The Big Story

In Beauty, Clean Increasingly Means Green

Paul Alexander

The growth of the clean beauty trend has been clear over the last few years as the number of new brands and products that claim to be clean has increased exponentially, and as the number of fundings and acquisitions of such brands has followed suit. Traditional and social media have taken notice as well. According to a Cosmopolitan article published on May 1st, 2021, in which the magazine proclaimed May to be Clean Beauty Month, “The clean movement is probably definitely the biggest thing to happen to the beauty industry in a long, long time.” However, clean beauty’s ascent hasn’t been without growing pains. Only ten weeks after the Cosmo article, on July 15th, 2021, on the second annual National Clean Beauty Day, Women’s Wear Daily (WWD) published an article entitled “Is Clean Beauty Still Relevant?” How can Cosmo’s proclamations and WWD’s doubts be reconciled?

According to the WWD article, the issue is that there are too many definitions of clean beauty. WWD is not alone with this observation. According to a Harper’s Bazaar article (also from May of last year), clean beauty “signals morality, cleanliness, sustainability and, somehow, safety.” But, when specific brands and products adopt a “clean” stance, it can mean many things. The Bazaar article continues, “Some brands use ‘clean’ in reference to their all-natural ingredient lists, whereas others use it to describe a preservative free stance. Others consider ‘clean’ a sustainability issue, while many tag it to products that are vaguely yet dramatically marketed as ‘toxin-free’…”

Two developments appear to offer a way forward for the clean beauty trend. First, major beauty retailers are aiming to reduce consumer confusion by clearly stating how they define clean. Ulta and Sephora launched devoted sections on their websites in late 2020 and mid-2021, respectively, that list the ingredients and other considerations that factor into their version of clean. Other retailers have also made their definitions of “clean” explicit on their website, including Credo Beauty and Target.

But a second development might be even more effective at defusing clashes over clean. Increasingly, clean is being redefined as green. While sustainability has always been considered part of clean, green is increasingly taking center stage. Ulta’s aforementioned new section on its website is entitled “Conscious Beauty at Ulta – choices for you and for your world.” Sephora’s equivalent is called “Clean + Planet Positive.” For its part, Macy’s website has a collection named “Conscious Beauty,” with the tag line “Great for your skin, even better for the earth.” This “clean-as-green” angle on the trend downplays the focus on little-known ingredients. Instead, it places more emphasis on sustainability trends that already enjoy broad buy-in, such as recycling, the reduction of single use plastics, the use of environment-friendly ingredients and packaging, and water conservation.

According to Nielsen, this shift is also driving sales. An October 2021 NielsenIQ report titled “2030 Glow Up: The Future of Clean Beauty” stated “While the focus has been on ‘free-from’ beauty,” (as in “free-from harsh ingredients”) “we are starting to see a shift to a higher consumer focus on sustainability. Sales for beauty and personal care products that have environmental benefits, such as vegan, cruelty-free, reusable packaging, and plastic-free are seeing elevated growth rates over those that just have clean ingredients.” Nielsen estimated that total sales for such sustainable beauty products were growing in the 20% to 30% range, while sales for products touting sulfate-free and paraben-free formulations were growing only 3.6% and 2.5%, respectively.

While companies and consumers are often forced to accept trade-offs when confronted with a choice or issue, clean beauty’s shift toward sustainability may be the rare win-win. Future battles loom over green-washing, or superficial or misleading marketing claims of sustainability. But as “clean-as-green” results in less consumer confusion, elevated sales growth, and a less polluted planet, the clean trend is likely to remain the biggest thing to happen to beauty for a long, long time.

Headlines of the Week

Plant-based meat company Next Gen Foods raises $100 million

Singapore-based Next Gen Foods raised $100 million in the largest Series A funding round ever for any plant-based meat company. New investors include Alpha JWC, EDBI and MPL Ventures, with returning investors Temasek, GGV Capital, K3 Ventures and Bits x Bites. Next Gen Foods plans to use the funds for an expansion into the United States, as well as R&D into new sustainable foods. The company’s total funding now exceeds $130 million.  Next Gen’s Tindle, a chicken analog with a variety of applications, is now available at 12 U.S. restaurants.While presently focused on the food service channel, Next Gen plans to expand into retail in 2023.  Further global expansion into China or Brazil are also under consideration.


Sock maker Bombas said to consider initial public offering

Sock maker Bombas is said to be evaluating an IPO as soon as this year. The apparel maker has held talks with potential underwriters, according to a Bloomberg report. A target valuation for the company couldn’t be learned. Bombas, which originally was featured on ABC’s “Shark Tank” TV show several years ago, has raised a total of $150M in funding over four rounds, according to Crunchbase. Their latest funding was raised in December. Irving Investors and Third Point Ventures are the most recent investors. Bombas has a slogan that for every item purchased, the company donates an item to someone affected by homelessness, according to its website.



Apparel & Footwear

Manny Chirico Invests in Tommy John, Joins Board

Manny Chirico is taking on Tommy John. The former PVH chairman and chief executive officer has joined the board of directors at men’s and women’s innerwear brand Tommy John and has been named chair of the board’s retail committee, helping the digital native start-up grow in other channels. Chirico — who oversaw operations at PVH Corp., the fashion house that includes the Tommy Hilfiger, Calvin Klein and Warner’s brands, among others, for 15 years — has also invested an undisclosed amount in the business. “Tommy John is a strong brand with a strong market position. But as a company, it’s still relatively in the early stages of development,” Chirico told WWD. In addition, LNK Partners, a private equity firm where Chirico is a partner, has purchased a minority stake in the business. As a result, David Landau, cofounder and partner of LNK Partners, has also joined the board.

Rebecca Minkoff Sold to Sunrise Brands

Rebecca Minkoff has new owners, WWD has learned. The New York-based accessories and lifestyle brand has been sold to Sunrise Brands, which is headed by chairman and founder Gerard Guez. Sunrise Brands is a Los Angeles-based diversified apparel company whose labels include NYDJ, Diane Gilman, Joie, Equipment, Current/Elliott, Skinnygirl and Donald Pliner. The company also does private label and has done celebrity lines with Melissa McCarthy and Eva Longoria. According to sources, the asset sale was between $13 million and $19 million. Rebecca Minkoff is expected to continue in her role as chief creative officer and Uri Minkoff, who has been chief executive officer, is said to be transitioning into a senior adviser role with a focus on innovation.

Gap Inc. Gets Another Downgrade

Gap Inc. was downgraded from “neutral” to “underperform” by Bank of America, which cited concerns about Old Navy, the biggest division at the retail corporation. “We expect Old Navy to be disproportionately hurt by exposure to the low-income consumer and by worsening supply chain challenges,” BofA analyst Lorraine Hutchinson said in her report on Gap, issued Tuesday. BofA cut its 2022 earnings estimate for Gap by 48 cents to $1.59 and its share price target to $14 versus a previous target of $26. Earlier this month, Barclays lowered its Gap Inc. rating to “equal weight” from “overweight” and in January, Morgan Stanley lowered its Gap rating to “underweight” from “equal-weight.” “Gap’s supply chain woes are well-understood, but while most expected conditions to strengthen post-holiday, retailers have commented that air freight prices have risen and ocean delays have not improved,” BofA reported Tuesday. BofA said Old Navy accounts for 55 percent of Gap Inc. revenues.

Crocs revenue hits record $2.3B in 2021

Crocs finished out a year of wild growth with revenue up 42.6% year over year in the fourth quarter and gross margins up by 770 basis points, according to a press release. For the full fiscal year, Crocs’ revenue hit a record $2.3 billion, up about 67% from 2020. Even in a difficult supply chain environment, the brand’s operating income rose 219% with operating margin just under 30%.  Coming off the acquisition deal for the Heydude casual footwear brand, Crocs now aims for $6 billion in revenue for the combined businesses by 2026. Crocs had a breakout year in 2021, with sales and profit metrics up significantly over 2020 (which was also a growth year for the brand) as the clog-maker rides a wave of casualization, and reaps the benefits of its energetic marketing that capitalizes on social media and high-profile collaborations.  All of the brand’s channels contributed to last year’s growth. DTC revenue was up 64.4% to $1.1 billion, while wholesale was up 69.4% to just under $1.2 billion.

Prom Dress Retailer Windsor Fashions Plans IPO

Windsor Fashions, a retailer selling occasion wear such as prom dresses, is planning an initial public offering 85 years after its founding, according to people with knowledge of the matter. The company is working with financial advisers on the IPO, which could take place as soon as the first half of this year, depending on market conditions, the people said, asking not to be identified. The company, backed by private equity firm Sun Capital Partners, could be valued at more than $1 billion, one of the people said. The company hasn’t made a final decision and its plans, including the timing of a listing, could still change, the people added. Windsor Fashions had more than 230 stores as of May and was planning to open another 150 locations, according to a statement in May. Founded in 1937 by two brothers selling hosiery and lingerie, the company received investments in 2017 from Sun Capital, which also backs apparel brands Vince and Scotch & Soda, according to the statement.


Athletic & Sporting Goods

Just Did It: Nike Led All Brands In Screen Time During Super Bowl, According to Automated Valuation Survey

Consulting firm Elevate Sports Ventures partnered with cloud-based AI provider Hive for a brand valuation study using automatic logo detection during the Super Bowl broadcast, identifying more than 75 minutes of exposure beyond the traditional commercials at an equivalent media value of $170 million.  The data was compiled by Hive’s Mensio intelligence platform, which reported that 19 brands received more than 10 seconds of screen time during the Super Bowl LVI telecast on NBC. Nike, which is the NFL’s on-field apparel provider, led the way with a total of 46 minutes, 37 seconds of screen time while Pepsi, the halftime show sponsor, received 11 on-air mentions—the same number as the second- and third-most-mentioned brands, Toyota and SoFi, received combined.

FitOn Acquires Peerfit

FitOn, a fitness app and digital fitness platform, is acquiring corporate wellness company Peerfit after raising $40 million in new funding.  The Series C was led by Delta-v Capital with participation from Accel, Maverick Ventures, Second Avenue Partners and Mantis VC along with a strategic investment from United Talent Agency’s venture fund, UTA VC, bringing the company’s total funding to $70 million.  The acquisition of Peerfit brings together at-home and in-the-gym fitness to support the health and wellness needs of consumers as well as employees and Medicare recipients while removing barriers to being active, according to FitOn. Adoption has more than doubled in the last year to more than 1 million paid members for the combined entity.

Cosmetics & Pharmacy

Kohl’s Plans 400 Additional Sephora At Kohl’s Shops

Kohl’s., Inc. announced the list of the 400 stores that will be adding Sephora at Kohl’s shops this year. The addition of 400 stores brings the Sephora at Kohl’s location total to 600 and puts the partnership on track to meet its 850 store goal by 2023. “We’re thrilled to be bringing Sephora at Kohl’s closer to millions more of our customers nationwide through this 400 store expansion,” said Doug Howe, Kohl’s chief merchandising officer. Introduced in fall 2021, Sephora at Kohl’s features a 2,500-square-foot shop that mimics the look and feel of a freestanding Sephora. Sephora-trained beauty advisors offer personalized consultations and assistance with finding products, while testing and discovery zones offer a rotating assortment of emerging or trending products. In addition to expanding to 400 more stores, Sephora at Kohl’s is also adding six beauty brands to its assortment this spring: Murad, Clarins, Jack Black, Living Proof, Versace, and Voluspa.

Discounters & Department Stores

Walmart shrugs off disruption as US comps grow 5.6%

Walmart built on its growth throughout last year with comparable sales in the U.S. up 5.6% in the fourth quarter and up 6.4% for the full fiscal year. Total U.S. sales for the fiscal year were up 6.3% to $393.2 billion. As shoppers adjust to new phases of the pandemic, the company experienced a slowdown in its digital growth for Q4, with U.S. e-commerce sales growth of just 1%. During the year Walmart also brought in billions from non-retail revenue streams. The company’s advertising business reached $2.1 billion for the fiscal year, helping to offset the hit from supply costs to its bottom line. Walmart also posted roughly $5 billion in membership and other income for the year, up 27.4% from the previous year.

Walmart says shoppers are on alert as grocery bills climb

Walmart Chief Financial Officer Brett Biggs said the retailer’s own research shows consumers are paying attention to prices, even if they aren’t trading down to cheaper brands or buying smaller packages. The big-box retailer said it has the same number of rollbacks, or temporary price reductions, as it did at the end of the first quarter in 2021. “During periods of inflation like this, middle-income families, lower middle-income families, even wealthier families become more price sensitive,” CEO Doug McMillon said on an earnings call. “And that’s to our advantage.”

Target directing store managers to prevent workers from unionizing

Leaked training documents from Target, one of the largest retailers in the US, reveal how the company is directing management at stores to prevent workers from organizing unions. At the end of January 2022, Target emailed store management new training guidelines on labor relations to complete, prompting managers to look for warning signs of worker and labor union organizing within their stores and coordinate with corporate human resources to quell union organizing campaigns. The training email and documents were leaked anonymously to the workers’ advocacy group, Target Workers Unite, and come as other large US chains including Amazon and Starbucks are fighting unionization plans.


Dollar Tree’s executive chairman to retire

Dollar Tree Executive Chairman Bob Sasser is set to retire ahead of the company’s annual shareholder meeting, the company announced Friday. Sasser first joined Dollar Tree in 1999 as chief operating officer and went on to serve as CEO from 2003 to 2017 before taking on the executive chair role. On retiring, Sasser will take on the honorary title of chairman emeritus in recognition of his time with the retailer. His retirement, according to Wells Fargo analysts, could set the stage for a settlement with activist investor Mantle Ridge.



Emerging Consumer Companies

Stationery startup Papier secures $50m funding to fuel expansion in US market

Stationery startup Papier has secured $50m (£37m) in funding to drive its US expansion, with CEO Taymoor Atighetchi telling Yahoo Finance UK that customers could soon see Papier products on shop shelves and next-day delivery made available. The $50m fundraiser was led by Paris-based firm Singular and was accompanied by dmg ventures, Lansdowne Partners and Kathaka. Existing investors Felix Capital and Beringea also participated in the round. The investment will drive Papier’s expansion in the US, a market that already accounts for over 30% of revenue and is on course to represent 40% this year. Papier has opened its first US office, in SoHo, New York, this month, where it will build a local team with roles across brand, marketing and operations, taking the global team to over 100. The funding round was more than two times oversubscribed, as investors wanted to tap into a company that has, on average, doubled in size every year since it launched in 2015. Papier’s total investment to date stands at $65m.


Emerging hair-care brands hit the shelves in big-box and drugstores

This month, Priyanka Chopra’s hair-care brand, Anomaly, entered CVS and Walmart, marking its biggest retail expansion since joining the shelves of Target last year. Additionally, Eva NYC will enter CVS. In recent years, CVS and Walmart have been following in the footsteps of Target, which stocks a growing number of emerging brands for a younger audience. These include made-for-retail brands like Odele and Eva NYC, as well as DTC brands branching into wholesale such as Function of Beauty, Native, and Monday. Rich Simpson, SVP of Customer Development at Maesa, the brand incubator behind Anomaly said, “It’s amazing to see the evolution. If you had a static snapshot of the existing brands that were there, and then we fast-forward to all these brands that are new and coming into that space, it looks so different.”



Food & Beverage

Cannabis-infused beverage Cann closes $27 million Series A round

Cannabis-infused social tonic brand Cann has closed a $27 million Series A funding round, setting the stage for expansion into Canada and bringing new celebrity investors into the fold.  The round featured new funding from existing investor Imaginary Ventures and a number of new individuals including actor and activist Rosario Dawson, who has joined Cann’s board of directors, and actors Adam Devine, Nina Dobrev, Zoey Deutch, Jordan Cooper and Sara Foster. The brand previously raised a $5 million seed round in 2020.  Based in California, Cann produces a variety of THC and CBD-infused beverages, including a core line of 8 oz. social tonics containing a microdose of 2 mg of THC and 4 mg of CBD per can, as well as 12 oz. “Hi Boy” cans containing 5 mg of THC and its “Roadies” line of liquid packets.  Cann is currently available in six U.S. states – Arizona, California, Illinois, Massachusetts, Nevada, Rhode Island – and as of last month has made the jump over the border to Canada through partnership with Truss Beverage Co., which is a joint venture between MolsonCoors Canada and cannabis beverage developer HEXO.


Plant-based brand KOS raises $12 million

Plant-based products brand KOS closed a $12 million Series A financing round led by food and beverage industry veterans Clayton Christopher and Brian Goldberg.  The two investors are now playing active roles in guiding the brand’s strategy.  Christopher, a co-founder of CAVU Venture Partners and founder of brands Deep Eddy Vodka and Sweet Leaf Tea, and Goldberg, founder and managing director of Redbud Brands, are regular collaborators with a record for successful exits.  Founded in 2017, KOS produces a variety of plant-based powdered beverages, supplements and peanut butters which are sold online and in roughly 38,500 retail stores nationwide. The brand’s expansion in brick-and-mortar channels has been rapid; the brand began its retail rollout with Whole Foods in Q1 2020 and has since added nationwide chains like Walmart, CVS and Vitamin Shoppe. KOS’ retail footprint grew 470% year-over-year between 2020 and 2021 with additional accounts expected to open this year.


A Look at Rising Food Inflation

Food price inflation is at its highest level in a decade. Successive years of poor growing conditions across several key commodities, coupled with strong demand, have pulled down agricultural product inventories worldwide to their tightest levels in years and driven prices higher. As many nations’ economies continue to recover from COVID-19, and issues ranging from labor shortages to intense drought emerge, the current period of high prices could be with us well into 2022 and beyond. One of the strongest signals for continued food inflation is a second consecutive year of drought in agricultural powerhouse South America, brought on by the return of the La Niña weather event. Big producers Brazil and Argentina are headed for smaller harvests of major crops, especially corn, soybeans, and sugar, Gro’s machine-learning models show.



Grocery & Restaurants

Taco Bell sets sights on reaching 1,000 units outside the U.S.

Betting that the world will appreciate “a taco in a burger world,” Taco Bell is accelerating international growth with a push to reach 1,000 units outside the U.S. Reporting fourth quarter earnings last week, David Gibbs, CEO of Taco Bell-parent Yum Brands Inc., said the company broke records last week with the gross opening of about 4,200 restaurants globally, ending the year with 53,000 units across its four brands. That new-unit growth came mostly from sister brands KFC and Pizza Hut, which have long been developing their reach outside the U.S. In fact, about 60% of Yum’s sales come from international locations. As a member of the Yum portfolio, Taco Bell’s strength has come from domestic growth over the past few years. But now Taco Bell is standing out for its success with international locations. The Irvine, Calif.-based chain ended the year with 7,791 units, of which 789 were international — and that growth outside the U.S. is a 25% increase from the roughly 600 international units at the beginning of 2021. In Spain, for example, Taco Bell’s largest international market, the brand crossed the 100-unit threshold in December, and this year both the United Kingdom and India are expected to reach that milestone, said Julie Felss Masino, president of Taco Bell International.

Wingstop believes the worst of wing inflation is over

Wingstop reported that after seeing double-digit sales growth in 2020, same-store sales continued to increase in 2021, by 7.5% in the fourth quarter of the year, the company said Wednesday. While Dallas-based Wingstop wasn’t immune to the chicken shortage, its executives do believe it’s almost over. “We believe the worst is behind us,” Wingstop CFO Alex Kaleida said in regard to wing inflation. The effect of total price increases was 10%, of which half was passed on to customers, according to Kaleida, something he hopes will level out to 1% to 2% in the next year. Unit growth was a huge element for the brand in 2021 as systemwide restaurant count increased 12.5% to 1,731 worldwide locations with 193 net openings. The brand’s ultimate goal is to have 4,000 domestic restaurants and 3,000 international restaurants.

Home & Road

Newell CEO: Company returned to “core sales growth” in Q4

Newell Brands reported a net income loss of 24.4% for the fourth quarter ending Dec. 31, dropping from $127 million in 2020 to $96 million in 2021. Net sales for the quarter were up 4.3%, from $2.7 billion in 2020 to $2.8 billion in 2021. Net income was up for the 12 months ending Dec. 31, from a net loss of $770 million in 2020 to $572 million in 2021. Net sales were up 12.8% for 2021, from $9.4 billion in 2020 to $10.6 million in 2021. “We achieved an important milestone in 2021, as we returned the company to core sales growth, with strong results across each business unit and geographic region,” said Ravi Saligram, Newell Brands’ president and CEO.

La-Z-Boy posts 22% sales increase for Q3 of fiscal 2022

La-Z-Boy Inc. reported a 22% sales increase of $572 million compared with the third quarter of fiscal 2021 and consolidated operating margin of 6.9% vs. the prior year’s 7.3% for its fiscal 2022 third quarter ended Jan. 22. “While delivering an improved top line, the quarter was marked by greater-than-expected supply chain volatility, which had significant near-term impact on the efficiency of our manufacturing capacity ramp plans, dampening delivered sales growth and profit margins,” said Melinda D. Whittington, president and CEO. “A shortage of component parts, record levels of COVID absenteeism in January and the challenge of hiring and training new employees at manufacturing facilities all contributed to the issues we faced as the quarter progressed.” Whittington noted the COVID-related delays lasting 14 weeks in Vietnam impacted the company’s case goods production along with added freight costs.

Havertys posts record numbers for Q4 and 2021

Top 100 retailer Havertys reported record sales for the fourth quarter of 2021, which capped a record-setting year. For the year, consolidated sales increased 35.4% to a record of nearly $1.013 billion, vs. $748.3 million in 2020, while comparable store sales were up 17.9%. Havertys posted a gross profit of $574.6 million for the year, up from 2020’s $419 million in profits. Diluted earnings per share came in at $4.90 for 2021, up sharply from 2020’s final figure of $3.12. The fourth quarter saw consolidated sales rise 10.2% to $265.9 million, compared with $241.3 million during the same span in 2020. The quarter was profitable, as well, as Havertys posted $150.0 million in gross profit, up from $137.6 in 2020. Comparable store sales rose 9.2% during the quarter ended Dec. 31. For the quarter, diluted earnings per share were $1.35, down slightly from $1.37 in 2020’s fourth quarter.

Jewelry & Luxury

Has LVMH Turned Tiffany Around—Or Upside Down?

LVMH has done an incredible job reviving the Tiffany & Co. brand. Just ask it. In a recent conference call, chairman Bernard Arnault was not shy about claiming credit for the retailer’s “remarkable” results since it purchased the company in January 2021. (The luxury conglomerate doesn’t provide specific results for its brands.) In recent years, as the luxury sector has shown tremendous growth, “Tiffany stagnated,” Arnault announced. “Both profit and revenue were flat. … We were able to turn it around and bring it up to extremely high performance.” Perhaps. Then again, the jewelry industry as a whole has underperformed the luxury sector for years. That is, until 2021—when it outperformed just about every category.


Unisex Wedding Bands Are On The Rise

The concept of his and hers wedding bands is as traditional as the practice of exchanging rings at a nuptials. Designed with corresponding colors and metals, matching bands have long served as a symbol of the union binding two individuals. In recent years, however, more modern couples have gravitated to diverging styles, in keeping with the general shift toward less tradition-bound weddings. Now, the boom in same-sex marriages as well as the growing embrace of gender-neutral styling have given rise to a new trend in which betrothed individuals wear a unisex style that easily works for both partners, albeit in differing sizes.

Luxury goods group Kering confident Gucci sales growth will continue after bumper 2021 revenues

The chief executive of French luxury group Kering expects fashion label Gucci to continue to deliver growth for the company this year, following record revenues in 2021. Speaking to CNBC on Thursday, Francois-Henri Pinault said the fourth quarter for Gucci had been “brilliant.” Parent company Kering reported that the iconic fashion label had delivered revenues of 9.7 billion euros ($11.02 billion), up 31% on 2020. Kering released its 2021 full-year results on Thursday morning, reporting that revenues had jumped to 17.7 billion euros, up by more than a third on the previous year. The luxury goods group’s recurring operating income jumped 60% versus 2020, topping 5 billion euros. The luxury goods group said revenue growth was driven by “outstanding” performance from all its fashion houses.

Hermes CEO says ‘no strategy’ to increase prices despite disappointing fourth quarter

French luxury goods brand Hermes said Friday it has “no strategy” to significantly increase prices or expand production of its prized products despite disappointing fourth quarter results which saw supply fail to meet demand. Speaking to CNBC, CEO Axel Dumas said the company’s hand-crafted production model means it is less exposed to inflationary pressures, such as increasing energy costs, than many of its rivals that have warned of price hikes. “There is no strategy at all to create growth through unnecessary price increases,” Dumas told Charlotte Reed. “We have very limited inflation because our main tool to create our bags is hand stitching,” he continued, noting that price hikes are largely driven by wage increases for the some 300 artisans who create the company’s famed Birkin and Kelly handbags.


Office & Leisure

Hasbro and Mattel have very different visions for the future of the toy industry

Hasbro and Mattel have very different ideas about the future of the toy industry. While both of the country’s dominant toy companies reported strong revenue increases during the crucial holiday quarter and throughout 2021, only one of them expects continued robust growth. “There is a sense of confidence and optimism behind Mattel,” said Gerrick Johnson, an analyst at BMO Capital Markets. “And a defensiveness from Hasbro.” Mattel projects that consumers will accept new price increases and continue to buy at the same volume and velocity that they have been doing during the pandemic. However, much of that sales growth came on the backs of parents who turned to toys as a way to fill the hours spent at home during the pandemic and was helped by wallets that were padded by stimulus payments and child tax credits. That has led to tempered optimism at Hasbro, which expects sales growth over the next two years to recede as spending on travel and leisure rebounds.

Cedar Fair rejects SeaWorld’s acquisition offer

SeaWorld Entertainment Inc.’s offer to acquire Cedar Fair L.P. has been rejected, stymieing plans to combine entertainment businesses that have been hit hard by the pandemic. “Unfortunately, we do not see a path to a transaction,” SeaWorld said in a statement late Tuesday, without elaborating further. Earlier this month, Cedar Fair had said its board would carefully review and consider the proposal to determine the course of action it believes is in the best interest of the company and its unit holders. Cedar Fair, whose parks include Cedar Point in Ohio, Knott’s Berry Farm in California and Schlitterbahn in Texas, operates 13 properties across the U.S. and Canada, while SeaWorld has 12 theme and water parks ranging from the eponymous brand to its Busch Gardens parks. Amusement parks’ operations have been severely hurt by the pandemic due to various business restrictions and a fall in tourist arrivals. SeaWorld furloughed about 95% of its employees in 2020. Last year, conditions improved and by end of the second quarter, all of SeaWorld’s 12 parks were open and operating without capacity limitations.

Technology & Internet

Google plans Android privacy change similar to what Apple did

Google on Wednesday announced it’s adopting new privacy restrictions that will cut tracking across apps on its Android devices, following a similar move made by Apple last year that upended several firms’ advertising practices. Google said it’s developing new privacy-focused replacements for its advertising ID, a unique string of characters that identifies the user’s device. The digital IDs in smartphones often help ad-tech companies track and share information about consumers. The changes could affect big companies that have relied on tracking users across apps, like Facebook parent Meta. Apple’s adjustments hit Meta particularly hard, for example. Meta said earlier this month Apple’s privacy changes will decrease the social media company’s sales this year by about $10 billion. That news contributed to wiping $232 billion from the company’s market cap in a single day. But while Meta fought against Apple’s changes, it voiced support for the way Google plans to implement its privacy tweaks. Google said it will continue to support the current identifiers for the next two years, which means other companies have time to implement changes.


Amazon and Visa reach global truce over credit card fees

Amazon has reached a global agreement with Visa to settle a dispute over the credit card giant’s fees. The deal means Amazon customers in the U.K. can continue using Visa credit cards, as previously announced by the two companies. Amazon will also drop a 0.5% surcharge on Visa credit card transactions in Singapore and Australia, which it introduced last year. Last month, Amazon said it had dropped plans to stop accepting Visa credit cards in Britain, two days before the change was expected to take place. The companies said at the time that they would continue talks on a broader resolution to their spat. Amazon has been piling pressure on Visa to lower its fees, in a series of moves that signaled growing frustration from retailers over the costs associated with major card networks, as well as the e-commerce giant’s market power and sway over its partners. So-called “swipe” fees, which are charged to merchants each time a customer uses their card, have long been a point of contention for businesses.


Finance & Economy

Retail sales surge 3.8% in January, much more than expected amid inflation rise

Consumer spending bounced back sharply in January as rising inflation and a post-holiday surge kept cash registers ringing, the Commerce Department reported.  Retail sales for the month rose 3.8%, much better than the 2.1% Dow Jones estimate.  The numbers are not adjusted for inflation, so the 7.5% rise in the consumer price index for the month helped push a reversal from the 2.5% decline in December, which was revised lower from the initially reported 1.9% drop.  Excluding auto sales, the retail gain was 3.3%, after falling 2.8% in the previous month.  Online shopping contributed the most on a percentage basis, with nonstore retailers seeing a gain of 14.5%. Furniture and home furnishing sales increased 7.2% while motor vehicle and parts dealers saw a 5.7% rise.

The average size of a new mortgage just set a record, as home prices continue to climb

Homebuyers are facing one of the priciest housing markets in history, and that means they need larger mortgages than ever before. While mortgage demand is falling, due to rising interest rates, the size of the average purchase loan application just set a record.  Volume was 7% lower than the same week one year ago.  Home prices have been climbing steadily as demand continues to outstrip the supply of houses for sale. While the increases had moderated at the end of last summer, they are now widening again. Prices nationally were up 18.5% year over year in December, according to the most recent report from CoreLogic.

Returns are causing a holiday hangover for retailers

Recently, millions of Americans celebrated Valentine’s Day, but retailers were still celebrating Christmas.  While the winter holiday season ended over a month ago for consumers, retailers are still in the thick of it, contending with a mountain of product returns the likes of which they’ve never seen. According to a ​​report from the National Retail Federation, U.S. consumers will return about $158 billion worth of goods purchased between Nov. 1 and Dec. 24. That’s more than a 56% increase year over year.  Despite supply chain disruptions and other pandemic-related challenges, holiday retail sales in 2021 reached a record-high $886.7 billion, but the NRF estimates that 17.8% of those purchases will be returned, up from 13.3% in 2020. With those same supply chain and COVID-related issues driving the cost of each return higher, retailers are looking at a massive holiday hangover that could cost them billions.




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