An important skill as an investment banker is to work with clients to project companies’ future financial performance. Whether dealing with investors, lenders, or shareholders, all want to know how management sees the next few months, quarters, and years playing out. In the process of developing projections, company management spends hours trying to prognosticate what market conditions and consumer sentiment will be in the future and how their company will perform. Ultimately, projections typically end up reflecting “management’s best estimate,” with possible future outcomes existing both above and below that estimate.
Beyond management’s best estimates, the “best” and “worst” case scenarios often receive attention. Historically, many executives have been adept at identifying and quantifying upside scenarios, and made efforts to clearly articulate how the company might perform if all the stars aligned. However, management often spends less time quantifying, and very few stakeholders hear much about, downside scenarios. If there is one thing that the past couple years has done, it has recalibrated everyone’s perception of worst-case scenarios.
It was not that long ago that retailers would recall nightmare scenarios of devasting ice storms that kept a number of stores closed for as long as a week. Or the time that a labor disruption at an overseas manufacturing facility stopped production for a couple weeks, setting back delivery schedules. Prior to March of 2020, it was hard to envision a scenario where large swathes of the globe’s retail locations and manufacturing facilities would be closed for months. Even the day-to-day effects of the most recent national crisis, 9/11, were mostly confined to changes in air travel, which, within a couple months, returned to near normal levels of operation (while, admittedly, the psychological impacts of 9/11 lasted much longer).
When COVID hit, most of the U.S. population anticipated a few weeks of disruption to their normal routine. Who can forget the government’s “15 Days to Slow the Spread” campaign launched in mid-March 2020, which gave many the impression that we were just days away from getting control of the COVID “situation.” And yet here we are, over two years later, and the nation is just starting to emerge from the COVID shock that impacted nearly every aspect of our lives. Ever since the pandemic, when new crises hit, such as the invasion of Ukraine, politicians, news outlets, business owners and the general public are more willing and able to contemplate and acknowledge the worst-case scenarios, even if some of them are terrifying to imagine.
The onset of COVID forced companies to remove their rose-colored glasses and focus on potential downside scenarios. But rather than trying to quantify the impact of COVID, many businesses punted, with over half of the S&P 500 declining to offer annual guidance for FY 2020 and FY 2021.
In today’s economic environment, there are several headwinds that businesses are facing: wavering consumer confidence, labor shortages, supply chain disruption, record high gas prices, rising shipping costs, etc. Some of these may be temporary phenomena, but others may persist. Are businesses prepared to react accordingly if any of these develop into a full-fledged crisis? In a recent survey by McKinsey of 1,500 corporate directors, only seven percent of respondents gave their organization the highest rating at risk management, and only 40 percent said their company is prepared for the next large crisis.
Management, which has been trained over the years to focus on identifying and exploiting growth opportunities, must now have a clearly articulated plan to deal with risk factors that lead to downside scenarios. Managing a business with the mindset that threats are short-term in nature is obsolete, because, as we have learned firsthand, certain crises can last years. Executives are now expected to be better at managing businesses through crises and to deliver good results regardless of the situation.
Headline of the Week
Bed Bath & Beyond strikes deal with activist investor
Bed Bath & Beyond announced this that it has reached a cooperation agreement with activist investor Ryan Cohen and RC Ventures LLC, the beneficial owners of approximately 9.8% of the company’s outstanding shares. Earlier this month, Cohen – co-founder of Chewy.com and chairman of GameStop – asserted that the company should consider a number of options to improve the business, which included selling off the entire company or its Buybuy Baby division. He is partially getting his wish. Bed Bath & Beyond will add three independent directors to its board, two of whom will join a new four-member committee focused on unlocking greater value for Buybuy Baby. The new directors involved in that exploration include Marjorie Bowen, who has served as a director of companies such as Centric Brands, Genesco, Navient, Sequential Brands and Talbots; and Ben Rosenzweig, a partner at Privet Fund Management, who has experience in mergers and acquisitions.
Apparel & Footwear
Victoria’s Secret & Co. Announces Acquisition of Minority Interest in Frankies Bikinis
Victoria’s Secret & Co. announced its acquisition of a minority interest in Frankies Bikinis, LLC, a women-founded and women-led beachwear and lifestyle brand located in Venice, California. Frankies Bikinis was founded in 2012 by then 17-year-old Francesca Aiello and her mother, Mimi Aiello. The brand is widely known and recognized for its innovative, inclusive, and trend-setting aesthetic and laid-back Malibu vibe. Martin Waters, Victoria’s Secret CEO, commented “We are excited to be partnering with Francesca and the team at Frankies Bikinis. She has created an aspirational beachwear brand and trend leader in the swimwear category, with room to grow and extend into new categories and attract new customers in the direct-to-consumer channel. Our investment in Frankies Bikinis is a continuation of our efforts to expand partnerships with culturally relevant brands founded by women entrepreneurs.” The Company invested $18 million for a minority interest and does not anticipate that this investment will have a material impact on the previously communicated first quarter 2022 outlook.
L.L. Bean sales spiked 14% last year as more consumers played outdoors
L.L. Bean in a press release Friday said it closed out its 2021 fiscal year with net revenue up 14% from 2020 to $1.8 billion. As a privately held company, the retailer didn’t disclose most other financial metrics. The company said its sales rose thanks in part to heightened “consumer interest in the outdoor lifestyle,” plus its investment in omnichannel, wholesale, 800 new products across all categories, and international expansion. The company said it saw record demand for men’s and women’s apparel and double-digit growth in a range of categories, including active apparel (driven by last year’s athleisure launch), camping and hiking, outerwear, winter sports, kids and travel. Compared to many other retailers, L.L. Bean was positioned well to withstand the complications the pandemic visited upon retail in the last couple of years. The company is sharing its windfall with its 5,500 or so employees, with its board approving a 20% performance bonus for their annual pay in the form of cash plus a retirement plan contribution. Smith praised the company’s global workforce for “incredible resilience and agility in the face of an ever-changing retail environment and never-before-seen supply chain challenges.”
Balance Athletica to Change Name Following New Balance Lawsuit
Balance Athletica, a Denver-based athleisure brand, has agreed to change its name after New Balance Athletics Inc., filed a trademark infringement lawsuit against it la little over a year ago. According to court papers filed in Massachusetts in November 2020, New Balance said Balance Athletica used a “confusingly similar mark…to sell the same goods to the same consumers, using the same marketing channels.” It said Balance Athletica’s use of the mark “appears to be part of a larger plan to deliberately free ride on New Balance’s famous brand.” New Balance said Balance Athletica filed a trademark application with the United States Patent & Trademark Office for “Achieve Balance” for footwear and apparel, among other products. But “since the late 1990s,” New Balance has exclusively used the mark “Achieve With New Balance” in its advertisements and on its products. And the “Achieve” mark has been on nearly every one of the millions of shoeboxes it sold. The case was closed in September 2021 and on Monday, Balance Athletica said it was changing its name to Vitality.
Athletic & Sporting Goods
Adidas announces new network that will allow more than 50,000 student-athletes to be paid ambassadors
Adidas announced a new “name, image and likeness” network that will be open to student-athletes at NCAA Division 1 Adidas-sponsored schools. The new program will allow more than 50,000 students across 23 sports at 109 schools the ability to become paid spokespeople for the brand. The company says the program will launch in phases over the next 12 months, beginning with historically Black colleges and universities and Power Five conference partners this fall, and then scale across other participating schools by April 2023. Adidas did not disclose how much student-athletes will be compensated if they choose to participate in the program. Student athletes will initially be paid a percentage of the sales they drive at adidas.com or the adidas app, as well as the ability to be paid per social media post.
Hydrow Reaches $255M in Total Funding
Rowing-machine maker Hydrow announced it has raised $55 million in a Series D funding round led by Constitution Capital. Rx3 Group Partners, Liberty Street, Activant Capital, and Sandbridge Capital also took part in the round, as did LVMH-backed L Catterton — which has also invested in fitness companies Tonal, Peloton, Equinox, ClassPass, Xponential, and Sweaty Betty. The company’s total funding exceeds $255 million, but Hydrow founder and CEO Bruce Smith says there’s still room for growth, highlighting that the overall penetration of connected fitness compared to the total market is under 10%. Last year, the company was reportedly exploring an IPO or going public via SPAC merger at a valuation of more than $1 billion. The company’s revenue tripled 2020’s haul in 2021, per CNBC. Hydrow counts more than 200,000 users.
Cosmetics & Pharmacy
Whole Foods Market Predicts the Next Big Beauty Trends for 2022
Whole Foods Market has been in the beauty business since it was founded in 1980. While clean beauty and wellness have become mainstream, the Amazon-owned grocery store remains a beauty destination with over 500 locations. As a part of its Beauty Week, the Whole Foods Trends Council predicts ingredients and product trends for 2022. “Consumers continue to invest in beauty as we’ve adjusted to a new normal, and we’re seeing a focus on conscious and at-home beauty treatments,” said Jen Coccaro, Vice President of Whole Body Merchandising at Whole Foods Market. “Our customers are keeping a close eye on ingredients as they experiment with new items and come to us for our standards that go beyond typical ‘clean beauty’ claims and ban more than 180 ingredients.”
Indian Vegan Beauty Brand Plum Raises $35M in Series C Round
India-based beauty brand Plum has secured $35 million in funding. The round was led by A91 Partners, with participation from others including Unilever Ventures and Faering Capital. This latest round brings the total amount raised by Plum to over $50 million, following a $14.9 million Series B round in late 2020 and a Series A round from Unilever Ventures in 2018. Plum says it will use the new funding to expand across more categories and channels, as well as to launch in new markets. As part of the transaction, Abhay Pandey of A91 Partners will join Plum’s board. Plum produces makeup, skincare, and haircare products which are all vegan and toxin-free. The brand saw a dramatic increase in sales during the pandemic, as more consumers turned to online shopping. Pureplay Skin Sciences, which owns the brand, saw total revenue of Rs 53 crore ($6.9 million) in the 2020 financial year, compared to Rs 22 crore ($2.9 million) the previous year.
The Top Five Trends Fueling Global Beauty Purchases
The beauty industry has become the most digitally sophisticated retail vertical in e-commerce today. With e-commerce sales predicted to account for nearly half of all beauty purchases in the US in 2022, and global penetration to grow to more than 27% within the next three years, brands are now fully embracing new channels and formats for reaching a wider audience. Consumers of all ages aren’t limiting themselves simply to buying local brands either—more and more beauty shoppers are discovering and buying products from outside their home country. Brands and retailers must be prepared to leverage the macro trends that will continue to propel global DTC sales in cosmetics, skincare, and fragrances. Here are the top trends leading the global beauty boom.
Discounters & Department Stores
Walmart sues BJ’s for alleged infringement on its Scan & Go tech
Walmart filed a lawsuit against BJ’s Wholesale Club claiming the latter infringed on patents related to its Scan & Go self-checkout function. In its complaint, Walmart said BJ’s Express Pay self-checkout technology was “strikingly similar” and offered “nearly identical functionality” as the company’s Scan & Go feature used at Sam’s Club. Walmart is seeking an injunction against BJ’s and unspecified monetary damages. A BJ’s spokesperson said the company will not comment on pending litigation.
Target, Amazon debut sustainable store concepts
With consumers prioritizing environmental sustainability, Amazon and Target unveiled stores that aim to use less energy than they produce, the retailers announced last week. Target’s first net zero energy store is located in Vista, California, and the new Amazon Fresh store, which is pursuing net zero carbon certification, is located in Seattle. The new Amazon Fresh Seattle location features a CO2-based refrigeration system, steel byproducts to reduce embodied carbon and electricity sourced from the company’s renewable energy projects. Target’s store has solar carports, an electric HVAC system, CO2 refrigeration and LED lighting. Drawing from its experience, Target said it plans to add CO2 refrigeration to all of its stores by 2040. Amazon said that some of the upgrades will be used at all of its Amazon Fresh grocery stores going forward, such as the lower-carbon concrete flooring.
Inside Macy’s plan to scale its budding retail media business
Macy’s is betting bigger on its retail media network at a transitional point for digital marketing that has seen rivals chase similar ambitions. The push also arrives as Macy’s vies for a reinvention on the consumer-facing end, with a new “Own Your Style” brand platform unveiled last week that carries streamlined web design and a spotlight on personalization. With a more robust suite of ad products on tap, the department store chain’s retail media team is narrowing in on richer media formats and plans to launch a self-service marketplace later this year. Helping enable the unit’s speed and scaling efforts is Macy’s focus on handling most operations internally, according to executives.
Emerging Consumer Companies
Better & Better, New York-based wellness brand, raises $4 million
Better & Better, a New York-based company innovating the wellness industry with vitamin-infused products incorporated into everyday habits, announced $4 million in funding led by newly-founded global fund Fifth Quarter Ventures (FQV), and supported by Will Smith and Keisuke Honda’s Dreamer’s Fund, Azure Capital, Alpaca Ventures, and other investors. Launched in 2020, Better & Better now offers science-backed, 2-in-1, natural, vegan toothpaste formulas for the delivery of vitamins in the mouth, plastic-free natural floss, and a bamboo toothbrush.
Native Pet, a St. Louis-based pet nutrition company that makes all-natural, highly effective, and limited ingredient pet supplements for dogs, announced today the closing of $6 million in Series A funding led by CAVU Venture Partners with participation from Mars’ Companion Fund and Selva Ventures. Launched in 2017, the brand intends to use this round of capital to continue that strategic growth online and at retail locations, while expanding its portfolio of whole-food pet supplements.
Food & Beverage
Private equity firm Goode Partners takes minority stake in Jocko Fuel
Private equity firm Goode Partners LLC has made a $30 million minority investment in Jocko Fuel, a maker of sports and lifestyle nutrition products. Co-founded by Pete Robert and Brian Littlefield, Jocko Fuel is named after Jocko Willink, a retired navy seal officer, author, podcaster, entrepreneur and media personality known for promoting healthy lifestyles. Mr. Willink has guided the formulation and development of Jocko Fuel’s products with his disciplined approach to health. The Wilton, Maine-based company offers products for performance-driven consumers in a variety of formats, including clean energy drinks, powders and capsules.
US Plant-Based Sales Reach New Record in 2021
Despite the economic hardships of the global pandemic, supply chain issues, and inflation, new data has shown the plant-based industry in the US continues to expand. Retail sales of plant-based foods grew 6.2% in 2021 bringing the total plant-based market value to a record high of $7.4 billion. According to market research by the Plant Based Foods Association, The Good Food Institute, and SPINS, plant-based food retail sales grew three times faster than total food retail sales, with most plant-based categories outpacing their conventional counterparts. Innovation and variety in plant-based meat, egg, and dairy alternatives drive growth as consumers continue to turn to vegan products.
Grocery & Restaurants
Grubhub sued by Washington, D.C. for excessive fees and false advertising
The District of Columbia is accusing Grubhub of deceptive business practices, according to a lawsuit filed Monday. The lawsuit claims that Grubhub deceives both customers by obscuring fees and failing to disclose menu practice increases, and restaurant operators by adding them to the Grubhub directory without their consent. “We are seeking to force Grubhub to end its unlawful practices and be transparent so D.C. residents can make informed decisions about where to order food and how to support local businesses,” D.C. Attorney General Karl Racine said in a statement sent to the Associated Press. According to the lawsuit, there are 1,000 “partner restaurants” in the Washington, D.C. area that are listed on the app that don’t currently have contracts with Grubhub. According to the lawsuit, the company was also deceptive in how it listed promotions: “Grubhub deceptively marketed its Supper for Support promotion to consumers as a way for them to save money, while at the same time supporting local independent restaurants that had been affected by the decline of business due to the COVID-19 pandemic,” the lawsuit said. “The promotion advertised that consumers who placed orders from 5 p.m. to 9 p.m. each day, during the promotion, with any of Grubhub’s participating Partner Restaurants would receive $10 off their orders of $30 or more. However, contrary to its advertisements, this promotion did not actually support restaurants—as the restaurants, not Grubhub, were required to foot the full cost of the $10 off promotion.”
BLT Steak owner files for bankruptcy after being unable to pay back PPP loans
BLT Restaurant Group — the parent company of New York City-based BLT Steak and BLT Prime — filed for bankruptcy with the New York Southern District Court on Monday, after 40% of the company’s Paycheck Protection Program loan ($1.3 million of $3.3 million) was not forgiven by the federal government. According to the bankruptcy documents, after initially receiving the PPP loan in April 2020, BLT Restaurant Group was unable to “restart and engage” multiple locations due to pandemic-related capacity restrictions and was unable to convince many employees to return to work in order to comply with the terms of the PPP loan, resulting in the federal government’s rejection of 100% loan forgiveness. On top of this, BLT Restaurant Group says that the company applied for the Restaurant Revitalization Fund program within five hours of the program opening up to independent restaurants, and despite being eligible for up to $7.1 million, was ultimately locked out after the company had to resubmit financial information in its application.
Home & Road
Vietnam hopes to boost its wood, furniture exports by $9 billion
The Vietnamese government is aiming to hit $20 billion in timber and wood product exports by 2025, an increase of more than $9 billion from the current number. Vietnam surpassed longtime giant China in 2020 to become the largest furniture exporter to the U.S., marking one of the most dramatic industry shifts in recent history. According to Furniture Today research, the country’s furniture exports to the U.S. surged to $5.1 billion in the first half of 2021, an increase of 76% over 2020. Now, a recently approved plan from the government details steps on how the country will vastly upgrade and expand its wood processing industry by 2030. Specifically, it will invest heavily in technology to attract investment from wood processing companies; build an international furniture exhibition center; and prioritize production of furniture, outdoor products and artificial wood plank products.
Herman Miller doubling presence in NYC
Herman Miller, part of Top 100 MillerKnoll, is adding a pair of showrooms in New York City this spring. On March 22, it opened a new experiential retail store on Gansevoort Street in Meatpacking, with another location to follow in Williamsburg, Brooklyn, in mid-April. The opening of the Meatpacking and Williamsburg stores will bring Herman Miller’s retail presence in New York City to four locations, including its flagship at 251 Park Avenue South. The two new spaces are the 12th and 13th stores of their kind, following launches in major cities nationwide including Austin, Boston, Dallas, Houston, Los Angeles, San Francisco, Seattle and more. The Herman Miller Meatpacking and Williamsburg stores, 1,750- and 1,460 square-foot spaces respectively, will each have performance specialists on-hand to help shoppers better understand the ergonomic and productivity benefits of sitting well. Officials note that Herman Miller’s new retail experiences are designed to guide customers to make informed and confident purchasing decisions for how they live, work and play.
Jewelry & Luxury
Two-Thirds of Tiffany Staff Departed in Year After Acquisition
A little more than a year after it was acquired by LVMH, about one-third of Tiffany’s staff consists of “originals” who are still with the famed jeweler, president and CEO Anthony Ledru told WWD in an interview published on Friday. LVMH veterans comprise about one-third of the jeweler’s current workforce, with the final third coming from outside both companies, Ledru told WWD. Tiffany & Co. has more than 13,000 employees, it said on LinkedIn. It is extremely common for workers to depart or be fired following an acquisition. Typical attrition rates following takeovers are estimated at being between 20% and 33%. One study concluded that “approximately 50–75% of key managers leave voluntarily within two to three years after a company has been acquired.”
Diamond Foundry Sues U.S. Over Chinese Tariffs
Lab-grown diamond manufacturer Diamond Foundry has filed a lawsuit against the U.S. Trade Representative, U.S. Customs and Border Protection, and the U.S. government, among others—because, it says, the import tariffs on the diamonds it cut and polishes in China are too high. The San Francisco–based company’s amended complaint, filed March 17 at the U.S. Court of International Trade, was stayed the same day, due to an administrative order. In a post titled “Why We Are Suing the United States Trade Office,” Diamond Foundry complained that, because of tariffs first imposed by former President Donald Trump, the “polishing of diamonds in China was included with a penalty that exceeds the cost of the contract manufacturing service added in China.
The Fantastical World Of Lab-Grown Design
Much of the talk among retailers of lab-grown diamonds (LGD) centers on value for money—the fact that consumers are able to get bigger lab-grown diamonds at lower prices than their mined counterparts. But Ben Hakman, managing director of Fire Diamonds, a company that specializes in designing unique diamond cuts using cutting-edge laser sawing and laser marking technologies, thinks the industry has it all wrong. “There’s a consumer who wants lab-grown diamonds, and it has nothing to do with natural,” he tells JCK. “They’re interested in getting diamonds that are not available in natural.” Take, for example, a trio of fantastical creations that recently underwent Fire Diamonds’ proprietary color-enhancement process and were graded by IGI, including a 13.2 ct. fancy vivid blue diamond shaped like a hamsa, a 10.16 ct. orangy-red diamond fashioned into a cross, and an 8.96 ct. vivid green diamond that resembles a cannabis leaf.
Office & Leisure
GameStop hit with $30M lawsuit from turnaround consultants
Boston Consulting Group filed a lawsuit against GameStop that seeks $30 million in damages over the retailer’s alleged “bad faith refusal to pay fees” owed to the consultancy under a written agreement. More specifically, the firm said in its complaint that, starting in mid-2020, GameStop has “refused to pay significant amounts” of BCG’s fees and demanded discounts “with no justification,” as well as refused to continue “contractually-obligated meetings” tied to its fees. According to BCG, the consulting firm started working with GameStop in 2019, when the company was “on life support” and “[h]emorrhaging customers.” BCG was brought on to “evaluate its operations and develop solutions that would enable a corporate transformation to ensure its continued viability,” according to the firm. BCG said the agreed-on fee structure for its work with GameStop was based on projected profit improvements resulting from the firm’s recommendations.
Petco eyes revenue growth, rural store format
Petco Health and Wellness Company Inc. is confident that shoppers will keep spending on their pets even amid inflation and other economic challenges. The specialty pet retailer unveiled its longer-term financial framework, as well as its strategic and capital priorities, in the warm-up to its annual Investor Day. Long-term, Petco expects revenue growth in the high single digits and adjusted net income growth in the low single digits. Petco is also reaffirming its fiscal year 2022 guidance, including net revenue of $6.15 – $6.25 billion and adjusted earnings per share of $0.97 – $1. The company is also testing what it calls “small town rural” store concepts in key strategic locations and driving brand awareness and penetration in low-share markets. “Petco is on one of the steepest growth trajectories in all of retail, supported by our position as the only fully integrated provider of pet health and wellness across products, veterinary and services, digital, and in brick and mortar channels,” said Ron Coughlin, chairman and CEO of Petco.
Exclusive: FTX buys Good Luck Games in quest to convince gamers to love NFTs and blockchain
FTX is acquiring Good Luck Games, makers of the card-based auto-battler Storybook Brawl. This purchase marks both the company’s first foray into in-house game development, and a milestone in its ongoing effort to make blockchain-based digital objects an accepted business model in the gaming category. Gamers have not been receptive to early attempts to introduce blockchain-based technologies such as NFTs and cryptocurrency into their games. Initial endeavors have resulted in everything from customer boycotts, to internal protests from development staff, to customer outcry so vitriolic it resulted in immediate cancelations of once-lauded plans. FTX’s leadership hopes Good Luck Games and Storybook Brawl will serve as not only a display case for what it can offer to customers, but also as a pool of in-house advisors tasked with helping FTX Gaming, “care about the right stuff.”
Technology & Internet
Apple planning iPhone subscription that could launch this year, report says
Apple is preparing a hardware subscription service for iPhones that could launch as soon as the end of this year, Bloomberg reported Thursday. The service would allow customers to buy an iPhone through monthly payments, similar to how users currently subscribe to iCloud, according to the report. The move would represent the culmination of a longtime Apple investor desire for the company to sell its hardware as a subscription. Doing so would boost recurring revenue and could lead to an increase in the stock price. Analysts have long been wary that Apple’s prodigious hardware sales are a “hits business” and believe that increasing predictable subscription revenue could prompt investors to value Apple more highly. In 2019, Cook was asked during an earnings call whether Apple would consider a hardware subscription. He didn’t shoot down the idea and suggested that Apple was working on similar products and something like it was already in effect. “In terms of hardware as a service or as a bundle, if you will, there are customers today that essentially view the hardware like that because they’re on upgrade plans and so forth,” Cook said during an earnings call. “So to some degree that exists today.”
DC attorney general’s antitrust lawsuit against Amazon thrown out in court
An antitrust lawsuit filed against Amazon by District of Columbia Attorney General Karl Racine was thrown out in court on Friday, according to a report by The New York Times. DC Superior Court Judge Hiram Puig-Lugo granted Amazon’s motion to dismiss the lawsuit, which accuses the e-commerce giant of anticompetitive behavior by preventing third-party sellers from offering lower prices for their products on other platforms, including their own websites. “We believe that the Superior Court got this wrong, and its oral ruling did not seem to consider the detailed allegations in the complaint, the full scope of the anticompetitive agreements, the extensive briefing, and a recent decision of a federal court to allow a nearly identical lawsuit to move forward,” Melissa Geller, a spokesperson for the Office of the Attorney General said in a statement to The Verge. The “nearly identical” lawsuit Geller points to is a class action complaint that goes after Amazon for similar reasons, and claims the company pressures sellers into selling products for an equal or lower price than what they offer elsewhere. Earlier this week, Seattle District Judge Richard A. Jones denied a part of Amazon’s motion to dismiss the complaint. Racine’s lawsuit, which was first filed in May 2021, cruxes on the same argument; it alleges Amazon’s restrictive policies harm consumers by forcing sellers to raise their prices on Amazon and other online platforms, as sellers must account for Amazon’s fees when pricing their products.
Finance & Economy
U.S. jobless claims plunge to lowest level since 1969
Initial jobless benefit claims fell by 28,000 to 187,000 in the week ended March 19, the U.S. Labor Department said. That’s the lowest level since September 1969. The number of people already collecting jobless benefits fell by 67,000 to 1.35 million. These so-called continuing claims are at their lowest level since the 1970s. With workers scarce, companies are not laying off workers. Federal Reserve Chairman Jerome Powell called the labor market “extremely tight,” noting that wages are rising at the fastest pace in a long time. Layoffs are expected to remain low for now. Once looming Fed interest rate hikes bite, there could be some pain in the labor market.
U.S. pending home sales approach two-year low; consumer sentiment slumps
Contracts to buy U.S. previously owned homes dropped to the lowest level in nearly two years in February, weighed down by a persistent shortage of properties, and activity could remain sluggish amid increasing mortgage rates and high house prices. The National Association of Realtors said that its Pending Home Sales Index, based on signed contracts, fell 4.1% last month to 104.9, the lowest level since May 2020. It was the fourth straight monthly decline in the index, which leads sales by a month or two. Pending home sales declined in the South, Midwest and West, but rose in the Northeast. Economists polled by Reuters had forecast contracts rebounding 1.0%. Pending home sales decreased 5.4% in February on a year-on-year basis.