The Weekly Consensus

The Weekly Consensus

Maeghan Thompson

Story of the Week

Unilever to split off its ice cream unit including Ben & Jerry’s

Unilever announced plans to separate its ice cream unit, which includes Ben & Jerry’s and Magnum, as part of a restructuring that will affect 7,500 jobs. The company added that its ice cream division, which generated 7.9 billion euros in revenue in 2023, would perform better as a stand-alone business. Unilever said the restructuring would allow it to become “a simpler, more focused company,” with four distinct business divisions across beauty and well-being, personal care, home care and nutrition. The ice cream division accounted for about 13% of Unilever’s 59.6 billion euros in total revenue in 2023.

Apparel & Footwear

Canadian apparel maker Gildan Activewear is up for sale

Canadian clothing maker Gildan Activewear said on Tuesday that its board has decided to put the company up for sale following a review by a special committee. The embattled Montreal-based company says it received a non-binding expression of interest from a potential purchaser that it did not name. It mandated two investment banks to look for additional bidders, according to a report by The Globe and Mail, citing two sources familiar with the matter. “The special committee determined that it was consistent with its fiduciary duties and in the best interests of Gildan to contact other potential bidders with a view to maximizing the value of any potential transaction,” a company spokesperson said. Gildan has been embroiled in a battle between its top stockholders, such as investment firm Browning West, and the board, which fired co-founder and then-CEO Glenn Chamandy in December and replaced him with Vince Tyra. In late January, Gildan said it would hold an annual and special shareholder meeting on May 28 amid the ongoing dispute to replace a majority of its board members and re-instate Chamandy as CEO.

 

Caleres Posts Earnings, Sales Beat for Q4, Outlines Cautious Guidance

Caleres reported better-than-expected results in the fourth quarter, though shares dipped slightly in pre-market trading on Tuesday after the company issued a cautious outlook for fiscal year 2024. The St. Louis-based company reported fourth quarter sales of $697.1 million, up 0.1 percent from the prior year and ahead of the $694.3 million expected by analysts surveyed by Yahoo. Adjusted net earnings were $30.8 million for the quarter, with adjusted earnings per diluted share of 86 cents, ahead of the 85 cents expected by analysts. Caleres president and chief executive officer Jay Schmidt said Caleres’ fourth quarter performance was largely driven by its brand portfolio, which “led the financial performance of the company,” he said in a statement. This segment includes the company’s owned brands, such as Vionic, Allen Edmonds, Naturalizer, Sam Edelman — which is marking its 20th anniversary — and more. Brand sales increased 4.5 percent in Q4 and delivered its “best-ever annual adjusted operating earnings, which topped $148 million,” Schmidt said.

 

  1. Jill manages to expand its fleet, by one store

Thanks in part to an extra week in Q4 last year, J. Jill on Wednesday reported that net sales in the period rose 1.2% year over year to $149.4 million, with total comps (same-store sales plus direct-to-consumer sales in 13 weeks), down 3.6%. Gross margin expanded to 67.3% from 64.4% a year ago, and net income more than quadrupled to $4.8 million. The women’s apparel retailer opened two new stores and closed one during the fiscal year, ending 2023 with 244 stores. J. Jill has come a long way since its near brush with bankruptcy during the peak of the pandemic. Upgrades to its merchandising and marketing have paid off, especially last year. The company even managed to open more stores than it closed for the first time in three years (if only by one). About a year ago, the retailer was in the midst of shrinking its footprint, but even then executives said the hope was to grow it again. Indeed, the retailer’s greatest success lies in its strong margins, according to analysts at William Blair. After working to control costs and rationalize its footprint, the company’s biggest challenge remains the macroeconomic backdrop. The retail sales results of the first two months of the year suggest further slowdown in discretionary spending, in part due to ballooning credit card debt.

 

Payroll Concerns Force Francesca’s to Trim Staff

Women’s specialty chain Francesca’s is slimming down its staff. The cuts are believed to be part of a plan to pull back on spending due to continued liquidity constraints. And payroll was said to be an area where cuts were needed because the company allegedly overspent in 2023, according to one source. The exact amount over budget couldn’t be substantiated, although there are rumblings that it was close to $1 million. The retailer’s liquidity problems have resulted in some vendors complaining that they haven’t been paid for nearly a year, while others said they have held back on shipments because they haven’t been paid in months. The company’s liquidity doesn’t appear to have improved, but a retailer’s slowest period also is typically in the months following the holiday season. That said, it is believed that product shipments from suppliers have remained lean thus far in 2024. The latest cost-cutting moves appear to be centered at the store level. Sourcing Journal was told that Francesca’s has eliminated some store leadership positions, opting instead to have managers covering more than one location in a move that creates a “multi-store leader” function.

 

 

Athletic & Sporting Goods

Nike Inc. Gets Wholesale Lift in Fiscal Q3 to Post Earnings Beat

Nike, Inc. reported fiscal third quarter revenues were slightly up on both a reported and currency-neutral basis at $12.4 billion for the three-month period ended February 29, 2023.  Revenues for the Nike Brand were $11.9 billion, up 2 percent on a reported and currency-neutral basis, as currency-neutral growth in North America, Greater China and APLA was said to be offset by declines in EMEA.  Nike Direct revenues were $5.4 billion, slightly up on a reported and currency-neutral basis.  Nike Brand Digital sales decreased 3 percent on a reported basis and 4 percent on a currency-neutral basis.  Wholesale revenues were $6.6 billion, up 3 percent on a reported and currency-neutral basis.  Revenues for Converse were $495 million, down 19 percent on a reported basis and down 20 percent on a currency-neutral basis, primarily due to declines in North America and Europe.

 

Leatt Corporation Investing in New Segments as Green Shoots Start to Appear

Although Leatt Corporation CEO Sean MacDonald admitted right up front on a conference call with analysts that 2023 was a challenging year for the cycling and motorcycle industries, he also noted that the fourth quarter represented the first signs of the green shoots of a recovery in certain areas.  Total global revenues in 2023 were $47.24 million for the the maker of protective equipment for adventure sports, a 38 percent decrease from a very strong 2022. Sales of the flagship Neck braces were $2.75 million in 2023, representing 6 percent of revenues for the year. The 49 percent decrease in revenues from 2022 was primarily attributable to dealers and distributors continuing to adjust ordering patterns and digest industry-wide inventory levels.  Body Armor products, which are comprised of chest protectors, upper body protectors, knee braces, knee and elbow guards, off-road motorcycle boots and mountain biking shoes, saw a 42 percent revenue decrease year-over-year to $22.58 million in 2023, representing 48 percent of total revenues for the year.

Cosmetics & Pharmacy

PAI Partners strikes €330mn deal for Italian haircare group Beautynova
French private equity group PAI Partners is to buy a majority stake in professional hair products maker Beautynova as it seeks to capitalise on the buoyant beauty market.  Paris-based PAI will acquire a 51 per cent stake in Beautynova for about €330mn from consumer-focused private equity firm Bluegem. Bluegem, which originally bought its 79 per cent stake in 2020 for €52mn, will sell its position to PAI and then buy back in for about 47 per cent. Milan-based Beautynova brands include Medavita and Urban Tribe. The company also develops haircare products aimed at professionals for treatments, colouring and styling, with 18,000 formulas so far.

Franworth Sells The Lash Lounge, Recapitalizes and Restructures

Franworth is pleased to announce it has sold its holdings in The Lash Lounge to Riverside Capital, as the anchor to their new boutique beauty platform. The terms of the deal were not disclosed. The Lash Lounge is a premier eyelash salon franchise, specializing in custom lash extensions, lash lifts, tinting, threading, and other ancillary services. Franworth and The Lash Lounge founder, Anna Phillips, a pioneer in eyelash extensions in the US, partnered when The Lash Lounge was a 6-unit locally owned and operated business in Dallas, TX. Franworth helped grow this early mover in the boutique beauty space, from 6 to over 130 open and another 140 units sold. This acquisition will be the third for Riverside’s platform, Head to Toe Brands, designed to be a leading multi-brand franchisor of beauty & personal care services franchises.

Beauty Incubator The Center Acquires Claudia Sulewski’s Brand Cyklar

Following last year’s $355 million sale of Naturium to E.l.f. Beauty, beauty brand incubator The Center has brought on another influencer-founded line: Cyklar. On Mar. 21, the company announced that it has acquired the body care line launched in October 2023 by Claudia Sulewski. A veteran lifestyle, wellness and beauty YouTuber with over 5 million followers across social platforms, Sulewski still owns a stake in the brand. Cyklar’s hero product is a $58 body cream that is sold in a refillable glass jar on its e-commerce site. Founded in 2020, The Center has become an anomaly in the beauty incubator space, both for its willingness to take bets on unexpected beauty influencers and its ability to sell its lines like Susan Yara’s Naturium to top conglomerates. The Center’s business model includes brands both incubated in-house and those acquired with influencers or industry experts at the helm. Beyond Yara and Naturium, Saltair was developed with model Iskra Lawrence, and Prequel, which launched in 2023, was created with Dr. Sam Ellis, a San Francisco-based dermatologist. It acquired Phlur and Make Beauty, and relaunched the labels with Chriselle Lim as owner and CCO and former Violet Grey and Glossier alum Carrie Barber, respectively.

 

Discounters & Department Stores

‘Built for a different era’: Macy’s CEO on why closing 150 stores is critical to its survival

With fresh leadership in place, Macy’s is executing on a transformation plan announced earlier this year. The 150 Macy’s stores slated for closure in the next three years make up 25% of the banner’s square footage but represent less than 10% of sales, CEO Tony Spring said during a discussion at Shoptalk on Sunday. The retailer has “too many locations that were built for a different era,” Spring said, adding that the company has “no choice” but to close stores if it wants to thrive and not just survive. As of Feb. 3 — a couple of weeks ahead of the latest store closing announcement — Macy’s Inc. had 718 stores across its portfolio, which in addition to its namesake banner includes Bloomingdale’s and Bluemercury. The breakdown at that time was 502 Macy’s, 57 Bloomingdale’s and 159 Bluemercury locations. The Macy’s banner had about 101 million gross square feet; overall the company said it had 101.3 million square feet.

Kohl’s expands home goods assortment by 40%

Kohl’s is enlarging its home assortment by 40%, with home goods and decor from the new effort already available in stores and online. The department store has been working over the past year to reposition and expand the assortment, and the early customer response is positive, Nick Jones, Kohl’s chief merchandising and digital officer, said in a statement. Marketing includes a pop-up in New York City and partnerships with home design experts, according to a company press release.

Nordstrom revives namesake brand

Nordstrom is reimagining its namesake brand with a new apparel collection of womenswear and menswear, according to a news release. The line will feature blazers, tailored pants, cropped jackets, dresses and patterned sets, per the company. In addition to apparel, the brand will also feature footwear, jewelry and accessories, including hats, earrings, rings and belts. The new namesake collection is available as of March 18 at Nordstrom stores and through its ecommerce site. The brand revamp comes after the retailer’s full-line Nordstrom sales fell 3% in Q4.

 

 

Emerging Consumer Companies

Baby and toddler brand, Lalo secures capital

Lalo, a popular brand for baby and toddler essentials in the U.S., has closed an equity investment round led by Forecast Labs, a division of Comcast. Founded in 2019, Lalo offers premium products for families, including highchairs, developmental toy boxes, and more. The brand has quickly become a household name, with over 1.5 million products added to baby registries in the past year. Lalo’s CEO, Gregory Davidson, emphasizes the brand’s focus on customer feedback and understanding the needs of parents and babies. The company is also committed to sustainability, using ethical materials and running a Re-Play program to reduce waste. Forecast Labs is impressed by Lalo’s dedication to sustainability and families, and plans to help the brand grow through a TV advertising program. Kyle Peters, an investor at Forecast Labs, praises Lalo’s thoughtful product design and mission that resonates with modern parents and grandparents.

Legends platform boosts kids’ confidence, receives $6 million in funding

Legends, a confidence-training platform for kids aged 7-11, has launched out of stealth with $6 million in seed funding. The platform aims to address the decline in confidence among children, with research showing a decrease from 60% to 38% between ages 12 and 14. Legends offers daily 5-minute confidence “workouts” for families, including inspiring videos about legendary figures and interactive exercises. Since operating in beta, over 90% of kids using the platform have shown improved confidence levels within the first 90 days. CEO Sonny Caberwal emphasizes that confidence is a skill that can be trained, not an inherent trait. In addition to the seed funding, Legends has raised $1 million to start the Legends Lab Foundation, a non-profit focused on improving accessibility to resources for confidence-building skills. Founded in 2021 and headquartered in San Francisco, Legends aims to innovate the $1.5 trillion education industry by providing accessible and affordable learning tools for families.

Baby Food Brand Amara Secures $20M in Series B Funding

Amara, an organic baby food brand, recently announced the successful closure of an oversubscribed $20 million Series B funding round. The minority financing was led by HumanCo Investments, with participation from Melitas Venture Capital and Touch Capital, among others. Founded by Jessica Sturzenegger, Amara has garnered attention for its proprietary methods in creating shelf-stable baby food. The company plans to utilize the funding to bolster its market presence, expand distribution channels, and diversify its product lines.

 

 

Food & Beverage

Peak Rock Capital affiliate acquires California ingredient, flavor supplier

An affiliate of Peak Rock Capital, a middle-market private investment firm, has acquired California Custom Fruits and Flavors (CCFF). Terms of the acquisition were not disclosed. California Custom Fruits and Flavors, which was founded in 1986 by Terry and Rose Ann Hall, processes and supplies fruits and flavors to manufacturers of yogurt, ice cream, baked goods, beverages and desserts as well as restaurant and coffee chains, according to the company. Mike Mulhausen, chief executive officer of CCFF, added, “After an exhaustive search, it became clear that Peak Rock is the right partner as we begin our next growth phase. Peak Rock truly appreciates our extraordinary culture, customers, and growth opportunities. Peak Rock brings a partnership mentality that will benefit our customers, suppliers, team members, and the entire organization.”

LactaLogics Closes $92M Financing

LactaLogics, a Port St. Lucie, FL-based company which specializes in human milk-based nutrition, raised $92M in funding. Funding sources included: 1) USDA Food Safety Loan: Supported by Magnolia Bank. 2) US Department of Energy CPACE Loan: Underwritten by Pace Equities with support from the State of Florida, St. Lucie County, and the City of Port St. Lucie. 3) Private investors. The company intends to use the funds to implement its human milk processing technology at its 71,000-square-foot facility located in Port St. Lucie, Florida. Led by CEO Glenn Snow, LactaLogics combines technology and donor care to bring human milk to babies. Through large-scale manufacturing, leveraging their proprietary Gentle-UHT™ processing technology, it is expanding access to human milk, ensuring a supply of critical nutrition.

 

 

Grocery & Restaurants

Wonder food delivery platform draws $700M funding round

Wonder, the New York City-based food delivery platform, has completed a $700 million funding round, nearly doubling its equity investment, the company said Tuesday. Wonder was created in 2018, initially featuring a fleet of trucks that delivered made-to-order meals directly to customers’ homes. At the beginning of 2023, it shifted its model to brick-and-mortar locations with delivery. The company operated 10 locations in New York City and New Jersey, and delivered meals by such chefs as Bobby Flay and Michael Symon. In February, it opened its eleventh unit inside a Walmart in Quakertown, Penn., as part of a pilot program aimed at testing where the concept could locate. “We plan to use this latest raise to continue driving these efforts across three distinct levers: expansion, research and development, and driving unit economics,” founder Marc Lore said in a LinkedIn post on the deal.

Shake Smart gets an investment form NewSpring Franchise

Shake Smart, a fast casual concept with blended drinks, acai bowls, wraps, and sandwiches, has received an investment from private equity firm NewSpring Franchise. Terms of the transaction were not disclosed. According to a release, Shake Smart will use the investment for rapid unit expansion on college campuses, where it currently operates more than 45 units in 20 states. It will also expand outside of the higher education space as consumers’ demand for healthy, convenient food options increases. “Shake Smart was founded to provide healthy, delicious, and nutrient-dense food and beverages to students and consumers with increasingly on-the-go lifestyles,” CEO/co-founder Kevin Gelfand said in a statement. “Our team has successfully grown the concept to over 45 locations across the U.S. I am excited to partner with NewSpring Franchise founders Satya Ponnuru and Patrick Sugrue as Shake Smart looks to accelerate unit openings even further in this next phase of growth. Their investment and operating experience will be integral as we continue our expansion.”

Home & Road

Stewart taking mantle of CEO at Gardner White

President Rachel Stewart, fourth-generation leader of Top 100 retailer Gardner White, has been appointed CEO, effective April 1. As Stewart steps into the role, succeeding her parents, Barbara and Steven Tronstein, industry veteran Brad Bailey will join the Warren, Mich.-based retailer as president. Barbara and Steven Tronstein will take on new roles as executive chair and chair, respectively. “Rachel’s strong leadership, innovative thinking and dedication to our employees, our company and our community give us confidence that she will continue to move Gardner White forward as she elevates to her new role as CEO of Gardner White,” said Barbara and Steven Tronstein in a joint statement. As one of the few female leaders in the industry, Stewart’s dynamic approach to business and community have established her as a respected and admired leader, innovator and trailblazer. With a strategic vision and an unrelenting drive for success, Stewart has been instrumental in Gardner White’s continued expansion in southeast Michigan to include 13 retail locations throughout metro Detroit, Ann Arbor and Saginaw, and a team of more than 1,000 employees and growing.

Kirkland’s credits ‘strategic repositioning’ for stronger Q4

Strategic changes are starting to pay off for Kirkland’s, operators of 330 Kirkland’s Home specialty home décor and furnishings stores, as the company achieved a comp sales increase in the fourth quarter along with improved gross margin and cash flow. For the 14-week quarter ended Feb. 3, Kirkland’s net sales were $165.9 million, up from $162.5 million in the previous 13-week quarter. On a 13-week comparison, comparable same-store sales were up 1.7%, including an 8.3% decline in e-commerce sales. The increase was attributed to an increase in store traffic and conversion, which was offset by a decrease in average ticket size. Kirkland closed nine stores during the quarter. “The fourth quarter marked our first full quarter of capitalizing on the strategic repositioning initiatives we’ve implemented,” said Amy Sullivan, CEO.

Four corners, four walls: Beyond chairman, CEO outline company initiatives for growth

During a final-day session at The Inspired Home Show, Beyond’s Marcus Lemonis and Chandra Holt took the stage to offer insights on the company’s upcoming strategies to become a “four corners of the property, four walls of a home” company to loyal existing customers and the consumers of the future. Lemonis, chairman, and Holt, CEO, told the audience that they are looking forward to telling the Beyond story to millions of consumers and vendors, across multiple platforms and in a variety of product categories. “There are three primary reasons I decided to get involved in the business,” Lemonis said. “First, as an e-commerce business, you have a distant relationship from the consumer. Second, the acquisition of Bed Bath & Beyond inspired me. I went with my mom every week to Bed Bath & Beyond, just before we ate tacos and she had a margarita. Third, the common thread that caused every business to fail is when the home life was not right. Home has to be right.”

Jewelry & Luxury

Gucci owner Kering tanks 14% after Asia profit warning, dragging down Europe luxury brands

Shares of French luxury group Kering plunged 14% on Tuesday after the company warned that Gucci sales look set to fall 20% year-on-year in the first quarter, amid declining Asia transactions. The rare profit warning forecasts overall group revenues to drop 10% in the first three months of 2024 on a comparable basis, setting the fashion house apart from other luxury lines LVMH and Hermes, which have remained resilient in the face of economic headwinds. Kering plunged to the bottom of the Stoxx 600 after a delayed open, dragging other European luxury lines with it. Shares of LVMH, Christian Dior and Hermes all fell more than 2% in early trading, while Burberry was down 5.7%. Kering was down 14.3% by 8:30 a.m. London time. “In a first half that Kering expected to be challenging, current trends lead the Group to estimate that its consolidated revenue in the first quarter of 2024 should decline by approximately 10% on a comparable basis, from last year’s first quarter,” Kering said in a statement.

 

Signet Thinks 2024 Will Be a Down Year for Jewelry

Signet expects that jewelry sales will decline this year, by around a “mid single-digits” percentage, CEO Gina Drosos told analysts on a conference call following release of the company’s financial results. “We’re seeing consumers continue to be value-oriented,” she said. “That’s how they were during [the fourth quarter] and Valentine’s Day: a late shopper, highly focused on value.” But Signet predicts a rebound in engagements in the second half of the year, which will fuel increased bridal sales. “Engagements reached a trough [last year],” Drosos said. ‘We are seeing engagements recover, as we were expecting they would. We expect a gradual improvement in engagement trends over the next three years. It takes a bit to recover.”

David Yurman Appoints New Chief Financial, People Officers

New York City–based jewelry brand David Yurman has appointed Chris Clipper chief financial officer and Robert Lepere chief people officer. In his new role, Clipper will oversee the company’s financial strategy and operations, reporting to company president Evan Yurman. Prior to joining David Yurman, Clipper served as CFO for Ralph Lauren North America and Nike North America. He began his career in investment banking. As chief people officer, Lepere will oversee talent acquisition, learning and development, and HR operations. He will report to chief administrative officer Emily Yueh, who started with David Yurman in 2022 as chief people and strategy officer.

 

Office & Leisure

Arts and crafts giant Joann files for bankruptcy, but stores will remain open

Joann — the craft store chain formerly known as Jo-Ann Fabrics — has filed for bankruptcy amid ongoing financial troubles. But DIYers need not worry just yet: The company’s more than 800 stores nationwide will remain open and its website will stay active as the Hudson, Ohio-based company restructures its finances. “We remain committed to our suppliers, partners, Team Members and other stakeholders, and are focused on ensuring we continue to operate as usual so we can continue to best serve our millions of customers nationwide,” Joann’s chief financial officer Scott Sekella said in a statement. Joann and certain affiliates have filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. As part of the court-supervised bankruptcy process, Joann expects to receive $132 million in new financing. It said it will also slice its funded debt by about $505 million, but that “customers[,] vendors, landlords, and other trade creditors will not see any disruption in services.” Additionally, Joann will become a private company again and will be delisted from the Nasdaq stock exchange, just two years after it went public in March 2021.

Why subscription giftbox DTC FabFitFun is buying PupBox from Petco

Nobody wants to be put in a box, even a company famous for putting things in boxes. Take FabFitFun, the DTC brand that’s sold subscription gift boxes targeted at women—with products spanning beauty, fashion, fitness, and wellness—for 12 years. It’s now expanding to target a member of the household who’s adorable (but not a child) and hirsute (but not a husband). The company has acquired PupBox, a monthly subscription box for dogs, from Petco, for a price that FabFitFun declined to disclose. Daniel Broukhim, co-CEO and co-founder of FabFitFun, told Retail Brew that PupBox will continue to “maintain its own identity and character.” Asked if it might bundle the two subscriptions together in the future for a cheaper price than getting them individually, he said such details are TBD. According to FabFitFun, 61% of its subscribers have dogs, well over the 44.6% of Americans overall who do, per American Veterinary Medical Association data. Launched in 2014 by Ariel and Ben Zvaifler, who are married and who built buzz for PupBox when they appeared on Shark Tank in 2016, the brand was acquired by Petco in 2017.

Technology & Internet

Reddit prices IPO at $34 per share, valuing company at $6.5 billion

Reddit, the 19-year-old website that hosts millions of online forums, priced its IPO on Wednesday at $34 a share, the top of the expected range. The offering brought in $519 million, according to a press release, and values the company at close to $6.5 billion. Reddit had planned to price the deal at $31 to $34 a share. Reddit’s public market debut on Thursday, under ticker symbol “RDDT,” will be the first for a major social media company since Pinterest’s debut in 2019 and one of the very few venture-backed tech deals of the past two years. Reddit sold 15.28 million shares in the offering, while existing shareholders sold another 6.72 million. The company is taking a haircut from its private market valuation of $10 billion in 2021 at the peak of the tech boom.

 

DOJ sues Apple over iPhone monopoly in landmark antitrust case

The Department of Justice sued Apple on Thursday, saying its iPhone ecosystem is a monopoly that drove its “astronomical valuation” at the expense of consumers, developers and rival phone makers. The lawsuit claims that Apple’s anti-competitive practices extend beyond the iPhone and Apple Watch businesses, citing Apple’s advertising, browser, FaceTime and news offerings. “Each step in Apple’s course of conduct built and reinforced the moat around its smartphone monopoly,” says the suit, filed by the DOJ and 16 attorneys general in New Jersey federal court. Apple shares fell over 4% during trading on Thursday. The Justice Department said in a release that to keep consumers buying iPhones, Apple moved to block cross-platform messaging apps, limited third-party wallet and smartwatch compatibility and disrupted non-App Store programs and cloud-streaming services. The challenge represents a significant risk to Apple’s walled-garden business model. The company says that complying with regulations costs the company money, could prevent it from introducing new products or services, and could hurt customer demand.

 

Finance & Economy

A bright spot of the U.S. housing market: Very little variable mortgage debt

In the face of spiked interest rates, U.S. homeowners have actually fared better than their international counterparts.  It boils down to the fact that the majority of U.S. homeowners hold fixed-rate mortgages, shielding them from the immediate impacts of rising interest rates. According to the Federal Reserve Bank of Dallas, a staggering 96% of residential mortgage debt in the U.S. is in the form of long-term fixed debt of at least 10 years.  In contrast, homeowners in countries such as the United Kingdom, Finland, Australia, Ireland, and Canada are far more likely to hold variable-rate mortgages, which are susceptible to readjustment in response to increased interest rates. Long-term fixed debt of at least 10 years accounts for less than 1.0% of the mortgage market in these countries.

Falling fertility rates pose major challenges for the global economy, report finds

Falling fertility rates are set to spark a transformational demographic shift over the next 25 years, with major implications for the global economy, according to a new study.  By 2050, three-quarters of countries are forecast to fall below the population replacement birth rate of 2.1 babies per female, research published Wednesday in The Lancet medical journal found.  That would leave 49 countries — primarily in low-income regions of sub-Saharan Africa and Asia — responsible for the majority of new births.  By 2100, just six countries are expected to have population-replacing birth rates: The African nations of Chad, Niger and Tonga, the Pacific islands of Samoa and Tonga, and central Asia’s Tajikistan.