Story of the Week
Here’s why Capital One is buying Discover in the biggest proposed merger of 2024
Capital One’s recently announced $35.3 billion acquisition of Discover Financial isn’t just about getting bigger — gaining “scale” in Wall Street-speak — it’s a bid to protect itself against a rising tide of fintech and regulatory threats. It’s a chess move by one of the savviest long-term thinkers in American finance, Capital One CEO Richard Fairbank. Fairbank, who became a billionaire by building Capital One into a credit card giant since its 1994 IPO, is betting that buying rival card company Discover will better position the company for global payments’ murky future. The industry is a dynamic web where players of all stripes — from traditional banks to fintech players and tech giants — are all seeking to stake out a corner in a market worth trillions of dollars by eating into incumbents’ share amid the rapid growth of e-commerce and digital payments. The deal, if approved, enables Capital One to leapfrog JPMorgan as the biggest credit card company by loans, and solidifies its position as the third largest by purchase volume.
Apparel & Footwear
Champion Bids Roll In: Hanesbrands Said to Be Seeking $1.4B
The bids are in and the Champion sale process is closer to finding its winner. Hanesbrands Inc. hired Goldman Sachs & Co. and Evercore last year to explore “strategic options” for the active brand, leading to an auction that set the deadline on first-round bids for Wednesday, WWD previously reported. A source close to the situation said the auction produced multiple bids that are being evaluated. The deal is a big one for Hanesbrands, which is said to have set $1.4 billion as a starting point for the auction – a sum that approaches Hanesbrands’ entire market capitalization of $1.6 billion. Although it could not be learned just who submitted bids, a range of would-be buyers have shown interest in the process, including the brand-management giant Authentic Brands Group as well as the strategic player G-III Apparel Group. A sale of Champion would give Hanesbrands’ finances a much needed boost. The company ended last year with net debt of $3.1 billion, or 5.2 times its adjusted earnings before interest, taxes, depreciation and amortization. While Hanesbrands ended the year with liquidity of more than $1.3 billion, paying down debt is a priority.
Lefties: Zara’s secret weapon in fast-fashion fight against Shein
Zara owner Inditex, the world’s biggest listed fast fashion company by sales, is expanding its low-priced Gen Z-focused brand Lefties to counter Chinese-founded rival Shein. The rapid growth of Shein, an online marketplace with no physical stores, is putting pressure on retailers like Inditex and Sweden’s H&M, to find ways to respond to its budget prices. Zara has become less competitive on price since Inditex started hiking prices at its core brand to protect profit margins from inflation and as part of a shift towards more upmarket customers. But the Spanish company is also quietly growing its budget ranges. The expansion of Lefties, which sells 17.99-euro jeans, dresses for as little as 7.99 euros ($8.64), and 5.99-euro handbags, is a key part of that strategy. Lefties, which started life as an outlet for Zara leftovers, now has stores in 17 countries, including Egypt, Mexico, Romania, Saudi Arabia, Turkey, and United Arab Emirates. Its growth shows that Inditex wants a foothold in the value end of the market, even as it has successfully boosted profits at Zara, which is much bigger than Lefties in terms of sales and store numbers.
New Balance Posts $6.5B in Annual Sales in 2023
New Balance had another solid year in 2023. The Boston, Mass.-based shoe company said it hit $6.5 billion in annual sales in 2023, which marked a 23 percent increase compared to 2022. The results were driven by growth across all global markets, the company told FN in an email that included statements from New Balance chief executive officer and president Joe Preston. “There’s never been a better time to be at New Balance as we work together to bring our collective and intentional best every day,” Preston said. Outside of footwear, the company’s global apparel business crossed $1 billion in 2023, a new record. The category “remains a priority focus in 2024,” Preston said. By region, sales grew by more than 35 percent in Europe and by more than 20 percent in the U.S. The results overall represented a 96.6 percent growth in sales since 2020, when revenues totaled $3.3 billion for the year. Since 2020, New Balance’s sales have almost doubled across every region.
Wolverine Worldwide CEO ‘Bullish’ on Saucony’s Future as Turnaround Strategy Takes Hold
After six months of turbulent stabilization efforts, Wolverine Worldwide executives are turning their focus to the company’s star brands – Saucony and Merrell. In fact, for Saucony especially, Wolverine Worldwide president and chief executive officer Chris Hufnagel is especially bullish. On the company’s fourth quarter and full year fiscal 2023 conference call on Wednesday, Hufnagel told analysts that Saucony “is near and dear” to his heart, and thinks the running brand has “some of the greatest potential” in the entire portfolio. “I’m encouraged by Saucony because I think the product pipeline is very good,” Hufnagel said. The CEO added that it is “much stronger” than last year. “I do think our product pipelines weren’t as innovative as they needed to be in 2023,” Hufnagel noted. Hufnagel’s excitement over Saucony comes as the Rockford, Mich.-based company reported that overall net revenues for the fiscal year 2023 fall 16.5 percent to $2.24 billion versus $2.68 billion in 2022. At Saucony, revenues for the year dipped 1.9 percent to $495.8 million versus $505.3 million the year prior. Looking ahead, Wolverine Worldwide is forecasting revenue for full year 2024 to be approximately $1.70 billion to $1.75 billion, representing a decline of approximately 12.2 percent to 14.7 percent compared to 2023.
Athletic & Sporting Goods
Nike plans to lay off 2% of its global workforce
Nike is laying off 2% of its global workforce — 1,600 employees or more — according to a statement CEO John Donahoe emailed to company employees. The announcement, first reported by Willamette Week, said the layoffs would not affect Nike stores or distribution centers. The message said the company isn’t performing at its best and it will take advantage of opportunities in sport, health and wellness. The extent of layoffs at Nike headquarters on the edge of Beaverton wasn’t immediately clear. The layoffs come after Nike announced plans in December to cut $2 billion in expenses over the next three years.
Planet Fitness Grows Revenue but Warns of ‘Transition Year’
Planet Fitness, inching closer to 20 million members and now with 2,575 store locations, reported that total revenue increased from the prior-year period by 1.4% to $285.1 million in its fourth quarter, and for fiscal 2023, its total revenue increased from the prior year by 14.4% to $1.1 billion. In addition to its fourth quarter and 2023 earnings, Tom Fitzgerald, chief financial officer, has announced his intention to retire at the end of August. Providing its 2024 outlook, Planet Fitness expects revenue to increase in the 6%-7% range when compared to 2023, new equipment placement of approximately 120-130 in franchisee-owned locations and system-wide same-store sales in the high single-digital percentage range.
Deion Sanders Takes Ownership Stake In Redcon1
Deion Sanders has reportedly taken an ownership stake in the Redcon1 supplements and performance drinks company. Sanders is expected to drive Redcon1’s expansion, especially within the sports nutrition and performance beverage categories. The company said his creativity and expertise come from his “personal experiences and success in sports, which will play a pivotal role in continued product innovation and enhancing the brand’s visibility,” said the company in a release. Sanders and Redcon1 have been developing a Prime Time-inspired line of products, which will debut with an energy drink.
Cosmetics & Pharmacy
Estee Lauder to cut 3% to 5% of its employees after sales, profit slide in its most recent quarter
Estee Lauder is cutting 3% to 5% of its global workforce as part of a restructuring program that aims to increase profits and become more nimble in a challenging international environment. The layoffs were announced as the New York cosmetic giant reported falling profits and revenue in the second quarter, and trimmed its annual profit forecast. Business was dragged down by sluggish sales in China as well as disruptions in Israel and other parts of the Middle East. The downsizing, which will affect as many as 3,100 workers, will be made by July, Estee Lauder said. The company employed 62,000 workers worldwide, according to its latest regulatory filing. The company, whose brands include Clinique, Tom Ford and La Mer, said it expects to take restructuring and other charges of between $500 million and $700 million, before taxes, consisting of employee-related costs, contract terminations, asset write-offs and other costs associated with implementing the initiative.
Planity Raises $50M in Series C Funding
France-based Planity has raised $50 million in Series C funding, which will be used to accelerate European expansion, the recruitment of 300 new employees, and support enhancement of its product through AI. Planity is the market-leading online booking SaaS platform for the beauty industry, supporting 25% of hair and beauty salons across France. The funding round was led by InfraVia Capital Partners with participation from existing shareholders Crédit Mutuel Innovation, Revaia, and Bpifrance Digital Venture. Planity has in total raised $105 million since 2017.
Amazon aggregator Forum Brands acquires organic period care brand Lola
Lola, a period care brand known for its organic, cotton tampons, pads and other sanitary products, has been sold to aggregator Forum Brands. Founded in 2014 by Alexandra Friedman and Jordana Kier, Lola launched with a goal to disrupt an industry led by Tampax, which has an estimated 29% global market share. As concern grew over the ingredients used in personal care products, Lola tried to stand out by selling products made of 100% organic cotton, with no dyes or toxins. Lola initially sold its products online and offered a subscription service. Forum Brands confirmed the acquisition, but declined to share specifics of the purchase. This acquisition comes as more holding companies seem more interested in the category. Earlier this month, The Honey Pot announced that it has entered into a deal to be acquired by Compass Diversified – which describes itself as a company with “diversified holdings in niche middle-market businesses” for $380 million.
Discounters & Department Stores
Macy’s faces proxy fight after rejecting takeover bid
Macy’s on Tuesday took an opportunity to further rebuff Arkhouse Management, even as it acknowledged that the financial firm has nominated nine people to its board, setting up a proxy fight. About a month ago the department store rejected a $5.8 billion takeover offer from Arkhouse and Brigade Capital. On Tuesday, Macy’s defended its board as “diverse, experienced and engaged,” reiterated that the firms had failed to address the board’s concerns about their takeover financing, and slammed Arkhouse for “claiming inaccurately that they had responded to any outstanding issues.” In lieu of providing requested information about its potential financing, Arkhouse on Feb. 11 asked Macy’s to extend its director nomination window by 10 days, per Macy’s press release. Arkhouse didn’t immediately respond to a request for comment, and Brigade declined to comment.
Walmart hits supplier emissions goal 6 years early
Walmart has cruised through its goal of cutting 1 billion metric tons of greenhouse gas emissions from its supply chain — an initiative known as Project Gigaton — six years ahead of schedule. Launched in 2017, the project had a target date of 2030. CEO Doug McMillon said on the company’s fourth-quarter earnings call this week that “we’re excited to say that our suppliers have now reported projects exceeding that 1 billion metric ton mark six years early.” Walmart plans to continue Project Gigaton and is working to improve and expand it, EVP and Chief Sustainability Officer Kathleen McLaughlin said in a company post, though she did not specify a new goal.
Dillard’s goes after luxury shoppers with ‘The Coterie Shop’
Alongside other retailers updating their merchandise offerings, Dillard’s has debuted The Coterie Shop, a new online and in-store concept featuring four luxury designers, the department store announced Friday. The shop will feature special occasion and casual attire from Abbey Glass, Buru, Crosby by Mollie Burch and Fanm Mon, the company said. Dillard’s is introducing The Coterie Shop at select locations in Alabama, Arkansas, Arizona, Florida, Georgia, Kentucky, Louisiana, North Carolina, Oklahoma, South Carolina, Tennessee and Texas.
Emerging Consumer Companies
Heritage Distilling Company acquires Thinking Tree Spirits
Heritage Distilling Company (HDC) has acquired Thinking Tree Spirits, a brand known for products like Gifted Gin and Main Stage Vodka. The merger will result in a combined entity with two production facilities, five retail tasting rooms, and distribution across the Pacific Northwest and Midwest. HDC CEO Justin Stiefel stated that the acquisition was a result of the synergies between the two companies and their shared passion for craft spirits. Thinking Tree co-founder Emily Jensen expressed excitement about the partnership, believing that HDC’s focus on quality and community connection will help Thinking Tree reach its full potential. The move will involve relocating HDC’s activities to the existing Thinking Tree building in Eugene, Oregon, and combining production facilities to enhance efficiency. The expansion is expected to be completed by Memorial Day 2024. The deal will also result in several Thinking Tree employees joining Heritage Distilling.
Society Brands acquires Clarifion and Cleanomic
Society Brands has acquired Orange County-based brands Clarifion and Cleanomic, surpassing $100 million in revenue. Clarifion offers air ionizers and purifiers, while Cleanomic provides sustainable home goods. Society Brands projects significant growth in 2024 and emphasizes a strong relationship with customers through direct-to-consumer sales. The acquisitions align with their strategy of acquiring brands mostly on Shopify. The company’s unique business model offers entrepreneurs liquidity and resources for growth. With a focus on e-commerce, Society Brands has moved its headquarters to Canton, Ohio and now supports 11 brands.
Jones launches to help people quit vaping with innovative NRT
Jones, a brand focused on helping people quit vaping, has received $1.1 million in pre-seed funding. Co-founded by childhood friends Hilary Dubin and Caroline Huber, Jones offers FDA-approved nicotine mints in chic packaging priced at $62. The brand also provides a supportive app for users to track their progress and connect with others going through the same journey. Since its launch, Jones has gained a digital community of 4,000 users and is seeking a seven-figure seed funding round for retail expansion.
Food & Beverage
Equal owner Whole Earth Brands to go private in sweetened takeover bid
Whole Earth Brands agreed to go private after receiving an offer from its largest shareholder, the company said in a statement. The maker of Equal and Wholesome Sweeteners will be purchased for $4.875 per share by an affiliate of Sababa Holdings FREE. The deal, which is expected to close in the second quarter, is an increase from an initial bid from Sababa of $4 a share made public last June. At the time, the company announced it would explore “strategic options” last summer. Sababa is controlled by Martin Franklin, who already owns about 21% of Whole Earth. Since going public following a merger with a SPAC in June 2020, Whole Earth has doubled down on sweeteners that are on-trend. But during that time, it has watched its stock price languish, making it ripe for a takeover.
Culture POP Raises $21M In New Investment
Culture POP is riding the new year’s wave of consumer interest in gut-friendly sodas with new investment capital. The Massachusetts-based soft drink brand, started by Nantucket Nectars co-founder Tom First, raised $21 million of a $26 million round from new investors which include Enlightened Hospitality Investments — the investment arm of restaurateur Danny Meyer — and a private investment by Howard Schultz, according to a SEC Form D.
Nestlé Warns of Sales Growth Slowdown
Packaged food giant Nestlé reported weaker-than-expected results and warned of slower sales growth this year, as higher prices force shoppers to curb spending. The Swiss maker of KitKat chocolate bars and Nescafe coffee said Thursday that it expects organic sales to climb by around 4% this year, slowing from 7.2% growth in 2023 and below expectations of 4.7%, according to a consensus forecast provided by the company. “Unprecedented inflation over the last two years has increased pressure on many consumers and impacted demand for food and beverage products,” Chief Executive Mark Schneider said.
Grocery & Restaurants
Colorado sues to stop $25 billion Kroger-Albertsons merger
Colorado’s attorney general filed a lawsuit on Wednesday seeking to block Kroger’s proposed $25 billion acquisition of rival supermarket chain Albertsons, saying consumers would be hurt, as the U.S. Federal Trade Commission and other states continue to scrutinize the deal. Attorney General Phil Weiser in a statement said the proposed transaction, first announced in 2022, “would lead to stores closing, higher prices, fewer jobs, worse customer service, and less resilient supply chains.” Kroger and Albertsons are two of Colorado’s largest grocery chains, Weiser’s office said. Kroger runs 148 King Soopers and City Market stores, and Albertsons operates 105 Safeway and Albertsons stores in the state. The companies defended the proposed deal as pro-competitive, saying in a statement they were “disappointed in Attorney General Weiser’s premature decision to file a lawsuit while the merger is still under regulatory review” by the FTC. Colorado’s lawsuit also challenged what it said were unlawful agreements restricting hiring between Kroger and Albertsons. Kroger has proposed to divest more than 400 stores and eight distribution centers to C&S Wholesale Grocers to allay antitrust concerns over the deal. Kroger and Albertsons in January said they were pushing back their anticipated closure until later in the year.
Jamba and Cinnabon parent company GoTo Foods announces opportunities for growth and acquisitions
After the Atlanta-based restaurant company formerly known as Focus Brands announced its rebranding to GoTo Foods on Tuesday during the company’s annual conference in Las Vegas, CEO Jim Holthouser offered some details on exactly what to expect in the days and years ahead. Although daily operations won’t change much for franchisees and employees as the company moves to a more platform-based business model, more brand collaboration will be on the table. The goal is to eventually break down most silos between the seven restaurant brands — including Jamba, Cinnabon, Auntie Anne’s and Moe’s Southwest Grill — and commonly share resources, personnel and technology. But GoTo Foods won’t just be expanding its current portfolio of brands: the executive team at the company believes there is plenty of room for new brands in the portfolio. While the company formerly known as Focus Brands became well-known for its investment in the snacks and so-called “mall brands” segment, CFO Mike Dixon said the company is open to many different types of acquisitions. “We’re interested in complementary brands,” Dixon said. “we’ve said in the past that we’d love a chicken brand or a pizza brand, but we don’t need another pretzel brand or another ice cream brand. That’s not going to help us grow the way we want to.”
7 Brew gets an investment from Blackstone to accelerate growth
Arkansas-based drive-thru beverage concept 7 Brew Coffee has received a growth equity investment from Blackstone Growth to accelerate its expansion across the U.S. Terms of the transaction were not disclosed. 7 Brew first opened in 2017 and has since grown to more than 190 locations, generating a more than 185% growth rate from 2021 to 2011, according to Technomic Ignite data. During a recent interview, CFO Nicole Miller Regan said there were approximately 2,000 stands under development agreements at the end of 2022. “The opportunity is just massive, and anything is possible. The whole idea of what we’re doing translates across the globe. We want to break sales and development records,” she said.
Home & Road
Beyond Posts Earnings Miss, Revenue Beat As Revamped Leadership Updates on Strategy
A day after announcing executive changes, Beyond posted a loss larger than an analyst estimate on revenues exceeding the forecast as new leadership noted the company continues a strategic review of non-core operations. Net loss was $161 million, or $3.55 per diluted share, versus a net loss of $15.5 million, or 34 cents per share, in the year-prior quarter. Adjusted for one-time events, net loss was $55.4 million, or $1.22 per share, in the year-earlier period, the company reported. A year earlier, while still operating as Overstock, the company posted an adjusted net loss of $2 million, or four cents per diluted share. A fourth-quarter analyst consensus estimate from Zacks Investment Research pegged Beyond’s adjusted diluted net loss at 71 cents per share. However, revenues topped a Zacks estimate by 12.05%.
‘Record revenues’ help Leon’s buck headwinds in Q4
Canadian home furnishings group Leon’s Furniture Ltd., parent company of Leon’s and The Brick, posted gains in the fourth quarter of FY2023 on the strength of record revenues. In the quarter ended Dec. 31, the Toronto-based retail group, which reports earnings in Canadian dollars, posted system-wide sales of C$836.5 million, a record and a 4% increase vs. C$804.4 million over the same three-month span in fiscal 2022. Net revenues totaled C$686.9 million, up 3.9% compared with C$661.2 million in the fourth quarter of 2022. In the quarter, LFL accumulated C$48.9 million in adjusted net income, or 72 cents per adjusted diluted share, a 9.6% jump from 2022’s C$44.6 million in adjusted net income, or 67 cents per adjusted diluted share. Adjusted EBITDA for the quarter was C$96.1 million, giving LFL an EBITDA margin of 11.49%.
Wayfair touts active customer growth in improved fourth quarter
Online home goods seller Wayfair showed signs of improvement in its fourth quarter as total net revenue inched up by $13 million for a 0.4% year-over-year gain to reach $3.1 billion. The company, which does business under the Wayfair, Joss & Main, AllModern, Birch Lane, Perigold and Wayfair Professional nameplates, also saw its active customer numbers jump by 1.4% to reach 22.4 million as of Dec. 31. Orders per customer rose to 1.84 in Q4 2023 vs. 1.81 in the same quarter in 2022, and there were more repeat customers ordering in the fourth quarter: 79.4% vs. 77.4% in Q4 2023. However, net revenue per active customer decreased by 3% vs. last year to $537 for the fourth quarter, and average order value per customer fell to $276 in Q4 from $283 a year ago. Total revenue for the quarter was made up by $2.7 billion in U.S. net revenue, which rose by 0.9% over last year for the quarter ended Dec. 31. International remained down, however, falling by 2.7% vs. last year to account for $404 million in net revenue. Gross profit for the quarter was $944 million, or 30.3% of total net revenue, while net loss was $174 million. Non-GAAP adjusted EBITDA was $92 million.
The Citizenry becomes latest acquisition for interior design service Havenly
Direct-to-consumer home furnishings brand The Citizenry has been acquired by online interior design and decorating service Havenly, which is continuing to build out its home brands and offerings. Within the past 24 months, Havenly has acquired The Inside, a direct-to-consumer home furnishings brand; and Interior Define, a custom furniture maker with 13 design studios nationwide. Terms of The Citizenry deal were not disclosed. The Citizenry, which was founded in 2014 by Rachel Bentley and Carly Nance and was named one of Inc’s fastest growing private companies in 2023, also has been in a growth mode, expanding within the past year into bedroom furniture and upholstered seating after initially launching the business with a focus on globally inspired home décor, accent furniture, bedding and rugs. Under the acquisition, Bentley will serve as president of The Citizenry, while Nance will transition to the role of executive brand advisor, overseeing the product pipeline, creative direction and storytelling. Also being retained are Todd Wandell, chief product officer, and Paulo Kos, vice president of design and development. The Citizenry has 45 employees.
Jewelry & Luxury
Move Over, Barbie. LVMH Starts TV and Film Division
Will a gritty reboot of Breakfast at Tiffany’s be coming soon to your favorite streamer? LVMH has started 22 Montaigne Entertainment, a division that will develop television and film ideas for its stable of 75 brands. In conjunction with brand content consultancy Superconnector Studios, the new LVMH entity will try to find the right match between LVMH’s brands and entertainment creators, producers, and distributors. The luxury behemoth may co-develop, coproduce and co-finance certain properties. 22 Montaigne Entertainment will be overseen by a committee of LVMH executives, including Antoine Arnault, the head of LVMH Image and Environment (and son of LVMH’s founder Bernard), and Anish Melwani, chairman of LVMH North America.
Victor Wembanyama becomes a brand ambassador for Louis Vuitton
In his first NBA season, Victor Wembanyama has established himself as one of the most interesting players in the league. Whether it be his unique style of play, proclivity for early nights in with science-fiction novels or interesting fashion choices. Now he will represent one of the biggest luxury brands in the world. On Tuesday, GQ reported that Wembanyama will be the newest brand ambassador for Louis Vuitton. “To me it made a lot of sense to partner with LV—you know, French excellence,” Wembanyama told GQ. “The expertise is something that I feel very much attracted to.” Vuitton made his draft day suit, which wowed with it’s chic all-black look that seemingly blended together. It equally showed off Wemby’s height while downplaying it. We haven’t seen him wear something quite like that since.
Office & Leisure
Squishmallows and Build-A-Bear enter legal battle over ‘copycat’ plush toys: What to know
There is nothing soft about the lawsuits being thrown around by Squishmallows and Build-A-Bear, who are going to court as the popular squishy toy company accuses the stuff-your-own-plush brand of copying its stuffed animals. Warren Buffett’s Berkshire Hathaway’s company Jazwares, who acquired KellyToys, the company that created Squishmallows, filed an intellectual property lawsuit against Build-A-Bear in California last week in the United States District Court for the Central District of California, stating Build-A-Bear’s new line of stuffed animals, Skoosherz, is a knock-off of the popular Squishmallows plush toys. “Instead of maintaining its original idea of allowing consumers to create their own toys, Build-A-Bear now seeks to trade off the goodwill of Squishmallows by marketing obvious copycat products,” states the complaint. Now, the company is seeking unspecified damages and wants Build-A-Bear to stop selling Skoosherz products. But Build-A-Bear filed its own lawsuit, saying the trade dress rights are baseless. Jazware’s attorney, Moez Kaba, told USA Today that Build-A-Bear’s designs are very similar to some of Squishmallows’ most popular designs. Build-A-Bear fired back by filing a lawsuit in Missouri that states its new line doesn’t infringe on Jazware’s rights.
Best Buy Is Out of the DVD and Blu-ray Business, and Now So Is Disney
Last year, Netflix finally stopped shipping those iconic red envelopes out; earlier this year, Best Buy disassembled its DVD and Blu-ray racks. And now Disney is taking a similar hike to a land far, far away from physical media. Disney is in the process of transitioning its physical home entertainment business to a licensing model, an individual with knowledge of the decision told IndieWire. The studio will start with a licensing agreement with Sony, which will see Sony handle marketing, selling, and distributing physical media (4K Ultra HD, Blu-ray, DVD, etc.) of any new Disney releases and older catalog titles to consumers via retailers and distributors in the U.S. and Canada. Don’t panic and think this means no more Disney movies on DVD – it’s simply a different company doing the grunt work and getting a cut. Disney will also still be handling home entertainment for digital media, such as anything released through VOD. According to Disney, this move enables the studio to more efficiently offer its films and TV shows via DVD through physical retailers. It is currently unclear if there are layoffs to come in Disney’s home entertainment business.
Technology & Internet
Google to start making Pixel phones in India by next quarter
Google plans to starts producing its Pixel smartphones in India by the next quarter, according to a Nikkei Asia report on Thursday. The U.S. tech giant has been striving to diversify its supply chain away from China amid U.S.-China tensions, while seeking to capitalize on the booming smartphone market in India, the report added. The shift will support Google’s ambitious target of shipping more than 10 million Pixel phones this year, the report said citing a person with direct knowledge of the matter. The report also said Google will begin manufacturing Pixel 8 Pro phones in the April-June quarter, followed by the production of the Pixel 8 around the middle of 2024.
Reddit files to list IPO on NYSE under the ticker RDDT
Social media company Reddit filed its IPO prospectus with the Securities and Exchange Commission on Thursday after a yearslong run-up. The company plans to trade on the New York Stock Exchange under the ticker symbol “RDDT.” Its market debut, expected in March, will be the first major tech initial public offering of the year. It’s the first social media IPO since Pinterest went public in 2019. Reddit said it had $804 million in annual sales for 2023, up 20% from the $666.7 million it brought in the previous year, according to the filing. The social networking company’s core business is reliant on online advertising sales stemming from its website and mobile app. The company, founded in 2005 by technology entrepreneurs Alexis Ohanian and Steve Huffman, said it has incurred net losses since its inception. It reported a net loss of $90.8 million for the year ended Dec. 31, 2023, compared with a net loss of $158.6 million the year prior. Reddit is one of the most-visited websites in the U.S., according to analytics firm Semrush, but it has struggled to build an online advertising business comparable to those of tech giants such as Facebook parent Meta and Google parent Alphabet. Reddit has more than 100,000 communities, 73 million average daily active uniques, or DAUq, and 267 million average weekly active uniques, according to the filing. As of the fourth quarter of 2023, Reddit’s U.S. average revenue per user, or ARPU, was $5.51, down from $5.92 from the previous year.
Finance & Economy
Consumer spending and debt are up as US economy begins rebound
Retail and food service purchases hit an estimated $700.3 billion in January 2024, a 0.6% rise from the year before, Census Bureau data shows. Growing purchases, paired with other debt, has helped increase household debt. In Q4 2023, total U.S. household debt increased to $17.5 trillion in Q4 2023, a report released by the Federal Reserve of New York said. This spending may add to consumer debt but can help the economy overall. Consumer spending accounts for a large portion of the country’s Gross Domestic Product (GDP). When consumers are spending more, this typically means the economy is growing.
Applications for US jobless benefits fall again as labor market powers on
The number of Americans applying for jobless benefits fell to its lowest level in five weeks, even as more high-profile companies announce layoffs. Applications for unemployment benefits fell by 12,000 to 201,000 for the week ending Feb. 17, the Labor Department reported. The four-week average of claims, a less volatile measure, fell by 3,500 to 215,250, down from 218,750 the previous week. Many economists expected the rapid rate hikes to weaken the labor market and potentially tip the country into recession, but it hasn’t happened. Jobs have remained plentiful and the economy has held up better than forecast thanks to strong consumer spending.
