Last week, millions of American couples celebrated Valentine’s Day – and with them, so too did a large number of businesses whose products and services help make the holiday happen. Data on how much consumers spent isn’t publicly available yet, but the National Retail Federation’s (NRF) projections leading up to Valentine’s Day was for spending to reach $25.9 billion, up from $23.9 billion last year. This would have made 2023 one of the biggest years on record for Valentine’s Day. It equates to about $193 dollars per person, which is about $20 more than last year. Concerns about the economy were not expected to stop Cupid from shooting arrows, or consumers from opening their wallets.
Traditional gifts are still the most popular Valentine’s Day gifts. According to the NRF, the most popular Valentine’s Day gifts were expected to be candy (57% of those planning to spend on the holiday expected to buy candy), greeting cards (40%), flowers (37%), an evening out (32%) and jewelry (21%). As 92% of Americans celebrated the holiday with chocolate and candy this year according to the National Confectioners Association, Valentine’s Day represents about $4 billion in candy sales according to IRI statistics and the sector expected 5% sales growth this year compared to 2022.
While Valentine’s Day has been criticized as being invented by greeting card companies, reports from the 1800’s suggest that many people celebrated the holiday in both America and England many years before Hallmark first offered Valentine’s Day cards (in 1913). Although Valentine’s Day wasn’t invented by Hallmark, the company has certainly profited from the holiday – Hallmark estimates that 145 million Valentine’s Day cards are exchanged annually (industry-wide), on average, representing nearly $12 billion and making the holiday the second biggest event for greeting cards after Christmas.
What goes best with a greeting card and candy on Valentine’s Day? Roses. Valentine’s Day is the biggest day of the year for the $5.9 billion global flower industry, with the focus on roses. According to FinanceBuzz, the average price for a dozen roses this year in the United States was $80.16. Although the price of roses is on the rise, there is surprisingly little profit in them for florists due to the rising costs of airfare, fuel, and shipping. The florist industry in the U.S. has declined 1.6% per year on average between 2018 and 2023 due to headwinds such as these, according to IBISWorld.
For those who wanted to celebrate at a local restaurant, whoever picked up the tab most likely noticed higher prices this year. According to the National Restaurant Association, 87% of U.S. restaurants have raised menu prices this year. There may have also been a longer wait than usual, as 63% of full-service restaurants are currently operating with fewer employees than are needed to accommodate guests.
Jewelry remains a top contender for Valentine’s Day gifts. The NRF forecast that 21% of Valentine’s Day participants planned to gift their partner jewelry this year with expected spending of $6.2 billion.
Times remain uncertain, but one thing is for sure: Americans were ready to express their love this Valentine’s Day. By spending.
Apparel & Footwear
Columbia Sportswear’s Q4 performance hampered by delivery delays
Supply chain constraints impacted Columbia Sportswear’s performance as delays led to higher order cancellations in fall 2022, according to the company’s earnings call. The company, which posted a 27% YoY decrease in operating income for Q4, noted that cancellations were mainly driven by “significantly later” deliveries from Asia, CEO Tim Boyle said during the call. Columbia Sportswear anticipates a more normalized shipping pattern moving into spring 2023, with on-time delivery percentage improving and approaching pre-pandemic service levels, CFO Jim Swanson said. Amid Columbia Sportswear’s tempered Q4 performance, the company continues to invest in and optimize its operations to prevent further cancellations in the year ahead. Columbia Sportswear has faced supply chain headwinds throughout 2022, and in Q2 was already attempting to mitigate potential disruptions by taking orders earlier from its retail partners and placing orders earlier with its factory partners, Boyle told investors in an earnings call last summer.
Caleres Expects Record Annual Sales and Adjusted Earnings Per Share for Fiscal Year 2022
Caleres announced that after a stronger-than-anticipated holiday performance and continued robust demand for its lead brands, it is providing preliminary, unaudited fiscal 2022 consolidated sales and earnings per share range that exceed its previous expectations – representing another record year for the company. On a preliminary basis, Caleres now expects the following for fiscal year 2022: Consolidated sales of approximately $2.97 billion, up 7 percent compared to fiscal year 2021, versus previous expectations for growth of 4 percent to 6 percent and Earnings per diluted share of $4.86 to $4.92. Adjusted earnings per diluted share between $4.50 and $4.52, versus previous expectations for adjusted earnings per share between $4.30 to $4.40. Consolidated inventory down approximately 3 percent compared to fiscal year 2021, versus previous expectation for an increase of mid-single digit percent. In addition, Caleres deployed cash generated during the quarter to pay its quarterly dividend – marking 100 consecutive years of regular dividend payments – and to reduce borrowings on its asset-based revolving credit facility by approximately $57 million, ending the fiscal year at approximately $308 million borrowed.
Premier Brands Group Successfully Upsizes ABL and Extends Term Loan with Unanimous Lender Consent
Premier Brands Group announced that it has successfully completed a refinancing and upsizing of its asset-based revolving credit facility and amendment and extension of its term loan credit facility. The refinancing increased capacity under the Company’s asset-based credit facility to $255 million and provided Premier Brands Group with approximately $50 million of incremental liquidity, and has a maturity in 2026. The term loan amendment and extension were supported by 100% of existing lenders and pushes out the maturity of the Company’s term debt to 2026. “The successful upsize and extension of our credit facilities demonstrates the quality of our relationships with our key lenders and their confidence in the business,” said Morris Tbeile, Chief Executive Officer. “This transaction materially enhances our liquidity and positions us for continued growth,” added Tbeile. “We remain committed to proactive and methodical management of our balance sheet as we continue to take market share and grow the business.”
Athletic & Sporting Goods
LeBron James’ business partner Rich Paul unveils new sportswear brand with New Balance
Rich Paul, the sports agent who represents LeBron James, is launching a new sportswear brand with New Balance. The new brand will be called Klutch Athletics, and the company says its mission is to provide all athletes with high-quality training apparel and empower them throughout their sports journey. For New Balance, the partnership offers a fresh new angle in combining sports and culture. The Boston-based footwear and apparel brand has seen a resurgence of late, with Foot Locker. Foot Locker CEO Mary Dillon recently called out the brand’s momentum on her company’s earnings call in November. New Balance sales were up 70% at Foot Locker during the third quarter, Dillon said.
F45 Training Secures New Financing, Revises Board Structure
F45 Training Holdings, Inc. reported closing a new $90 million subordinated debt facility provided by a consortium of existing investors led by affiliates of Kennedy Lewis Management LP to improve the company’s balance sheet and liquidity. The New Facility has a five-and-a-half-year term, with interest to be paid in kind. Net proceeds will be used for, among other things, general corporate purposes and a partial pay-down of the company’s existing Senior Secured Revolving Credit Facility with JP Morgan Chase Bank, N.A. (JPM Facility). Concurrent with the closing of the New Facility and the partial pay-down, the company amended the JPM Facility to be structured as a $70 million senior secured facility with a two-year term, comprising a $68 million term loan and a $2 million revolving credit facility. The fitness franchise has over 1,750 studios in 45 countries across Australia/Oceania, North America, South America, Asia, Europe and Africa.
Cosmetics & Pharmacy
Unilever Sells Suave Brand in North America to Yellow Wood Partners
Global beauty company Unilever has sold its Suave brand in North America to Boston-based Yellow Wood Partners for an undisclosed amount. The Suave brand sells products for women, men and kids in mass retailers and ecommerce platforms. The brand’s products include hair and body products including shampoos, conditioners, treatments and serums, styling products, body wash, antiperspirants and deodorants, and skin care. Yellow Wood’s portfolio of consumer brands includes global footcare brand Dr. Scholl’s and Scholl International; Beacon Wellness Brands, led by its anchor brand PlusOne, the sexual wellness device brand; beauty brands Real Techniques and EcoTools; self-tanning brands Isle of Paradise, Tanologist and TanLuxe; and skincare brands Freeman Beauty and the recently launched Byoma.
Skin + Me lands £10 million to expand its online skin care subscription
Skin + Me has secured £10m to further develop its personalisation skin care strategy as customer demand ramps up. The D2C skintech start-up – which delivers bespoke, dermatologist designed treatments using prescription-only ingredients – closed a Series B funding round with capital investor Octopus Ventures. The investment will boost innovations within its online prescription service and accelerate activity in new marketing channels. Skin + Me’s business has grown 100% year-on-year since it launched in 2020. It has prescribed millions of products to hundreds of thousands of customers. The business is now cash generative.
Univar Solutions acquires ChemSol for Americas growth boost
Univar Solutions has acquired Central American specialty ingredients and chemicals distributor ChemSol Group. Founded in 1983, the company operates across Costa Rica, Guatemala, El Salvador, Panama and Honduras, and in sectors including beauty and personal care. ChemSol’s purchase follows Univar Solutions’ January announcement that it would acquire Turkish specialty chemicals distributor Kale Kimya. It also adds to an M&A and investment-rich month in the cosmetic ingredients space. Earlier in February, Symrise acquired a minority stake in Synergio, a Jerusalem-based company specialising in natural antimicrobial combinations obtained through sustainable sourcing, while Croda announced that it was buying South Korea’s Solus Biotech, which manufactures ceramides and phospholipids.
Discounters & Department Stores
Neiman Marcus is laying off 5% of its workforce
Neiman Marcus Group on Tuesday said it plans to lay off less than 5% of its workforce, or about 500 people across the organization, as part of a “strategic realignment to accelerate high-value luxury customer growth.” A Neiman Marcus spokesperson confirmed that 100 of the job cuts will impact corporate employees, while the remainder will be spread across the company. The retailer this week also made another round of changes to three members of its group-level leadership team. Chief Product and Technology Officer Bob Kupbens is leaving the company, and Bergdorf Goodman President Darcy Penick will assume group-level leadership of the Neiman Marcus Group product and technology organization. Neiman Marcus President Ryan Ross will lead customer insights for the group.
Walmart shuts the door on e-commerce-only stores
Walmart plans this week to shut down a pair of stores in Bentonville, Arkansas, and Lincolnwood, Illinois, that offer only pickup and delivery service, marking the end of a nearly decade-long experiment by the retailer aimed at improving convenience for e-commerce customers, according to a company spokesperson. The retailer has also decided to close several conventional locations in Illinois, New Mexico, Florida and Wisconsin, all of which will cease operations by March 10, the spokesperson said. Walmart is opting to stop operating stores focused solely on fulfilling online orders for now even as other businesses are investing in the concept.
Mass merchants continue to gain steam in online grocery
Online grocery sales totaled $8.4 billion in January, a 1.2% drop compared with the same month last year, according to the latest monthly e-commerce report from Brick Meets Click and Mercatus. Mass merchants continue to bring in new online shoppers with their wide selection and focus on low prices. The channel saw a 20% increase in monthly active users (MAUs) — the most engaged group of online shoppers — in January, while grocery MAUs declined by 6%, according to the survey. Mass merchants are winning over valuable shoppers via e-commerce amid heightened consumer price sensitivity — and winning them back may be challenging for grocers.
Target expands beauty assortment with ‘thousands’ of new products
To enhance its beauty assortment, Target is introducing “thousands” of new products this month, the retailer announced Thursday. The company is bringing on an undisclosed number of new Black-owned and inclusive brands, and adding more products that fit its Target Clean standards for ingredient transparency. Among the brands the retailer is introducing by underrepresented entrepreneurs are Vamigas, a Latina-owned skin care brand; AfroPick, a Black-owned hair care brand; and Gainful and Saltair, both Asian American and Pacific Islander-owned brands, the retailer said. Most of the new products available are priced at less than $10, per the announcement.
Emerging Consumer Companies
Home fitness startup, Tonal, reportedly considering sale
California-based connected strength training equipment and interactive personal training services company, Tonal, is reportedly exploring fresh funding or a possible sale after discussions with Peloton and other strategic acquirors last year did not yield a transaction. While the home fitness industry benefited from the early days of the pandemic, when many gyms were closed and people were stuck at home, many have had trouble maintaining that growth trajectory. The company, which has raised $450 million to date, most recently a $250 million Series E at a valuation of $1.9 billion, is now said to be in fundraising discussions that would value the company significantly lower.
Spiffy announces $30 million Series D funding round led by Sapphire Ventures
On-demand car care services provider, Spiffy, has announced the closure of a $30 million Series D funding round led by Sapphire Ventures. This round brings Spiffy’s total funding to $85 million, with existing investors Bull City Venture Partners, Industry Ventures, Growth Street Partners, and others also participating. The company operates across 20 markets in the US and provides a range of on-demand car care services, including car washing, detailing, oil changes, tire rotations, and more. The company also offers fleet management services for customers with large vehicle fleets. Spiffy plans to use the new funding to expand its footprint and acquire new companies that complement its platform.
Self-storage startup, Stuf, raises $11M in Series A funding round
Self-storage startup Stuf has secured $11 million in Series A funding, led by Altos Ventures and Allegion Ventures. to expand its service in California and Arizona, as well as add more automation to its facilities. Stuf’s focus is on providing affordable and convenient storage solutions in urban locations, using technology to streamline the process of renting and accessing storage spaces. With the new funding, Stuf plans to invest in developing its app and automation technology, with the aim of making it easier for customers to use the service without having to interact with on-site staff. “Stuf is on the leading edge of creating unique, seamless user experiences in its industry,” said Bobby Prostko, Managing Director at Allegion Ventures. “By using technology and data to help drive these experiences, Kat and the talented Stuf team have many opportunities ahead to innovate in self storage and real estate, ultimately providing new value to commercial and multifamily property owners as well as their tenants.”
DTC luggage brand, Away, reportedly seeking potential buyers
New York-based direct-to-consumer luggage brand, Away, is reportedly seeking potential buyers as it struggles to find its footing after recent challenges, including criticism of its workplace culture and problems with some of its products. The company has also been impacted by the pandemic, with a decrease in travel leading to a decline in demand for luggage causing sales to drop by 90%. Away was valued at $1.4 billion in 2019 and has raised more than $181 million in funding to date, including a $100 million round Series D in 2019. Away co-founder and CEO, Jen Rubio, announced in December that she would be stepping down, but would remain on the board. According to anonymous sources, the company is now working to solicit interest from potential buyers.
Food & Beverage
Beyoncé Backed Hydration Company, Lemon Perfect, Bags Nearly $37 Million In Latest Funding Round
Atlanta, GA-based hydration company Lemon Perfect has raised another $36.8 million in its latest equity deal led by Goat Rodeo Capital Management, just one year after closing a $31 million series A with involvement of internationally famed artist Beyoncé Knowles-Carter. As a result of the investment, Carlton Fowler, Managing Partner of Goat Rodeo Capital Management officially joined Lemon Perfect’s board, alongside Rita Patel, CMO at Arby’s; as well as the company’s previous investors: Barak Bar-Cohen and Phillip Sarofim, the founder of Trousdale Ventures. The company’s post-money valuation is now at $150 million upon closing the latest raise. Other institutions, including Skyview Capital, Beechwood Capital, Melitas Ventures, LivWell Ventures, Riverside Ventures, and RCV Frontline are also backers of Lemon Perfect.
Coca-Cola struggles to integrate $5.6B purchase of BodyArmor
Coca-Cola has struggled to integrate its $5.6 billion purchase of BodyArmor, CEO James Quincey told analysts in the company’s most recent earnings call. The purchase of the fast-growing sports drink, the largest acquisition in the company’s history, led to more “disruption in the short-term” than expected, Quincey said. The Atlanta-based beverage giant is optimistic it will reset BodyArmor and the brand will complement its other big offering in the sports-drink category, Powerade. Coca-Cola first acquired a 15% stake in BodyArmor in 2018 for an undisclosed amount. It announced in late 2021 it would purchase the remaining 85% of the brand as it expanded its beverage offerings.
No- and low-alcohol category tops $11B in 2022 with growth accelerating, IWSR says
Global sales of no- and low-alcohol category value topped $11 billion in 2022, with growth expected to accelerate in the coming years, according to data from IWSR. The data firm said consumer demand for no- and low-alcohol products rose more than 7% in volume across 10 key global markets in 2022. The category is forecast to post a compound annual growth rate topping 7% through 2026 — double digits in the U.S. — compared to above 5% from 2018 to 2022. While sales of low- and no-alcohol are small compared to the nearly $200 billion U.S. alcohol market, the category is benefiting from consumers who value healthier offerings and have a lesser willingness to imbibe, particularly during the workweek.
Grocery & Restaurants
Subway announces potential sale of the company
After rumors of a potential sale have been swirling for weeks, Subway announced Tuesday that the sandwich chain is considering a potential sale of the company. Although scant details were available, the Milford, Conn.-based privately owned sandwich chain said that it is going through a sale exploration process and clarified that there is “no indication of timing or assurance that a sale will occur.” “The management team remains committed to the future and will continue to execute against its multi-year transformation journey, which includes a focus on menu innovation, modernization of restaurants and improvements to its overall guest experience,” Subway said in a statement released on its website. “The company recently announced another record-setting year, ending 2022 exceeding global sales projections and achieving eight consecutive quarters of positive same-store sales growth.” The sandwich chain currently has 37,000 units globally, after the company culled several thousand stores from its portfolio in recent years.
Burger King-owner Restaurant Brands Posts Strong 4Q, Names New CEO
Restaurant Brands International on Tuesday posted a strong fourth quarter and named Chief Operating Officer Joshua Kobza as its new chief executive, effective March 1, replacing José Cil. “Over the past several years, the Board of Directors has worked with management to build a thoughtful succession plan for key positions, so this is a natural transition for Josh to lead our next phase of growth,” Chairman Patrick Doyle said in a Tuesday announcement. The leadership change comes as the company works to revive and expand some of its key restaurants. Restaurant Brands houses chains Burger King, Tim Hortons, Popeyes and most recently Firehouse Subs. The company reported a slight miss on earnings, but beat on revenue compared to analyst’s expectations. As the company heads into its new fiscal year with a new CEO at the helm, it is preparing for an “accelerated pace of growth for the next five to 10 years,” Doyle said on a call with analysts.
Home & Road
All Bed Bath & Beyond, Buybuy Baby stores to go dark in Canada
Bed Bath & Beyond’s latest effort to turnaround its ailing business does not include its Canadian operations. Bed Bath & Beyond Canada is “insolvent,” and its corporate parent (Bed Bath & Beyond Group) has “reluctantly concluded” that, even with its recent equity offering, it does not have enough capital available to both restructure its U.S. business and also bring the Canadian business back to profitability, according to filings with an Ontario court. The filings were reposted on the website of consultancy Alvarez and Marsal, which has been appointed as a monitor of the business in the Canadian court case. In the filing, Bed Bath & Beyond Canada said it is not profitable on a standalone basis and has realized significant net losses for the nine months ending November 26, 2022. The retailer plans to undertake an orderly liquidation of its remaining inventory with “assistance from a third-party professional liquidator and vacate its leased retail stores and premises.” There are 54 Bed Bath & Beyond stores and 11 Buybuy Baby locations in Canada.
3Z Brands expands product portfolio with 2nd acquisition in 7 months
3Z Brands, the growing portfolio of sleep brands, has acquired another direct-to-consumer mattress brand, its second purchase in less than seven months. The recently rebranded parent company of Brooklyn Bedding and Helix Sleep has acquired Nolah Sleep. The company said Nolah will continue to operate as an online-only brand in the short term. Plans are for Nolah to expand into the Brooklyn Bedding brick-and-mortar stores in Arizona, and later into 3Z’s wholesale offerings. In 2021, Cerberus Capital Management acquired Brooklyn Bedding and Helix Sleep, and last year, the companies bought e-commerce sleep brand Bear Mattress. More acquisitions could be in the 3Z’s future. Terms of the Nolah deal were not disclosed, and company officials declined to share Nolah’s annual sales, only saying that the company has posted “positive growth year over year.”
Tuesday Morning makes its 2nd trip into bankruptcy
Tuesday Morning said “exceedingly burdensome debt” has forced it into Chapter 11. The home goods-focused, off-price retailer made its filing in the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division. Fast facts about what the company plans now: Tuesday Morning has hammered out a deal with Invictus Global Management to provide $51.5 million of debtor-in-possession (DIP) financing. The funds will be used to support ongoing operations during the proceedings. The company said it aims to reduce its outstanding liabilities, obtain fresh capital and “transform into a nimbler retailer.” The chain currently consists of 487 stores in 40 states. The retailer plans to close stores in low-traffic regions to focus on high-volume locations. The filing and related press release did not disclose the number of closings planned. The Chapter 11 filing reports estimated assets of $100 million to $500 million and estimated liabilities of $100 million to $500 million.
This is Tuesday Morning’s 2nd bankruptcy. It last entered bankruptcy in May 2020 and emerged in January 2021.
Jewelry & Luxury
The RealReal slashes workforce, store base in quest for profits
Reversing a previous effort to bulk up staffing, The RealReal on Wednesday said it will cut operating expenses through layoffs and store closures. The moves will cost some $1.7 million to $2.2 million, mostly in severance payments, employee benefits and related expenses. The apparel resale company will let go of about 230 employees, or 7% of its workforce, according to a filing with the Securities and Exchange Commission. Two flagship stores in San Francisco and Chicago, two neighborhood stores in Atlanta and Austin, Texas, and two consignment offices in Miami and Washington, D.C., will shutter, per the filing. The company will also reduce its office space in San Francisco and New York City.
Kate Spade New York launches resale program with ThredUp
Kate Spade New York announced its “pre-loved” program last week which allows customers to purchase and trade in secondhand products on its branded site using the ThredUp platform. Participants have the opportunity to earn Kate Spade shopping credit upon turning in gently used womens’ and kids’ items from eligible brands in exchange for the credit, according to an email shared with Retail Dive. This is ThredUp’s third retail-as-a service deal this year. The company announced similar deals with J. Crew and Francesca’s earlier this year.
U.K. Regulator Probing Farfetch Purchase of Yoox Net-a-Porter
On Feb. 8, the United Kingdom’s antitrust regulator, the Competition and Markets Authority, announced it was probing Farfetch’s proposed acquisition of rival upscale e-tailer Yoox Net-a-Porter (YNAP). Last year, luxury conglomerate Richemont—which has owned YNAP since 2018—announced plans to sell part of its stake in the site to primary competitor Farfetch. Initially, Farfetch will own only 47.5% of YNAP, with Richemont maintaining control of 49.3% and United Arab Emirates-based Symphony Global controlling 3.2%. The deal calls for Farfetch to purchase all of YNAP within three to five years, subject to certain conditions.
Office & Leisure
Hasbro keeps expectations low for the start of 2023, but sees turnaround coming
Hasbro’s 2023 outlook might feel like déjà vu. At first, anyway. The toymaker on Thursday announced its fourth-quarter results while issuing conservative guidance for the year, mimicking the modest expectations it had when it entered 2022. Hasbro is maintaining some optimism though, pointing to key bright spots from releases like Transformers and its growing Wizards of the Coast gaming division, which houses Dungeons & Dragons, along with the turnaround plan it announced in October. Hasbro projected that full-year revenue will decline in 2023, but forecasted that the majority of the squeeze will be felt in the first half of the year. Hasbro said it expects revenue for the year to decline in the low-single digits, percentage-wise, which missed Wall Street’s expectations.
Away exploring strategic options, including a sale: Bloomberg
Direct-to-consumer luggage brand Away is exploring strategic options including a sale of the company, according to reporting from Bloomberg, which cited anonymous sources. JRSK Inc, which operates as Away, has been working through an advisor to solicit interest from potential buyers though the company could ultimately decide against a sale. Although it previously held a $1.4 billion valuation in 2019, it is not clear how much it would currently sell for. Away’s reported interest in exploring strategic options follows years of executive changes. In January, the travel company tapped former Foxtrot executive Carla Dunham as its new chief of marketing. This came after its chief financial officer left the position in November to become president, and Away named its first chief digital and operations officers the year before.
Independent Pet Partners files Ch. 11, looks to sell some stores
Independent Pet Partners, the parent company of Chuck & Don’s, Loyal Companion, Kriser’s and Natural Pawz, filed for Chapter 11 bankruptcy on Feb. 5. The company asked the bankruptcy court to approve over $9 million in debtor-in-possession financing from its current lenders to support and safeguard its business throughout the bankruptcy proceedings. As part of the restructuring, the company is exiting its Loyal Companion and Natural Pawz brands and shutting down its existing stores on the East Coast, Texas and California. The company will continue to run under its Chuck & Don’s and Kriser’s brands. The retailer began liquidating 93 of its stores on Feb. 3 and will continue that process into the latter part of February. Independent Pet Partners said it is “optimistic” that some of its locations, as well as its Natural Pawz brand, would have new owners soon.
Technology & Internet
Google CEO tells employees some of company’s top products ‘were not first to market’ as A.I. pressure mounts
Google CEO Sundar Pichai told employees on Wednesday to take a few hours during the week to test the company’s artificial intelligence chat tool Bard as he faces criticism for leadership’s slow response to ChatGPT and rival Microsoft. “I know this moment is uncomfortably exciting, and that’s to be expected: the underlying technology is evolving rapidly with so much potential,” Pichai wrote in a companywide email, which was viewed by CNBC. Pichai asked employees to spend two to four hours of their time on Bard, adding that next week the company will send more detailed instructions. He reminded staffers that Google has not always been the first to release a product, but that hasn’t hampered its ability to win. “Some of our most successful products were not first to market,” Pichai wrote. “They gained momentum because they solved important user needs and were built on deep technical insights.” Numerous search engines existed before Google hit the market in 1996, and yet they almost all vanished as Google came to dominate the industry. In mobile, Google didn’t introduce Android until years after the BlackBerry existed, and it also followed companies like Palm. Now, Android is the most popular mobile operating system in the world. Still, Google parent Alphabet was slammed by investors last week after the company was upstaged by Microsoft’s announcement of a ChatGPT-integrated Bing search engine.
DOJ reportedly accelerates Apple antitrust investigation
The Department of Justice has accelerated its antitrust investigation into Apple, The Wall Street Journal reported Wednesday. The company’s policies for third-party apps on its devices and whether it unfairly favors its own products on its mobile operating system are two areas of focus, according to the Journal. The investigation, which began in 2019, has gained more litigators assigned to it and new document requests and consultations with companies related to the matter in recent months, according to the report. Politico reported in August that the DOJ was in the “early stages” of drafting a potential complaint against the company. It’s still unclear what role DOJ antitrust chief Jonathan Kanter will play in the investigation or any potential enforcement action. Kanter was initially not involved in the Apple matter because of his past representation of clients who have accused Apple of being anti-competitive, but sources told the Journal he would likely end up working on any action against the company. Kanter was cleared to work on Google matters after the department evaluated similar concerns over his work in private practice.
Finance & Economy
US retail sales post biggest jump in nearly two years
United States retail sales increased by the most in nearly two years in January after two straight monthly declines as Americans boosted purchases of motor vehicles and other goods, pointing to the economy’s continued resilience despite higher borrowing costs. Coming on the heels of news that monthly inflation picked up in January, signs of strength in consumer spending could fuel financial market speculation that the US Federal Reserve could continue rising interest rates through summer to cool domestic demand. The US Department of Commerce said that retail sales surged 3 percent last month, the largest increase since March 2021, after declining by an unrevised 1.1 percent in December.
Wholesale inflation surges 0.7% in January, more than expected as high prices persist
Inflation at the wholesale level rose more than expected in January, the latest sign that painfully high consumer prices could take some time to dissipate. The Labor Department said that its producer price index, which measures inflation at the wholesale level before it reaches consumers, rose 0.7% in January from the previous month. It marked the steepest monthly increase since early summer. On an annual basis, prices are up 6%. Those figures were both higher than the 5.4% headline figure and 0.4% monthly increase forecast by Refinitiv economists, a worrisome sign for the Federal Reserve as it seeks to cool price gains and tame consumer demand with the most aggressive interest rate hike campaign since the 1980s.