a statement. Shiseido’s personal care business, valued at 160 billion yen and including brands such as Tsubaki, Senka, Uno and Sea Breeze, is to be transferred on July 1 from the group in Japan and its wholly owned subsidiaries. Then a new company will be set up, the shares of which will be shifted to the Oriental Beauty Holding Co. Ltd. that will be financed by funds advised by CVC. A joint venture will be established, and Shiseido, with a 35 percent stake, is to act as a shareholder of the company that will operate the personal care business. CVC is to run that company, which could go public.
Uber to acquire Drizly for $1.1 billion
Uber announced that it is acquiring alcohol-delivery service Drizly for $1.1 billion in stock and cash. Founded in 2012, Drizly has become the leading on-demand alcohol delivery service in the U.S. and is available in 1,400 cities. The deal is expected to close within the first half of 2021. It is anticipated that more than 90% of the consideration to be paid to Drizly shareholders will consist of Uber common stock, and the balance in cash. Following the completion of the transaction, Drizly’s marketplace will be integrated with the Uber Eats app, and the Drizly app will continue to exist.
Apparel & Footwear
Asos buys Topshop brands for £330m but 2,500 jobs to go
Online retail giant Asos confirmed it had sealed the deal to buy Arcadia brands Topshop Topman, Miss Selfridge and sportswear brand HIIT for a total £330m ($453.4m). The administrators Deloitte said that Asos will pay approximately £295m for the brands, goodwill and stock on hand, and will also take on certain liabilities for forward committed stock orders. Asos will acquire the brands, intellectual property and inventory, however, excluding the high street foot print of 70 leasehold sites. Approximately 300 employees across design, buying and retail partnerships will transfer to Asos, leaving around 2,500 jobs in the balance. When Arcadia collapsed, it threw the future of 13,000 jobs into doubt. The deal is expected to complete on 4 February and follows the sale of Evans to City Chic on 23 December for £23m last year.
Francesca’s officially sold to stalking-horse bidder
After filing for Chapter 11 bankruptcy protection in December, Houston-based specialty apparel retailer Francesca’s Holdings Corp. is officially under new ownership. The company announced after markets closed Feb. 1 that the Section 363 bankruptcy sale to Francesca’s Acquisition LLC, an affiliate of TerraMar Capital LLC; Tiger Capital Group LLC; and SB360 Capital Group LLC has closed. TerraMar and Tiger served as the stalking-horse bidder going into the Section 363 auction in January. Their original stalking-horse bid was $17 million, but the purchase price was increased to $18 million as a result of the auction. Under the new ownership, Francesca’s will continue to operate its existing headquarters in Houston, its e-commerce channels and at least 275 boutiques, down from 700 as of Aug. 1 and 558 as of Dec. 3. The retailer now has a new $25 million asset-based revolving credit facility provided by affiliates of Tiger and SB360, Tiger Finance LLC and Second Avenue Capital Partners LLC.
Longtime L Brands CFO to retire, but not before Victoria’s Secret spins off
L Brands on Thursday announced major moves within its executive ranks, with Chief Financial Officer Stuart Burgdoerfer planning to retire in August, and Martin Waters, (who since November has led its lingerie business), taking over as Victoria’s Secret CEO. Burgdoerfer was serving in that role in the interim. Burgdoerfer has been at the company for two decades, serving as CFO for the past 14, according to a press release. L Brands said it’s begun its search to replace him and will consider internal and outside candidates. Thanks to strong January results, L Brands also raised its fourth quarter guidance, saying it now expects comparable sales to rise 10% — reflecting a 22% increase at Bath & Body Works and 3% decrease at Victoria’s Secret.
Naked Brand Group Closes $50 Million Registered Direct Offering
Naked Brand Group Limited, a global leader in intimate apparel and swimwear, has announced the closing of its previously announced registered direct offering of 29,415,000 of its ordinary shares at a price of $1.70 per share. The estimated net proceeds to the Company from the Offering are expected to be approximately $46.9 million after deducting the placement agent’s fees and other estimated offering expenses. Naked Brand Group Limited is a leading intimate apparel and swimwear company with a diverse portfolio of brands. The company designs, manufactures and markets a portfolio of 8 company-owned and licensed brands, including Bendon, Bendon Man, Davenport, Fayreform, Hickory, Lovable, Pleasure State and Fredericks of Hollywood.
L Catterton Said to Rival CVC Capital in Race for Birkenstock
L Catterton, the buyout firm with links to the luxury French fashion house LVMH, has joined the race to buy the iconic sandal-maker Birkenstock, according to people familiar with the matter. The firm is competing with private equity group CVC Capital Partners for the German footwear company. A winner could be chosen in the coming months. The Birkenstock family plans to keep a stake in the company after a sale. Birkenstock could be valued at around $5 billion in any sale, Bloomberg News reported earlier in January. Both L Catterton and CVC are still conducting due diligence and there’s no certainty deliberations will lead to a transaction. Birkenstock sold 23.8 million pairs of shoes in the financial year, which helped sales rise 11% to 721.5 million euros ($876 million).
Athletic & Sporting Goods
Rad Power Bikes raises $150 million to grow its electric bike empire
Rad Power Bikes just announced a $150 million investment to expand its retail footprint and improve its maintenance and repair services. It’s one of the largest investments in an e-bike company to date and reflects the growing demand for electric-powered transportation. Investors in this round include Morgan Stanley’s mutual fund, Counterpoint Global; Fidelity Management and Research Company; The Rise Fund, the global impact investing platform managed by TPG; and funds and accounts advised by T. Rowe Price Associates, as well as existing investors like Durable Capital Partners LP and Vulcan Capital. Rad Power Bikes plans on doubling its 325-person workforce by next year, Radenbaugh said, with a heavy focus on research and development. It will also allow the company to accelerate the expansion of its retail and service network, which is already slated to cover 75 percent of US customers by the end of 2021.
German smart fitness equipment company EGYM raises €28 million
German gym equipment startup EGYM has managed to raise €28 million after a year of business cuts and downsized dreams, Handelsblatt reports. The new funding, which comes from previous backers Nokia Growth Capital, Highland Europe, HPE Growth Capital and Bayern Kapital, will help the company survive through the coronavirus lockdowns. Prior to the pandemic, the Munich-based company had over $100 million in funding and was headed toward an IPO. As the crisis took hold, plans for further funding took a backseat as EGYM laid off 100 of its 420 employees. The company makes smart sports equipment for fitness studios and other facilities, and does not sell to private customers. The machines connect not only to EGYM’s digital products but also to third-party fitness wearables and cardio devices.
Cosmetics & Pharmacy
E.l.f. Beauty outperforms mass challengers in third-quarter earnings
The mass beauty category has moderated over the course of the pandemic, but E.l.f. Beauty continues to outperform. In its third-quarter fiscal 2021 results, announced on Wednesday, E.l.f. Beauty said its net sales had increased 10% to $88.6 million for the quarter. Gross margin decreased 0.5% to 64% during the quarter. The company also gained 100 basis points of market share in the color cosmetics segment, per Nielsen. Overall, sales in the mass category improved to -6% for the four-week period ending January 23 from -9% for the period ending January 9. Only E.l.f. and L’Oréal (1%) saw improvement. Coty remained flat at -22%, while Revlon worsened at -30%. “We’re delivering 10% sales growth in a category that’s down 20% in results; that’s E.l.f. continuing to pick up a lot of market share,” said Tarang Amin, E.l.f. Beauty chairman and CEO. Amin attributed the company’s ongoing success to its digitally native roots, its stickiness with consumers and its product innovation pipeline.
Prestige Beauty, Nutrition Will Be Engines of Growth at Unilever
Having survived the chaos of 2020 and grown modestly due to demand for hand gels and other personal hygiene products, Unilever is now hunting for high-growth investments in prestige beauty and nutrition, and focusing on the mega-markets of the future — the U.S., India and China. Unilever’s chief executive officer Alan Jope also wants the consumer giant to be “the global leader in sustainable business,” and a digital powerhouse as the group continues to target underlying sales growth of 3 to 5 percent in the medium term. The parent of brands ranging from Magnum and Domestos to Dove, Pond’s and Kate Somerville reported underlying growth of 1.9 percent and a revenue decline of 2.4 percent to 50.7 billion euros, primarily driven by currency headwinds, in fiscal 2020. Profits were up a modest 0.8 percent to 6.1 billion euros in a tumultuous year that saw entire product categories decline, including personal care (people weren’t shampooing their hair, or using deodorant as often due to life indoors), and ice cream as hot weather resorts and beaches were shut due to social distancing or travel restrictions.
Discounters & Department Stores
Nordstrom leans on off-price, digital to chase customers and profits
During its investors day conference on Thursday, Nordstrom executives shared plans for profitable growth that are partly an expansion of its existing strategy and partly a remarkable departure from how it has historically done business. Most notable is the integration of its off-price Rack with its full-line business, along with an embrace of e-commerce that leaves physical locations — usually the centerpiece for any department store — in a supporting role.
Family Dollar teams up with Instacart for same-day deliveries
As demand for home delivery continues to be strong, Instacart on Thursday announced a partnership with Family Dollar to deliver items from more than 6,000 locations in the U.S., according to a press release emailed to Retail Dive. Users can now order personal care items, electronics, household goods and other essentials through the Instacart app and have them delivered in as fast as one hour, the company said. The partnership is an expansion of a 275-store pilot that began in late 2020 between the two companies.
Sears is closing 13 more stores, further shrinking its footprint
Transformco, the owner of the Sears and Kmart banners, is moving to close more stores after years of steady retrenchment. The company’s job postings from recent weeks list temporary positions tied to store closures at 13 stores, one at a Kmart and the rest at Sears stores. The closures include stores in California, Hawaii, Texas, Virginia, Maryland, Florida, Massachusetts and New York. Spokespeople for Transformco did not immediately respond to Retail Dive’s request for more information. Forbes previously reported on most of the recent closures.
Kohl’s sees holiday-quarter revenue down 10%, but says sales strengthened toward end of January
Kohl’s CEO Michelle Gass said the retailer got a boost at the end of the holiday quarter thanks, in part, to the influx of shoppers coming to its stores to make Amazon returns. The department store chain on Thursday said it anticipates fiscal fourth-quarter revenue to be down about 10% year over year, and same-store sales to drop 11%, but sales have been gaining momentum in recent weeks. Analysts had been calling for a revenue decline of 8.9%, according to a poll compiled by Refinitiv. “You could assume that returns, which typically are higher in January, played a role in driving traffic toward the end of the quarter,” Gass said in a phone interview. Kohl’s accepts Amazon returns at its more than 1,100 locations, the majority of which are located off-mall.
Emerging Consumer Companies
Dame Products, Brooklyn-based sexual wellness brand, raises $4 million
Dame Products, the Brooklyn, New York-based sexual wellness brand, has raised $4 million in funding led by Listen, with participation from Chingona Ventures, The Community Fund, Her Capital, HP Reformation Ventures, and IgniteXL Ventures, along with individual investors. The company, cofounded by “sex expert” Alexandra Fine and mechanical engineer Janet Lieberman-Lu, has previously relied on crowdfunding, raising less than $1.5 million via platforms such as Kickstarter since its launch six years ago. It plans to use the seed funding to expand its team and product assortment, fund research and assemble a clinical advisory board of therapists, herbalists, doctors and scientists.
Rebag launches image recognition tech for luxury bag pricing
Rebag launched Clair AI, an image recognition tool that can quickly identify and assign a price to high-end handbags, according to an announcement emailed to Retail Dive. Users can download the company’s app, available on iOS and Android, and scan their bag against a neutral background to identify the bag’s brand, model, style and price that Rebag would pay for it. If the user accepts that offer, they can generate a free shipping label and mail their item and be paid within two to three days of receipt. Sellers also have an option to drop off their item in person at Rebag’s locations in New York, Miami and Los Angeles to receive instant payment, according to the company. The tool can currently identify more than 15,000 existing references with 91% accuracy. Professional resellers can also access the technology for third-party applications or to integrate with external systems, per the emailed statement.
Grocery & Restaurants
The Senate overwhelmingly passes restaurant relief amendment
The U.S. Senate overwhelmingly passed an amendment to the budget Thursday calling for direct relief to the restaurant industry in a 90-10 vote. The Restaurant Rescue Plan which was initially proposed in a bipartisan effort by Sen. Roger Wicker (R-Miss.) and Sen. Krysten Sinema (D-Ariz.), was based on the original RESTAURANTS Act that was put forth in June. “The Senate made it clear today: it’s time to save restaurants and bars,” Erika Polmar, executive director of the Independent Restaurant Coalition. “There is undeniable bipartisan support across the country for a dedicated restaurant relief fund. The Senate knows that the only way we can fully recover our economy is to ensure neighborhood restaurants and bars can survive and continue employing over 11 million people.” The budget resolution was filed jointly Tuesday by Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi and is meant to provide urgently needed funding for President Biden’s $1.9 trillion American Rescue Plan, which includes “a dedicated grant relief program for restaurants” totaling $25 billion.
Tilman Fertitta takes Landry’s restaurants and Golden Nugget public
Fertitta Entertainment Inc. said it had reached a definitive agreement to merge with Fast Acquisition Corp., which was listed on the New York Stock Exchange in August as FAST, with Fertitta retaining a majority stake in the company, around 60%, and serving as chairman, president and CEO of the company. The transaction values the company at around $6.6 billion. FAST was created by Doug Jacob, co-founder of &Pizza, and Sandy Beall, founder of Ruby Tuesday, with the stated intention of buying a quick-service chain. FAST raised $200 million when it went public, and institutional investors have committed another $1.2 billion to the company, to be purchased as a private investment at $10 per share, once the deal closes, according to Fertitta Entertainment. Houston-based Fertitta Entertainment is the holding company for Fertitta’s assets including Golden Nugget LLC and Landry’s LLC as well as around 31.35 million shares in Golden Nugget Online Gaming Inc., an online gaming company. Landry’s has more than 500 restaurants under brands including Del Frisco’s, Landry’s Seafood House, Bubba Gump Shrimp Co., Rainforest Cafe, Morton’s The Steakhouse, The Oceanaire Seafood Room, McCormick & Schmick’s Seafood, Chart House, Joe’s Crab Shack, and Saltgrass Steak House. Landry’s also operates BR Guest Restaurants based in New York, including Dos Caminos, Strip House and Bill’s Bar & Burger.
Stryve to go public in SPAC deal
Meat snack maker Stryve Foods LLC has entered into a definitive agreement to merge with publicly traded special-purpose acquisition company Andina Acquisition Corp. III. Upon closing of the transaction, the combined company will be renamed Stryve Foods, Inc. and is expected to remain listed on the Nasdaq under the ticker SNAX. Stryve produces air-dried meat products, including South African-style biltong and Latin American-style carne seca. This past December the company acquired Kalahari Biltong. The company’s products are available online and in more than 17,000 retail outlets across the United States and Canada. The company expects to generate about $51 million in 2021 revenue. The transaction values the combined company at approximately $170 million at closing. It will be funded by a combination of cash, a full-equity rollover from existing Stryve ownership and proceeds from a private placement of $42.5 million of common stock at $10 per share that will close upon completion of the business combination. Stryve raised $10.6 million through the sale of unsecured convertible bridge notes that will be funded immediately and convert into common stock prior to closing.
Home & Road
Rent-A-Center reveals preliminary fourth quarter results
Rent-A-Center Inc. revealed preliminary financial results for the fourth quarter and full year 2020 ended Dec. 31, 2020, that show a 5.4% increase in full year revenue and a 13.7% increase in same-store sales for the RAC Business segment during the fourth quarter. Based on preliminary estimates, the company expects total 2020 consolidated revenues to be $2.814 billion, which compares with $2.67 billion in 2019. Prior guidance had estimated full year consolidated revenues between $2.795 billion and $2.825 billion. “We ended 2020 on a strong note, with an expected 5.4% increase in full year revenue supported by an estimated 13.7% increase in fourth quarter same store sales at the Rent-A-Center Business segment and approximately 25% increase in fourth quarter invoice volume for Preferred Lease,” said Mitch Fadel, CEO. On a GAAP basis, the company said it expects to generate $234 million to $241 million in operating profit for the full year 2020.
At Home resumes national growth strategy
At Home Group has opened its first new stores of the year. The value home décor retailer opened three stores on Feb. 3: Nanuet, N.Y.; Johnstown, Col.; and Ocean Township, N.J. At Home will also open a store in San Jose, Calif., later this month. The new additions will give the retailer a total of 222 locations in 40 states by the end of February. The company plans to open 12 to 15 stores across the country this year. “We are thrilled to continue toward our long-term potential of operating 600-plus stores in the U.S.,” said Lee Bird, chairman and CEO, At Home. “Our business has never been stronger and there is enormous growth potential for At Home. With the success of the last three quarters, we continue to take significant market share and emerge as a major winner in the home décor space.” At Home stores average about 100,000 sq. ft. and sell more than 50,000 home décor, from furniture, rugs, wall art and housewares to tabletop, patio and holiday décor.
Culp to purchase remaining 50% of Haiti cut-and-sew factory
Mattress ticking and fabric supplier Culp Inc. plans to buy the remaining 50% interest in its cut-and-sew mattress cover facility in Haiti, which will give the company full control of the operation. In addition, the company has secured a supply agreement with its previous joint venture partner. Culp started production in Haiti in 2018 in an 80,000-square-foot facility. Since that time, the company has invested in additional facilities in the area and recently added 40,000 square feet to manufacture and distribute sewn mattress covers. “We are very pleased with our Haiti operation, which has proven to be an ideal location for our growing sewn mattress cover business,” said Iv Culp, president and CEO. “Through our strategic investments, we have demonstrated our ability to improve our operating efficiencies, and we believe there are additional opportunities within Culp to leverage the production capacity and distribution capabilities from Haiti.” By gaining full ownership at the operation, the company said it will better be able to manage its global cut-and-sew platform.
Jewelry & Luxury
Patek Philippe Stops Production of Popular Watch
Patek Philippe is discontinuing production of its Nautilus reference 5711/1A, which GQ calls “the most coveted watch in the world.” The news was first reported by watch publication Hodinkee. “Rumor has it that the waitlist for the 5711 is (or was) ten years long,” it wrote. A Patek spokesperson confirmed the news but declined further comment. Other Nautilus models are still available. The watches have long been hot items on the secondary market—regularly fetching twice their $33,710 retail price—but Patek’s move will almost surely drive that price higher. At the time of publication, several models were selling for over $100,000 on Chrono24, a secondhand-watch site.
Parmigiani Fleurier Appoints Terreni as CEO
Swiss watch brand Parmigiani Fleurier has appointed Guido Terreni, former president of Bulgari’s watchmaking division, as CEO. He replaces Davide Traxler, the veteran watch executive who was appointed the company’s head in 2018. A company statement said that Traxler has “decided to pursue professional opportunities outside the group.” He has also resigned from the company’s board. Terreni, 51, joined the watchmaking division of the Bulgari Group in 2000, and was appointed president of Bulgari Horlogerie in 2010, serving as its head until 2020.
Kendra Scott Names New CEO as Founder Steps Aside
Kendra Scott has stepped aside as CEO of her eponymous brand, handing the reins to current president Tom Nolan. Scott, who founded the brand in 2002, remains the brand’s executive chairwoman and majority owner. She is now a “recurring shark” on the TV series Shark Tank, and a professor at the Kendra Scott Women’s Entrepreneurial Leadership Institute at the University of Texas at Austin.
Office & Leisure
GameStop names its first-ever chief technology officer
GameStop is beefing up its digital ranks. The video game retailer, which made headlines after a Reddit-inspired short squeeze drove company shares up over 750% in just a week, has appointed Matt Francis to the newly-created role of chief technology officer, effective February 15, 2021. Francis joins GameStop from Amazon Web Services, where he was an engineering leader. He previously held senior-level technology roles at companies such as QVC and Zulily. At GameStop, Francis will be responsible for overseeing e-commerce and technology functions.
Surge Closes Investment Into Ecommerce Chicken Product Designer RentACoop
Surge Private Equity LLC announces its investment into RentACoop LLC and Top Manufacturing LLC, a Maryland-based leading Ecommerce platform that designs and sells hundreds of proprietary products for retail chicken owners across the country. Additionally, the Company offers local chicken coop and hatching rentals for neighboring schools, homes, and families. The transaction closed with debt financing provided by Eagle Private Capital. Since 2012, RAC has established itself as a leading provider of retail chicken products tailored to fit the custom needs of backyard chicken owners and small animal owners across the country. Founders Tyler and Diana Phillips will retain equity in the business with Tyler remaining on as CEO. Surge looks to provide logistical improvements, a renewed focus on new sales channels not currently pursued, an add-on acquisition campaign, and financial reporting and KPI improvements.
Toys ‘R’ Us has closed all its stores — again
Toys “R” Us is closing its only two stores roughly a year after a highly anticipated relaunch of the storied brand. Tru Kids Inc., which bought the retailer in a 2018 liquidation sale, confirmed that its two locations in New Jersey and Texas that opened in late 2019 have permanently closed because of the pandemic. “As a result of Covid-19, we made the strategic decision to pivot our store strategy to new locations and platforms that have better traffic,” a Tru Kids spokesperson told CNN Business. They added that demand for the brand “remains strong” and the company will continue to invest in it. Toys “R” Us’ website remains operational and more than 700 stores outside of the United States are still open. The two stores had a smaller footprint compared to its predecessor that dotted US suburbs. They sold fewer toys and instead focused on interactive and playground-like environments for brands. Ultimately, the plan was to open around 10 of them in malls.
SEC scrutiny delays Roblox stock market listing
Roblox has postponed plans to go public because of the U.S. Securities and Exchange Commission’s scrutiny of how the video game platform recognizes revenue in its finances, according to a memo the company sent to employees. The delay is a setback for one of the most eagerly-anticipated U.S. public market debuts of 2021. The company had said in a regulatory filing earlier this month that it was aiming to list shares on the New York Stock Exchange in February. Roblox’s valuation skyrocketed to $29.5 billion in a fundraising round earlier this month, more than seven times the $4 billion the company was valued at 11 months earlier, amid a surge in the popularity of video games during the COVID-19 pandemic. The SEC has reservations over the way in which Roblox recognizes revenue from the sale of its currency, Robux, on its platform, according to the memo seen by Reuters. The SEC wants Roblox to be more specific and recognize revenue on consumable products as they are consumed, while the durable services will still be recognized over the life of the Roblox user, the memo said.
Technology & Internet
Jeff Bezos to step down as Amazon CEO, Andy Jassy to take over in Q3
Amazon CEO Jeff Bezos will leave his post later this year, turning the helm over to the company’s top cloud executive, Andy Jassy, according to an announcement Tuesday. Bezos will transition to executive chairman of Amazon’s board. Bezos, 57, founded Amazon in 1994 and has since morphed the one-time online bookstore into a mega-retailer with global reach in a slew of different categories from gadgets to groceries to streaming. Amazon surpassed a $1 trillion market cap under Bezos’ leadership in January of last year — it’s now worth more than $1.6 trillion. Jassy joined Amazon in 1997 and has led Amazon’s Web Services cloud team since its inception. AWS continues to drive much of Amazon’s profit.
Amazon earnings: Q4 sales topped $100 billion for the first time
Amazon reported another round of record-setting quarterly results on Tuesday, as consumers still under stay-in-place restrictions turned in droves to the e-commerce platform, especially over the holiday shopping season. Amazon brought in more than $100 billion in revenue for the first time in company history, joining Apple, which crossed that milestone in its own earnings results last week. It also expects to hover over that threshold in the current quarter, and anticipates first-quarter net sales will come in between $100 billion and $106 billion. The company’s core e-commerce portion of the business received a number of boosts at the end of last year, including an ongoing consumer shift to online shopping during the COVID-19 pandemic and sales from Amazon’s blockbuster Prime Day. The event was shifted to October from July this year due to disruptions from the virus. Plus, Amazon said in early December that the 2020 holiday shopping season had been its biggest yet, as customers increasingly purchased goods while restrictions remained in place on travel, dining out and other leisure activities.
Finance & Economy
Jobless claims better than expected last week and lowest in two months
New claims for jobless benefits came in a bit less than expected last week though U.S. employment gains remain sluggish. First-time claims for unemployment insurance totaled 779,000 for the week ended Jan. 30, the Labor Department reported. That was below the 830,000 estimate from economists surveyed by Dow Jones. The reading was the lowest since Nov. 28 as the U.S. economy continues its slow recovery from the Covid-19 pandemic. The total represented a drop of 33,000 from the previous week’s downwardly revised count of 812,000.
Strong consumer spending drove U.S. retail sales growth in January
The new year kicked off with retail gains across nearly all sectors and all 50 U.S. states. Retail sales in the U.S. (excluding automotive and gasoline) increased 9.2% year-over-year, with online sales growing 62.1% compared to 2020, according to Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment. The momentum of a stronger-than-anticipated holiday season continued throughout the month, with consumer spending buoyed by an infusion of stimulus payments, particularly in the first two weeks of the year, the report said. While January brought growth across all 50 states, states in the Southeast and the West are driving the largest increases of total retail sales, according to Mastercard. More outdoor options are available in the warmer Southern states and online sales growth has surged in the Western states.
