The Weekly Consensus

A Surprise Path Beyond Bankruptcy

Betsy White

It’s not often that you hear about a retail business that everyone thinks is about to file for protection under the US Bankruptcy code, but at the 11th hour sells $225 million in stock, allowing the company to operate outside of bankruptcy, at least for the time being.  Surprising most of us, that is exactly what happened in the case of Bed Bath & Beyond (BBBY) last week.

Underwritten by B. Riley Securities, the ultimate buyer of most of the $225 million of convertible preferred stock (plus warrants) offered by BBBY is Hudson Bay Capital, a $19 billion hedge fund.  Hudson Bay Capital is not related to the retail company known as Hudson’s Bay Company or HBC, the owner of the retail chains Saks Fifth Avenue, Hudson’s Bay and Saks Off 5th.  BBBY hopes to raise another $800 million via subsequent sales of securities related to the initial offering, subject to meeting certain conditions.

The ultimate use of the new liquidity per the Company is “rebalancing the Company’s assortment and building back the Company’s inventory.” In the immediate term, the Company will use the $225 million in equity proceeds, along with an additional $100 million commitment under its FILO loan facility, to pay down the Company’s revolver along with paying $25 million in overdue interest on its senior bonds no later than March 3.  In paying down the revolver balance, the Company has also agreed to reduce the commitment under this facility from $1 billion to $565 million, reflecting in part the closure of over 400 stores. Store closures include the wind down of the Company’s 54 store operation in Canada via the Canadian Chapter 11 bankruptcy equivalent referred to as CCAA.  In exchange, the revolving lenders have agreed to continue to provide loans under their facility subject to a borrowing formula.

Putting aside the herculean financial restructuring accomplishment, the Company is now tasked with perhaps the most difficult part of the turnaround.  Over the last few years, sales have been on a downward trajectory, hastened by the failed strategy of focusing on private label products versus third party brands.  Since the former CEO and architect of the private label strategy left in mid-2022, the Company has attempted to pivot back to a higher third-party brand assortment.  However, liquidity issues dogging the business have made it difficult to procure the right inventory, which has further fueled the sales decline.

The investors in the latest convertible preferred stock offering seem to have signaled support for the current BBBY management team and their ability to turn around the business.  Many stock analysts remain skeptical, and even the Company warned that a bankruptcy filing is still possible.  Hedge funds are risk takers and traders at their core, investing with risk mitigation strategies and reward scenarios that are designed to protect their downside and provide for large upside returns if the investment is successful.  Customers, suppliers, associates and lenders alike are aligned with Hudson Bay Capital’s desire to hit a home run with this investment, which can provide a path that avoids bankruptcy court restructurings for similar deals in the future.

Headline of the Week

Post Holdings entering pet food market

Post Holdings, Inc., is acquiring several pet food brands and manufacturing assets from the J.M. Smucker Co. for approximately $1.2 billion. The acquisition will give Post a compelling entry point into the growing pet food category, according to the company.  Brands to be acquired include Rachael Ray Nutrish, Nature’s Recipe, 9Lives, Kibbles ‘n Bits and Gravy Train. Combined the brands generated sales of $1.4 billion in the year ended April 30, 2022, Post said.  Manufacturing assets to be included in the deal are processing plants in Lawrence, Kan., and Meadville, Pa., and distribution facilities in Bloomsburg, Pa.  Once the acquisition is completed, Post Holdings plans to create a new pet food platform within Post Consumer Brands. Nicolas Catoggio will continue in his role as president and chief executive officer of Post Consumer Brands and will see his responsibilities expand to include management of North American ready-to-eat cereal and peanut butter as well as the new pet food business.



Apparel & Footwear

Designer Brands Acquires Keds From Wolverine, Expands Hush Puppies Deal

Further bolstering its strategy to grow sales from owned brands, Designer Brands Inc. has snapped up the Keds label from Wolverine Worldwide. The DSW-parent company will acquire all Keds products, including the Pro-Keds sneaker line, and the brand’s e-commerce business as part of the deal, the terms of which were not disclosed. Prior to the deal, DSW was Keds’ largest wholesale customer. The acquisition follows the recent additions of the Topo Athletic and Le Tigre brands to DBI’s growing owned-brand portfolio, in line with a strategy to double sales from owned brands and Camuto Group national owned and licensed brands to almost one-third of total sales by 2026. DBI acquired Camuto Group in 2018, which designs and develops the Vince Camuto brand and licenses footwear for Jessica Simpson and Lucky Brand. DBI also announced that it is working to finalize a deal to expand its licensing agreement for the Wolverine-owned Hush Puppies brand.


The Children’s Place took a $65M hit from cotton prices in 2022

Spiking cotton prices shaved $65 million from The Children’s Place’s results for fiscal 2022, with the raw material its largest product input cost, according to preliminary full-year and Q4 results. Jane Elfers, CEO of the children’s apparel brand and retailer, noted in a statement that prices have since fallen 40% from their highs last year and the company expects them to continue receding in 2023. Other supply chain costs ate into The Children’s Place’s bottom line as well, including a $30 million impact from air freight costs and another $30 million from elevated container costs. The Children’s Place’s preliminary results from last year show a company still under financial pressure from the myriad supply chain challenges that came front and center starting in 2021. Add to those elevated costs a sudden downswing in consumer demand starting last spring, and it makes for an ugly year.

Younger Consumers Help Tapestry Beat Q2 Expectations, But Stuart Weitzman Takes Hit From China Shutdowns & Wholesale

Stuart Weitzman saw sales heavily impacted by China shutdowns and wholesale declines in Tapestry’s otherwise positive second quarter earnings on Thursday. In fact, shares for Tapestry Inc. were up 6% after the company raised its outlook for the full fiscal year 2023 after it beat expectations in the holiday season. The New York-based parent company of Coach, Kate Spade and Stuart Weitzman reported net sales in the second quarter of $2.03 billion, down 5% from the same time last year. Net income, however, was $330 million, or earnings per share of $1.36, up from $318 million and earnings per diluted share of $1.15 in the prior year period. On the company’s quarterly earnings call, Tapestry CEO Joanne Crevoiserat noted that these results were led by double-digit sales increases in Europe, Japan and other Asian countries, which together outpaced its expectations. She also added that In North America, the company saw a slight decline in revenue amid a “difficult consumer backdrop” due to inflation and reduced spending.



Athletic & Sporting Goods

Adidas Could Lose $1.3B in 2023 From Unsold Yeezy Inventory

Adidas’ breakup with Ye could lead to a revenue loss of 1.2 billion euros (about $1.3 billion) in 2023.  The sportswear company said in financial guidance for 2023 that while it is deciding what to do with its Yeezy inventory, not selling it would lower operating profit by 500 million euros (about $534 million) and result in a break-even operating profit.  Should Adidas decide to not repurpose any of the existing Yeezy inventory, its operating profit would be lowered by another 500 million euros this year, it would incur one-off costs of 200 million euros (about $214 million), and it would report an operating loss of 700 million euros (about $748 million) for the year.  Adidas ended its partnership with Ye, the musician-turned-fashion entrepreneur formerly known as Kanye West, on Oct. 25, citing widely reported controversies around Ye. It also terminated production of Yeezy branded products.

Jansport Divesture Plan Confirmed by VF Corp. Management

VF Corp. management confirmed on a Tuesday conference call with analysts that the company began a review of strategic alternatives for its global packs business. SGB Media previously reported speculation regarding the divestment of the Jansport brand this past December.  “As part of our ongoing active portfolio management, we are announcing our intention to explore strategic alternatives for our Packs business, including the Kipling, Eastpak, and JanSport brands as we take another step in streamlining and focusing our portfolio of brands,” VF Corp Interim CEO Benno Dorer shared on the call. “As an outcome of this process, we’re committed to ensuring these brands are optimally positioned to achieve their full potential while enhancing VF’s management focus on our top strategic priorities. The company said the “iconic and profitable businesses” are strong contributors of value, but VF is committed to ensuring they are optimally positioned to achieve their full potential while enhancing management focus on the company’s greatest strategic priorities. In short, the brands deserve better.

Acushnet Holdings Corp. Acquires Club Glove Brand, The Performance Leader in Golf Travel

Acushnet Holdings Corp., the worldwide leader in the design, development, manufacture and distribution of performance-driven golf equipment and golf wear, today announced it has purchased the Club Glove brand from West Coast Trends, Inc.  Club Glove was founded in 1990 and is known by dedicated golfers to be the unmatched leader in golf travel products. Club Glove is the preferred choice by the overwhelming majority of PGA Tour, LPGA Tour and PGA Club Professionals, and its patented travel gear has long been recognized among the industry’s most innovative and reliable products.  Acushnet has acquired all relevant Club Glove trademarks, domains and products. West Coast Trends will continue to operate and service the Club Glove brand out of its headquarters in Huntington Beach, California.

Cosmetics & Pharmacy

Medly sells assets to Walgreens and closes all Pharmaca stores amid shutdown

A U. S. Bankruptcy Court judge in Delaware approved the sale of Medly’s pharmacy assets, including its patient data, pharmacy records and prescription drug inventory to Walgreens for $19.35 million. The sale did not include its retail assets, such as over-the-counter drugs sold through its app and in physical locations.  Medly filed for Chapter 11 bankruptcy protection in December 2022, listing $11.4 million in assets and $105.6 million in liabilities.  Business Insider reported Medly sent an email to employees saying it’s shutting down operations and closing its remaining 22 Pharmaca stores by the end of February.  Medly had received $100 million in July 2020 from venture firms Greycroft and Volition Capital to grow its digital, same-day delivery business.  The company bought health and wellness pharmacy company Pharmaca in June 2021.

Croda Boosts Capabilities with Solus Biotech Acquisition

Croda International Plc is acquiring South Korea-based Solus Biotech, a biotechnology manufacturer of naturally derived powder ceramides, from Solus Advanced Materials for about £232 million.  The acquisition will create a new biotechnology R&D hub for Croda in the region.  Per Croda, the number of new personal care products containing ceramides has doubled over the last five years, primarily in skin care but increasingly for hair care formulations.  In addition to Solus’ biotech-derived ceramide and phospholipid technologies, it also boasts emerging capabilities in the production of natural retinol, another ingredient commonly searched by consumers.

Beauty taps into Super Bowl marketing

E.l.f. Beauty, Fenty Beauty and Ole Henriksen are among the beauty brands with Super Bowl campaigns this year.  According to Nielsen, women make up around 47% of the Super Bowl audience.  But beauty campaigns have been rare compared to ads for products such as beer and processed food oriented toward male football fans.  Fenty Beauty and Savage X Fenty have both been leaning into Rihanna’s upcoming halftime show performance with the release of merch lines.  E.l.f. Beauty’s campaign had “White Lotus” star Jennifer Coolidge star in its Super Bowl TV commercial that was co-written by the show’s creator, Mike White.  Also adopting humor for marketing surrounding the Super Bowl is skin-care brand Olehenriksen, which created an online-only ad spoofing ‘80s-era beer commercials to showcase its cooling mask.

Alo Yoga unveils virtual store with beauty, workout content

Alongside other major brands experimenting with virtual reality, direct-to-consumer athleticwear brand Alo Yoga has opened a virtual store that offers digital styling services, beauty and wellness tutorials, workout classes and other offerings, according to a Tuesday press release.  As part of the virtual experience, customers can browse the brand’s collections, create custom outfits and view selected videos from the Alo Moves workout platform, usually only available to paid subscribers.  The brand partnered with experiential e-commerce company Obsess to create the store, per the announcement.  Shoppers can view the store on their desktop computers, mobile devices and via the Meta Quest 2 virtual reality headset.


Discounters & Department Stores

Kohl’s names new chief merchandising and digital officer

Nick Jones will become the chief merchandising and digital officer at Kohl’s in March. The retailer said in a Thursday announcement that Jones will oversee the company’s merchandise strategy and all merchandising functions. That includes buying, digital and omnichannel merchandising, product design and development, and product portfolio strategy. Jones has more than 25 years of merchandising, brand, retail and leadership experience. Most recently, Jones was CEO of U.K.-based premium apparel and home goods brand Joules Group, which sells online, at 130 stores and 1,500 wholesale outlet partners, including Nordstrom and Dillard’s. That retailer filed for administration in November.

Simon Property Group sells off Eddie Bauer interest as its retail investments tumble

Net operating income from Simon Property Group’s retail and brand interests, which include investments in J.C. Penney, Sparc Group, Authentic Brands Group and Rue Gilt Groupe, fell 35.4% to $125 million in the fourth quarter and 33.4% to $355 million for the year. Their contribution per share to the company’s funds from operations fell 39.5% in Q4 and 40.2% for the year. During the quarter, the real estate investment trust traded its share in an Eddie Bauer licensing joint venture for a further stake in Authentic Brands Group, bringing its share of ABG to 12%, CEO David Simon told analysts during a conference call. Among the brands run by Sparc (which also include Aeropostale, Brooks Brothers, Eddie Bauer, Lucky, Nautica and Reebok), Forever 21 fared the worst last year, as its teenage customer base was hit hard by inflation, he said.

Belk opens first outlet store

Belk has opened its first outlet store. The regional department store converted one of its locations in Greeneville, Tennessee, into a new Belk Outlet, which sells clearance items from its larger retail locations. With the new layout the store has been able to triple its product assortment. “Greeneville gets to be the place to pioneer this concept,” a company spokesperson said via email. Belk Outlet opened on Jan. 30, with a grand opening event planned for Saturday. “Right now we’re focused on this Belk Outlet and seeing how our customers respond to it,” a spokesperson said when asked if the concept would expand. “We’re confident that our customers are going to like it because of the fantastic prices and the expanded product assortment this location will now be able to accommodate.”

Walmart-owned Sam’s Club plans to open about 30 new stores over next five years

Walmart-owned Sam’s Club on Thursday said it will open more than 30 new stores in the U.S., marking its most aggressive expansion in years. The warehouse club’s next store is expected to open in Florida in 2024. Sam’s Club also plans to open five fulfillment and distribution centers this year, with the first of those opening in Georgia. CEO Kath McLay said the retailer wants to reach more customers, after sharp gains in sales and an all-time high in membership at its current clubs. It plans to build about 30 clubs over the next five years and likely more in the two years after, she said. And, McLay added, as prices of goods and services remain high, she said Sam’s offering has become more relevant.


Emerging Consumer Companies

The Ugly Company raises $9 million

The Ugly Company, a farmer-led producer of upcycled dried fruit snacks, announced the completion of a $9 million Series A. The Ugly Company will use the funds to expand its processing capacity to meet surging demand while accelerating expansion nationwide. The funding round was led by Sun Valley Packing, BB #:125033, a fruit grower and distributor, and Texas-based Value Creation Strategies. Musician Justin Timberlake and Valley Ag Capital Holdings (VACH) also participated in the round. The Ugly Company’s snacks are available in Sprouts nationwide, select REI, Whole Foods, and HyVee stores, and will be available in Kroger Banners (Ralph’s, Fred Meyer, QFC, King Soopers, and Fry’s) later this year on the West Coast. Current dried fruits include cherries, peaches, white nectarines, apricots, and kiwis.

Adore Me to host shoppable, livestream runway show

For the second time, lingerie brand Adore Me will host a New York Fashion Week runway show. The show — produced by Planet Fashion — will also have a live streaming capability where customers can shop the runway looks without needing to exit the stream. Adore Me’s show will showcase Valentine’s Day, bridal and Y2K-inspired styles, per the release. Lingerie retailer Victoria’s Secret finalized its acquisition of the direct-to-consumer brand in January for about $400 million.



Food & Beverage

Rebellyous Foods, plant-based chicken brand, raises $9.5M 

Seattle-based food technology company Rebellyous Foods raised $9.5 million in new cash, which the startup plans to use to deploy its latest plant-based meat production equipment. Founded in 2017, Rebellyous makes a variety of plant-based faux chicken products, including nuggets, patties and tenders. Rebellyous, which has raised approximately $30 million to date, employs about 20 people and has openings for a few more.

Liquor before beer: Spirits beat brews in new market data

Producers of spirits have new bragging rights in the age-old whiskey vs. beer barroom debate.  New figures show that spirits surpassed beer for U.S. market-share supremacy, based on supplier revenues, the Distilled Spirts Council of the United States announced.  The rise to the top for spirit-makers was fueled in part by the resurgent cocktail culture — including the growing popularity of ready-to-drink concoctions — as well as strong growth in the tequila and American whiskey segments.  In 2022, spirits gained market share for the 13th straight year in the fiercely competitive U.S. beverage alcohol market, as its supplier sales reached 42.1%, the Council said.  After years of steady growth, it marked the first time that spirit supplier revenues have surpassed beer — but just barely. Beer holds a 41.9% market share, it said.



Grocery & Restaurants

Kroger, Albertsons discuss sale of 250-300 stores

Kroger and Albertsons are discussing plans to divest between 250 and 300 stores to satisfy antitrust concerns around their proposed merger, according to a Reuters report. The stores in question may span across all the regions where the two companies operate, and could generate more than $1 billion for the companies through their sale, Reuters said, citing unnamed sources. The two companies previously said they expected to divest between 100 and 375 locations as part of their $24.6 billion merger agreement, and had proposed creating a new company to operate the divested locations. Kroger said in a financial filing that if the companies are forced to divest more than 650 locations, the merger would be reconsidered. The report also cited Ahold Delhaize — which previously was reported to have been interested in acquiring all or part of Albertsons before the Kroger deal was announced — as one of the potential buyers of the divested locations. The FTC is expected to scrutinize the companies’ plans for divestitures carefully, given the debacle of the Albertsons-Safeway merger, when Haggen acquired 146 stores to satisfy antitrust regulators, then was unable to operate them successfully and filed for bankruptcy. Many of those divested stores were either re-acquired by Albertsons or closed.

Chipotle Mexican Grill Misses Expectations for Sales, Earnings, Same Store Sales

Chipotle Mexican Grill on Tuesday reported weaker-than-expected quarterly earnings and revenue as it said customers pulled back on their restaurant spending. “As we got around the holidays, we just didn’t see that pop, that momentum, that we normally see … frankly, we started the quarter soft, and we ended the quarter soft,” Chief Financial Officer Jack Hartung said on the company’s conference call, comparing the decline in December to weaker retail sales at that time. CEO Brian Niccol maintained the company hasn’t seen backlash to higher prices for its burrito bowls and tacos, despite declining transactions for the second consecutive quarter. Executives blamed weak traffic in the fourth quarter on an underperforming limited-time menu item, tough comparisons to the previous year’s brisket launch and weather. Restaurant traffic trends have reversed heading into the new year and through January, though, according to Niccol. Traffic last month grew year over year, he said. However, this time last year the company was reeling from a wave of Covid infections that caused some locations to shorten hours or temporarily close due to sick employees.

Fast Food Giant Yum Brands Tops Earnings Expectations, Led by Taco Bell

Yum Brands on Wednesday reported quarterly earnings and revenue that topped analysts’ expectations, fueled by strong same-store sales growth at Taco Bell. Overall, the restaurant giant saw solid U.S. demand as high-income consumers traded down to fast food and low-income diners bought its chains’ value meals. However, weak sales in China once again weighed on KFC’s and Pizza Hut’s results, after the Chinese government relaxed its zero Covid policy and a wave of new outbreaks hit the country. The resurgence hurt recovery efforts for Yum and other restaurant companies, like Starbucks. Net sales rose 7% to $2.02 billion, and the company’s global same-store sales increased 6%, driven by diners’ strong appetite for Taco Bell. Taco Bell, which is typically the strongest performer in Yum’s portfolio, reported same-store sales growth of 11%, beating StreetAccount estimates of 6.7%. The chain attracted customers through a mix of higher-price menu items and value offerings. KFC fell short of Wall Street’s expectations as weak performance in China weighed on its results. Weak sales in China also hurt Pizza Hut’s fourth-quarter performance. The pizza chain’s overall same-store sales ticked up 1%, but its international same-store sales fell by 1%.

Home & Road

Bed Bath & Beyond shifts gears in newest turnaround strategy

With a fresh injection of financing, Bed Bath & Beyond (BBBY) outlined a plan that includes incrementally cutting away at its store base and making its omni-channel operation more vendor-centric. The company will shrink the footprint of Bed Bath & Beyond’s physical locations to approximately 360 of its most productive stores. The chain operated 762 units in late November 2022, although the company has since announced nearly 90 further closures. The buybuy Baby chain is in the process of being pared down from 137 units to 120 stores. Going forward, inventories will be “asset-light.” Bed Bath & Beyond plans to rely more heavily on vendor-direct-to-consumer sales and marketplace transactions. It will also seek out “innovative collaborations” to drive sales. Since last summer, BBBY was focused on rebuilding its assortment of national brands as it jettisoned several categories of private labels. The company also intends to further streamline its supply chain, technology, expense structure and business processes as it realigns operations. Hudson Bay Capital has come forward as the anchor investor on the share sale Bed Bath & Beyond announced. The hedge fund is reportedly planning to buy more than $1 billion in equity.

Tempur Sealy Q4 income drops 42% on deflated consumer demand 

Tempur Sealy International reported fourth quarter net income of $101.7 million, a 42.2% decline compared with $175.8 million in the same quarter of 2021. Impacted by decreased demand worldwide, sales for the quarter ended Dec. 31, 2022 slid 12.6% to $1.2 billion, compared with nearly $1.4 billion in the same quarter last year. Earnings per share for the quarter decreased to 57 cents compared with 88 cents during the fourth quarter of 2021. For the full year, the company reported a net income of $455.7 million, a 27% decline from net income of $624.5 million in the prior year. Sales for 2022 held mostly steady at $4.9 billion. “Our fourth quarter and full year results are the second-best sales and adjusted net income results for like periods in the company’s history,” said Scott Thompson, chairman and CEO. “Although the robust market we experienced in 2021 represented a challenging comparison for 2022, we outperformed the global bedding market, expanding our leading position in the global industry.”

Jewelry & Luxury

Watch Company De Bethune Buys Manufacturer of Music Boxes

Swiss watch manufacturer De Bethune has taken a majority stake in Reuge, the Swiss music-box maker. Financial terms were not disclosed. De Bethune was purchased by pre-owned watch retailer WatchBox in September 2021. Both De Bethune and Reuge are based in Sainte-Croix, Switzerland. The acquisition will expand the two companies’ “technical vocabulary,” a statement said, allowing them to develop “synergies to accelerate the renewal of art mechanics.” Reuge’s current CEO Amr AlOtaishan will serve as a strategic adviser for the 155-year-old company and a member of its board, it said.

Here’s Why Some Luxury Players Are Faring Much Better Than Others This Earnings Season

In the last week, luxury companies have announced divergent results for their most recent quarters. Tapestry, the New York-based parent company of Coach, Kate Spade and Stuart Weitzman, this week raised its outlook for the full fiscal year 2023 after it beat expectations in the holiday season. Ralph Lauren also beat sales expectations, noting a solid performance across multiple regions, including China. On the other hand, Capri Holdings, which owns Michael Kors, Jimmy Choo and Versace, missed forecasts for the third quarter and trimmed its guidance. Overall, retail executives and analysts have adopted an optimistic view for luxury going into 2023, thanks to the sector’s base of high-income consumers who are more resilient to higher prices and recession fears. And while Tapestry, Capri Holdings and Ralph Lauren all play in a similar luxury lane, each company has a different breakdown when it comes to channel penetration and international distribution. This has led to disparate results during a volatile environment.


Office & Leisure

Spin Master revenue drops by 24.9% in preliminary Q4 results

The holiday season was a tough one for many toy companies, and Toronto-based Spin Master was no exception.  In its preliminary Q4 results, the company reported US$465.8 million in total revenue, down 24.9% compared to the same quarter last year. The toys segment was hit hardest, posting a 26.8% decline to US$396.7 million. And gross toy sales for the quarter also dropped by 23.6%, from US$627.5 million in 2022 to US$479.2 million this year.  Max Rangel, Spin Master’s CEO and president, attributed the revenue shortage to economic conditions, lower consumer demand and retailers ordering more toys earlier in the year to mitigate supply chain issues. “As expected, toy revenue in the second half of 2022 was pressured by changes in the macroeconomic environment, particularly from higher inflation compounded by foreign exchange volatility and a carry-over of inventory at retail from the first half of 2022,” he said in a release.

Spin Master’s preliminary results for the whole year, however, have total 2022 revenue down by just 1.1% to roughly US$2 billion.

Michaels Stores Are Going Public Again but Don’t Tell the Hackers

Michaels, the arts and crafts retailer, is going public — again. J.P. Morgan, Goldman Sachs, Barclays, and Deutsche Bank are the lead underwriters of an offering slated for later this month that will sell 27.8 million shares of common stock at a price somewhere between $17 and $19, according to a government filing. If all goes as planned, the offering will raise about $500 million. Michaels will trade on NASDAQ under the ticker MIK.  Michaels was taken private in 2006 by Bain Capital and Blackstone Group in a transaction valued at about $6 billion. With more than 1,200 stores, Michaels is the largest specialty arts and crafts retailer in North America. In 2013, Michaels had $4.6 billion in sales. Michaels does not plan on paying any cash dividends in the near future and will instead use earnings to repay debt and reinvest in the company. Along with the other generic associated risks of the offering were Michaels’ concerns over their business constraints because of their considerable debt of $3.3 billion. But what really stood out in the Risk Factors was their recent data breach.

Technology & Internet

Pinterest Shares Slip on Fourth-Quarter Sales Miss and Weak Forecast

Pinterest shares slipped in extended trading after the company reported revenue that missed analyst expectations and issued a light forecast for the first quarter. Pinterest said it expects sales in the first quarter to increase in the “low single digits” from a year earlier. Analysts were expecting growth of 6.9% to $614.8 million. Revenue in Pinterest’s fourth quarter grew 4% to $877.2 million from $846.7 million a year earlier, while overall sales for 2022 jumped 9% year-over-year to $2.8 billion. The company said its global monthly active users increased by 4% year-over-year to 450 million. Average revenue per user, or ARPU, for the U.S. and Canada region rose 6% in the fourth quarter to $7.60. “While the industry as a whole is facing headwinds, we are adapting quickly to a changing macro environment and are committed to creating a more positive online experience for our users and advertisers,” Pinterest CEO Bill Ready said in a statement. Pinterest reportedly laid off around 150 employees last week, joining the growing list of technology companies like Meta, Alphabet and Salesforce that have fired workers in recent months.


What is ChatGPT? Viral AI chatbot at heart of Microsoft-Google fight

What is ChatGPT? I asked the buzzy artificial intelligence chatbot, which has ignited conversation in schools, corporate boardrooms and social media, to explain itself. In its own description, ChatGPT is “an AI-powered chatbot developed by OpenAI, based on the GPT (Generative Pretrained Transformer) language model. It uses deep learning techniques to generate human-like responses to text inputs in a conversational manner.” The tool is the talk of the business world. It has been mentioned on earnings calls by management from a range of companies including oil giants, banks — and even the industrial behemoth Caterpillar. It has also sparked concerns over potential abuses. In classrooms, students have used ChatGPT to generate entire essays, while hackers have begun testing it to write malicious code. So what is ChatGPT, exactly? Here’s a simple guide on all you need to know about the popular AI chatbot…


Finance & Economy

U.S. Consumers Tap Into Pandemic-Era Savings

Due to pandemic-related restrictions and government stimulus, U.S. households amassed an estimated $2.7 trillion in extra savings by the end of 2021, according to Moody’s Analytics. But Americans now are spending more and saving less, eating into those pandemic-fueled reserves.  The Wall Street Journal reports that, according to Goldman Sachs, about 35% of those extra savings have been spent. That figure could be 65% by the end of 2023.  The U.S. personal saving rate has swung dramatically the past few years. From 2016 to 2018 it grew slowly from 7.0% to 7.6%. In 2019, the rate was 8.8%, before it spiked to 16.8% in 2020 and 11.8% in 2021.

Shoppers to face fresh price hikes as stores, suppliers pass on costs

Shoppers around the world will pay even more for groceries this year than they did in 2022, according to retailers, consumer goods firms and investors, unless commodity costs decline or the shift to cheaper store-brand products accelerates.  Retailers and consumer goods producers have been stuck in tough price negotiations for more than a year now, with friction beginning in 2021 over COVID-related supply chain logjams.  This has since ballooned into fights over the high cost of raw materials and energy in the wake of Russia’s invasion of Ukraine, with rising prices of basic foodstuffs from bread to milk and meat exacerbating a cost-of-living crisis in Europe.