In January, my colleague wrote in this space about the rising adoption of livestream selling by major American retailers as a means to connect with customers and drive sales in a world where COVID-19 has weighed on traffic to stores. He predicted that we’re only at the beginning of a wave of livestream retailing in America. Two months since, his prediction is looking pretty spot on.
As a refresher, livestream shopping – or live e-commerce – allows customers to watch live video hosted by real people and to purchase what they see at that moment. It is similar to home shopping channels, but the video is shown on the seller’s website or app or on a social media platform such as Facebook. Further, livestreaming is interactive in that viewers can ask questions or provide comments through video calling and chat. Effective livestreaming entertains as it informs and offers a far better depiction of the product than photos and straight video.
As my colleague observed in January, we in the U.S. are just getting familiar with livestream selling. However, this form of retailing took hold in China about ten years ago and has become big, really big. E-commerce livestreams accounted for $63 billion in revenues or a whopping 9% of China’s online sales last year. Some pundits estimate that these revenues will triple in just six years to nearly $200 billion.
But now here in the U.S., with the COVID-19 pandemic keeping shoppers at home, retailers are looking for new ways to not only sell products, but also to engage with existing and new customers. For many U.S. retailers, livestreaming is becoming an ideal solution. JCPenney, Tommy Hilfiger, Levi’s, and Walmart have all run shoppable livestreaming events since the end of 2020.
Since our last post on this topic, major department stores have started getting in on the action. Macy’s hosted its first livestream shopping event earlier this month, showcasing Adidas and Rebecca Minkoff, among others. And last Thursday, Nordstrom launched “Livestream Shopping” with a virtual shopping event featuring the Burberry brand. Nordstrom is also planning a spring beauty trend show featuring experts from brands such as Clinique, Tom Ford and Giorgio Armani.
As American retailers hone their live streaming skills, creating an engaging, human connection will be key. There are three commonly used approaches to achieve this. One approach uses influencers to drive organic brand awareness and product conversion. Both globally known stars (e.g., Kim Kardashian) and micro-influencers can create engaging content that leverages the audience’s trust in the influencer’s endorsement. In these cases, the retailers have to be cautious to not provide “content-scription” or control the dialogue, but at the same time they are in the hands of the influencer who could misstep.
Another approach is the associate-driven livestream that positions employees as product experts and brand curators. Beyond the efficient use of resources, associates give an authentic face to the brand. Glossier and Lululemon use this approach.
The third approach is centered around livestream events to create intimate shopping moments, but at scale. In this case, it is the product curation that creates the story, but critics warn that the show must not come across as staged.
American retailers flocking to livestreaming are finding that there is a critical dynamic between the brand, the product, the spokesperson and the execution. Which is largely responsible for the resulting sale? The answer varies from sale to sale, and the mix needs to be optimized by the retailer. However, what is known is that more and more retailers are using livestreaming, and they are likely to get better at it. This trend’s momentum is set to continue well beyond the bleak days of COVID-19.
Headlines of the Week
Inspired by the high-profile campaign to unionize an Amazon.com Inc. fulfillment center in Alabama, workers in Baltimore, New Orleans, Portland, Denver and Southern California have begun exploring ways to form unions at their own Amazon facilities. The Retail Wholesale and Department Store Union, which is leading the drive in Bessemer, Alabama, says it has heard from 1,000 Amazon workers around the country. These efforts are nascent and may fade, but labor experts say they could presage a multi-front campaign to improve working conditions at the world’s largest ecommerce company even if the RWDSU loses in Bessemer, where the vote to unionize ends March 29. As the RWDSU focuses on Alabama, the Teamsters are taking the battle beyond Amazon’s warehouses and into its delivery operations, where drivers earn about half as much as some of their unionized counterparts. Even the construction unions, which help build Amazon facilities and have an uneasy truce with the company, are starting to find a common cause with warehouse workers over workplace safety.
Apparel & Footwear
American Eagle Outfitters is expanding the footprint of its intimates and loungewear brand, Aerie, and the brand’s new spin-off concept. The apparel retailer and Unibail-Rodamco-Westfield have signed leases for seven Aerie stores at the mall operator’s flagship centers in the United States, along with two adjacent standalone stores for Aerie’s activewear sub-wear brand, Offline by Aerie. Introduced last summer, the brand leverages the fast-growing women’s activewear category with an assortment that includes leggings, bike shorts, tops, sports bras, fleece, bottoms and accessories. American Eagle opened its first stand-alone Offline by Aerie store in the Nashville, Tenn., area in the fall. It plans to open 25 to 30 Offline by Aerie stores this year, including stand-alone, side-by-sides and in-store shops. As previously reported, American Eagle plans to open about 50 Aerie stores this year, for a total of approximately 400 locations by year end. It expects to have 500 to 600 Aerie stores in 2023.
Big and tall men’s apparel retailer Destination XL Group has a new $17.5 million term loan facility with private lender Pathlight Capital as the agent. The capital infusion will be used to refinance existing debt and provide liquidity for working capital needs, according to a press release. The loan matures in 2026. It comes at a time of distress for the retailer, which S&P Global Market Intelligence has listed as among the most vulnerable publicly traded retailers. As of March 15, before the loan was announced, Destination XL had a 19.1% chance of default over the next year and a 24.4% chance over the next two years. Destination XL struggled along with its peers. The retailer’s sales fell by nearly a third year over year in 2020. The company posted negative cash flow from its operations over the year and a net loss of $64.5 million, more than eight times larger than 2019’s loss. At the same time, Destination XL’s online sales increased 38.6% last year.
Art Peck, the former CEO of Gap Inc., is once again making headlines. Peck launched an IPO to raise $200 million for Good Commerce Acquisition Company, a SPAC that will focus on apparel and other brands “with relevance and business models for tomorrow,” reported SeekingAlpha. Good Commerce will trade on Nasdaq. “Our objective is to create a next-generation consumer holding company by combining exceptional brands and leadership teams in the apparel & accessories, outdoor, health and wellness, home and other consumer-related industries to create long-term value for our shareholders,” Peck and other executives wrote in a filing with the Securities and Exchange Commission. As to what criteria will be used to target potential acquisitions, the executives said they intend to focus on businesses that, among other things, are the beneficiary of digital/technological disruption, are led by founders and are brands with an “x-factor,” have a high digital IQ; and have the potential to become an enduring, lifestyle brand and have a differentiated offering in a large, growing market segment.
Gap Inc. is selling a children’s wear brand it acquired about two years ago to an investment platform. The apparel retailer has entered into an agreement to sell Janie and Jack, which operates more than 115 stores in the U.S., to Go Global Retail. The transaction includes Janie and Jack’s e-commerce platform as well as all store leases and assets. Financial terms of the deal, expected to close April 2, 2021, were not disclosed. Go Global, which describes itself as a brand investment platform for investors in the consumer sector, will invest in Janie and Jack’s digital capabilities, including artificial intelligence and predictive analytics. “Our plan is to expand the company’s [Janie and Jack] digital capabilities and accelerate online growth globally,” said Jeff Streader, founder and managing partner of Go Global, which bought Mod Cloth from Walmart in fall 2019. Gap acquired Janie and Jack in March 2019 from Gymboree Corp. Go Global’s investment partners in this deal include Axar Capital Management and MidCap Financial as well as strategic investors Dallas-based FB Flurry and Shanghai-based Ven Bridge.
Boohoo has published a full list of the UK clothing manufacturers it works with after severing ties with hundreds of companies following a damning review last year of its supply chain. The group now works with 78 UK suppliers after the review by Alison Levitt QC found the fast fashion retailer had been working with up to 500 UK suppliers when subcontractors were included. The review concluded there were “endemic” problems at Leicester factories in its supply chain, including minimum wage and life-threatening fire risk. Boohoo has now banned subcontracting by its main suppliers so some of the reduction in numbers is the result of outsourced work being brought in-house. However, the 78 approved manufacturers operate across just 100 sites.
Athletic & Sporting Goods
Putter and headcover maker Swag Golf has announced it has acquired Ecktron Performance (EP Headcovers). The acquisition is a natural fit. EP Headcovers has been making Swag Golf’s headcovers since the company’s 2018 launch. With EP Headcovers now focused on Swag Golf, Swag believes they will continue being out front in making high-quality headcovers. Ecktron Performance was founded in 2013 and is based in Buford, Ga. Swag sees the synergies of working in concert with EP Headcovers as allowing them to further their frontier position in the headcover game.
Less than a week after Amazon forked over $1.32 billion to become the exclusive home of Thursday Night Football starting with the 2023 season, the Seattle-based giant and the National Football League are partnering to bring thousands of officially licensed NFL products to the largest retail store on the internet, according to Sportico. With the NFL and Amazon both staying mum on the financial arrangement between the two parties, it’s unclear if this is a pilot program or a long-term partnership. From jerseys to headwear and tailgating gear, the expanded NFL offerings on Amazon’s marketplace as of Wednesday evening now include products from authorized sellers like NFL Pro Line, New Era and Outerstuff. Absent are offerings from Nike, the NFL’s official on-field partner for authentic jerseys and sideline apparel. As part of a larger pivot of focus on e-commerce, Nike pulled its products from Amazon in 2019 and the relationship with the NFL was apparently not enough to get the sportswear giant to return to the online retailer (if that was even an option) as part of the new partnership.
L.L. Bean reported its largest net revenue increase in the past nine years — and busiest holiday season in 20 years — as consumers sought out gear for outdoor adventures during the pandemic. The Freeport, Maine-based retailer’s revenue in 2020 totaled $1.59 billion – a 5% increase over 2019 and its best showing since 2011. The year also brought several new initiatives for L.L. Bean as it entered into wholesale partnerships for the first time in its 100 years-plus history with partners that included Nordstrom, Zappos, Staples and Scheels. The brand also launched the first collaboration of its kind with menswear designer Todd Snyder and expanded its international footprint with four stores in Canada. “This past year redefined our lives in many ways, and our company’s purpose took on new importance as a record number of people turned to the outdoors for respite,” said company president and CEO Stephen Smith. In addition to the boom in outdoor activities, L.L. Bean also benefitted from the work-from-trend. The company reported 42% sales growth in slippers (one pair sold every minute for the past six months), 54% growth in sleepwear, and 97% growth in outdoor furniture.
Cosmetics & Pharmacy
Encore Consumer Capital (“Encore”), a private equity firm that invests in leading consumer products companies, announced that it has completed an investment in Ogilvie Brands, Inc. (d/b/a “Love Wellness”). Love Wellness, headquartered in New York City, is a women’s health and wellness brand specializing in supplements, multivitamins, OTC suppositories, and feminine hygiene. The Company was founded by CEO Lauren “Lo” Bosworth in 2016 after a decade long career as a reality television star. When legacy women’s health brands failed her, Lauren saw the opportunity to build a wellness brand for women driven by body positivity, clean ingredients, and expert formulations. The Company launched as a digitally-native brand, selling primarily on its own website ( www.lovewellness.com ) and Amazon. Today, Love Wellness is also available in specialty retail and mass channels, including Ulta and most recently Target.
Rite Aid is adjusting some guidance for fiscal 2021 and 2022 after a challenging fourth quarter. The drug store retailer is forecasting a net loss between $90 million and $100 million for fiscal 2022. Rite Aid expects revenues of approximately $24 billion, with same-store sales expected to increase approximately 3.5% over fiscal 2021. Rite Aid is also adjusting guidance for the fourth quarter of 2021 (ended Feb. 27, 2021), following results it said were significantly impacted by a soft cough, cold and flu season, ongoing impacts related to COVID-19, and challenging weather conditions. Front-end same-store sales declined approximately 5.6% during the quarter, driven by a decline of nearly 37% in cough-, cold- and flu-related categories. Same-store prescriptions declined approximately 1%, driven by an over 14% decline in acute prescriptions.
Discounters & Department Stores
Just a few months into serving as interim CEO of J.C. Penney, Stanley Shashoua said he sees signs of growth in the business.“ J.C. Penney is a great American family destination, and our strength is in our storied brands and the services we provide,” he said in a phone interview. “We’re seeing week-over-week improvements in the business, and we’re increasingly optimistic as we work our way through this.” Specifically, he cited growth in home goods and athletic apparel — two categories that have outperformed during the Covid pandemic as Americans look to refresh their houses and restock their wardrobes with more comfortable clothing. More recently, Shashoua said, customers have been coming to Penney for Easter dresses and other formal wear — another sign that people are ready to dress up again.
Target has yet again collaborated with a DTC company. Personal wellness brand, Care/of, on Wednesday announced the release of a new vitamin line at Target’s stores and website. The partnership is Care/of’s first “foray into the retail market.” The product line will be comprised of multivitamins for women, men and prenatal care, as well as benefit-led blends for sleep, immunity, relaxation, energy and focus, according to a company press release. The vitamin line will be available via in-store, pickup or delivery beginning March 28. The multivitamins and blends have a suggested retail price of $14.99 and $18.99 for the prenatal multivitamins, per the release.
Noting that “online shopping has more than doubled in Canada over the past year,” Hudson’s Bay on Monday said that its new marketplace on thebay.com will feature more than 500 sellers by the end of the year. Categories will include sports and recreation, tech, pets, health and wellness, and vintage designer handbags and watches, according to a company press release.
In the past four weeks alone, the traditional retailing space has not just been sipping the “Kool-Aid” that is modern online merchandising — it has been chugging it. During that brief span, we’ve seen one unprecedented digital event after another bursting from the retail sector, be it the launch of the livestreamed Nordstrom shopping channel, the spin-off of Saks.com as a standalone digital entity, the uptake of TikTok as Walmart’s favorite new selling platform, or Macy’s rejection of its department store roots in favor of the cooler “digitally-led omnichannel retailer” moniker.
Emerging Consumer Companies
Eat Just, originally founded as Hampton Creek in 2011, and maker of plant-based egg replacement products, eggless mayonnaise, and lab-grown chicken products meant to replace poultry farmed chicken meat, has raised $200 million. The funding was led by the Qatar Investment Authority, the sovereign wealth fund of the state of Qatar, with participation from Charlesbank Capital Partners and Vulcan Capital, the investment arm of the estate of Microsoft co-founder Paul G. Allen. Since its launch in 2011 as Hampton Creek, the company has raised more than $650 million all to build out capacity for its egg replacement products and its new line of lab-grown meat. The company’s products are sold in more than 20,000 retail outlets and 1,000 foodservice locations.
TryNow, which provides technology to online retailers that use Shopify Plus to let their customers receive and try out apparel, return what they don’t want and pay only for what they keep, has raised $12 million. The Series A funding comes from Shine Capital, Craft Ventures, SciFi VC (the venture firm co-founded by Max Levchin, founder and CEO of buy-now-pay-later firm Affirm), Third Kind and the co-founders of Plaid. The company offers a “Prime Wardrobe as a service” to help smaller competitors offer its shoppers the same experience, and is announcing some funding to expand its business. Based out of San Francisco, Try Now works with around 50 up-and-coming online retailers generating between $10 million and $100 million in revenues,
Nuggs, the plant-based nugget product from the company now known as Simulate, has used ghost kitchens as a new channel to reach different audiences, to test and iterate products, and to grow its customer base. Founded in 2019, the company’s investors include AgFunder, McCain Foods, Reddit co-founder Alexis Ohanian, and former Whole Foods CEO Walter Robb since its founding in 2019. As of mid-2020, the company wasn’t yet in retail stores or sold in any fast-food outlets, and the company brainstormed about how to get Nuggs into people’s hands, beyond the company’s direct-to-consumer online sales. That’s when they landed on ghost kitchens.
Grocery & Restaurants
After taking “a disciplined look” at how its retail, real estate and consumer products businesses have performed, and weighing their contribution to the group, George Weston Ltd. has decided to sell Weston Foods. Weston Foods serves retail and foodservice customers with packaged fresh bread and rolls as well as frozen and artisan bread and rolls, cakes, donuts, pies, cookies, crackers, wafers and alternatives throughout Canada and the United States. The company produces private label products and many well-known brands including Wonder, Ace Bakery, Country Harvest, D’Italiano, Casa Mendosa, Dave’s Killer Bread and Gadoua. Richard Dufresne, president and chief financial officer of George Weston, said the Weston Foods’ unit has remained profitable during the COVID pandemic, despite negative sales pressure. The business ended 2020 with sales of $2.1 billion and EBITDA of $200 million, which represents a 9.7% margin, he said.
Mondelez International, Inc. has agreed to acquire Grenade, a maker of protein-centric bars, spreads, shakes and cookies that is headquartered in the United Kingdom and has a US office in Boise, Idaho. Terms of the agreement were not disclosed. Grenade products are marketed under the Carb Killa banner. The leading products in the company’s portfolio are the bars and spreads. Grenade was founded in 2010 by Alan and Juliet Barratt. Mondelez said it plans to manage Grenade as a separate business unit to nurture its entrepreneurial spirit. The company’s current leadership team will remain in place. The acquisition is expected to close by the end of March. The acquisition of Grenade will be Mondelez’s third in 2021.
French dairy cooperative Sodiaal has entered into an agreement with General Mills, Inc., Minneapolis, to acquire a controlling interest in Yoplait SAS in exchange in for full ownership of Yoplait’s Canadian business and a reduced royalty rate for the use of the Yoplait and Liberte brands in the United States and Canada. Yoplait SAS generated $740 million in fiscal 2020, according to General Mills. The business includes assets in France, the United Kingdom and certain other markets. Under the terms of the transaction, Sodiaal would acquire 51% of Yoplait SAS and General Mills would acquire Sodiaal’s 49% ownership interest in Yoplait Canada Holding Co., making the Yoplait Canada yogurt business, which generated $290 million in net sales in fiscal 2020, a wholly owned subsidiary of General Mills. Following completion of the transaction, General Mills would wholly own yogurt operations in the United States and Canada that generated a combined $1.4 billion in net sales in fiscal 2020 and would distribute Yoplait and Liberté branded products in the United States and Canada on a royalty-free basis.
Industry veterans Jamie Coulter and Jimmy John Liautaud are behind a new company that has made a majority investment in the nine-unit Arkansas-based Seven Brew Drive-Thru Coffee concept, the companies said Tuesday. Fayetteville, Ark.-based Brew Culture, which does business as Seven Brew, also said it would be launching a franchise program after the investment by Jackson, Wyo.-based Drink House Holdings, which is led by Coulter, founder of Lone Star Steak House and Pizza Hut franchisee, and Liautaud, founder of the Jimmy John’s Sandwich chain.
Home & Road
At Home Group Inc. reported a 31% increase in fourth-quarter same-store sales as home décor sales continue to thrive during the pandemic. The value home goods retailer’s net sales increased 41.3% to $562.0 million for the quarter ended Jan. 30, which contained one additional week, from $397.7 million in the year-ago period primarily due to comparable store sales growth and the favorable impact of the 53rd week. Excluding the impact of the extra week, fourth-quarter fiscal 2021 net sales increased 33.4%. Comparable store sales increased 30.8%. Net income totaled $72.7 million compared to a $224.1 million net loss in the fourth quarter of fiscal 2020. Adjusted net income was $72.6 million compared to $23.9 million in the prior-year period. “The fourth quarter was a very strong finish to a transformational year for At Home,” said chairman and CEO Lee Bird. “We delivered comps of nearly 31% for the quarter, leading to record-setting full-year comps above 19% and free cash flow improvement of more than $400 million. We achieved these results despite unprecedented challenges during the year, including mandated store closures and inventory constraints, a clear testament to our compelling value proposition, competitive positioning and incredibly dedicated team members.”
Canal Dover Furniture’s acquisition of Keystone Designer gives the case goods manufacturer an opportunity to grow its business through a product mix that is similar in nature to its highly customizable solid wood furniture line. Both companies offer bedroom dining and occasional furniture as their core categories produced in multiple species such as cherry maple and oak. They also sell in similar upper-middle to upper-end price points. While Canal Dover co-owner and President Nick Pickrel declined to reveal the purchase price or estimate the combined sales of the newly merged companies, he said their sales are similar, leaning towards “almost exact.” The two companies began talking earlier this past winter after then Keystone owner Wyrmwood Gaming decided to cease production of residential line. Instead it decided to devote its capacity to a surge in demand for its gaming table line, a core source of revenue for the company.
Jewelry & Luxury
Luxury group Kering made an informal offer in January to merge with rival luxury conglomerate Richemont, in an effort to create a “sizable challenger” to high-end behemoth LVMH, according to French online publication Miss Tweed. But the cash-and-shares proposal—made directly by Kering CEO François-Henri Pinault to Richemont chairman Johann Rupert—was quickly shot down, the publication said, quoting informed sources. Rupert was not happy with the terms and did not even submit the proposal to the company’s board, it said.
Pamela Cloud, the former chief merchandising officer of Tiffany & Co., has joined the advisory board of lab-grown company Aether Diamonds. She will also be an investor in the company, according to a statement. Cloud worked at Tiffany & Co. for 25 years, starting as watch buyer. She eventually became its senior vice president and chief merchandising officer, before her departure was announced in 2019. Her official last date with the company was July 31, 2020.
Neiman Marcus Group has refinanced again. The owners of the luxury department store retailer sold $1.1 billion in senior secured notes to repay other borrowings, reported Women’s Wear Daily. Neiman Marcus exited bankruptcy in late September with its senior lenders — Pacific Investment Management Company LLC (Pimco), Davidson Kempner Capital Management and Sixth Street Partners — swapping debt for equity and becoming the new owners. The reorganization plan eliminated $4.4 billion of the approximate $5 billion Neiman’s had in debt at the time, and about $200 million in annual interest payments. But Neiman’s still pays significant interest (estimated at $114 million annually as of January 2021) on about $1 billion in debt it now has, according to the report.
UK-based online luxury retailer END Clothing has agreed to divest a majority stake to global investment firm Carlyle Group. Carlyle will acquire the stake from END founders and CEOs Christiaan Ashworth and John Parker, who will become minority stake holders. Venture capital firm Index Ventures, which currently holds a minority stake in END, will fully exit from the company after the acquisition. The financial details of the transaction have not been disclosed, but insiders have said Carlyle’s purchase values END at more than £750m ($1bn). The transaction is due to close on 1 April.
Office & Leisure
GameStop reported fourth-quarter sales that missed analysts’ estimates but said things were off to a “strong start” in the new year. Net income was $80.5 million, or $1.19 per diluted share in the quarter ended and included a $1.03 per share tax benefit as compared to diluted earnings per share of $0.32 in the year-ago quarter. Net sales fell to $2.122 billion from $2.194 billion last year, missing Street estimates of $2.21 billion. The videogame retailer attributed the decline to a 12% decrease in its store base and an approximate 27% reduction in store operating days in Europe due to temporary store closures in response to the COVID-19 pandemic. Comparable store sales rose 6.5%. Global E-commerce sales (included in comparable-store sales) increased 175%, and represented 34% of net sales in the fourth quarter, up from 2% last year.
ThreeSixty Group is partnering with Prénatal Retail Group — one of the largest toy retailers in Europe with 777 stores — to launch FAO Schwarz in Italy, with an eye to expansion to Spain, France, Portugal and Benelux. The agreement includes a 6,000-sq.-ft. FAO Schwarz flagship in the heart of Milan. The new store is set to open in the fourth quarter of this year. The Milan store will be inspired by the FAO Schwarz flagship at 30 Rockefeller Plaza in New York City, and will feature such signature brand elements as FAO’s famous dance-on piano and clock tower. It will also offer in-store product demonstrations. FAO Schwarz was acquired by Toys ‘R’ Us in 2009. It once operated about 40 stores nationwide, but eventually was down to only the New York flagship. In 2016, Toys “R” Us sold the brand to ThreeSixty Group, which designs, makes and distributes toys and other consumer products to retailers nationwide.
Pets provided solace during a difficult 2020 and that translated into soaring annual revenues for pet supplies, foods, treats and other products along with vet care. The pet industry generated $103.6 billion in annual sales in 2020, the highest level in industry history, according to the American Pet Products Association. The association expects the momentum to continue. “We are bullish for the coming year, projecting growth of 5.8% — well above the historical average of 3% to 4%,” said Steve King, president and CEO, APPA. From a retail perspective, every channel showed an increase, especially e-commerce. Total retail sales increased by 6.7% from 2019 to 2020, as both pet specialty and independent retailers experienced solid growth. Thirty-percent of pet owners said they spent more on their pet/pet supplies in the past year with only 10% saying they spent less.
Shares of Gamesys surged in London on Wednesday, after the online software development and gaming company announced a possible merger with U.S. based Bally’s Corp. Bally’s will offer 1,850 pence for each share of Gamesys, a 12.7% premium to its March 23 closing price. Gamesys shareholders would also have the option of receiving 0.343 new Bally’s shares in lieu of part or all of the cash consideration they would get under the deal. The companies said there is no guarantee a deal will be completed.
Terms of the deal would see the combined group based in Rhode Island, and retain a listing on the New York Stock Exchange. The chief executive of Gamesys, Lee Fenton, would become the CEO of the combined group and two Gamesys directors would join Bally’s board.
Technology & Internet
This week’s Amazon public relations push will no doubt go down as one of the odder public-facing strategies in tech. As some of the company’s biggest rivals were getting ready to virtually testify on Capitol Hill, the retail giant’s CEO of worldwide consumer business appeared to suggest that Amazon is not only as progressive as self-declared democratic socialist Bernie Sanders, but also more effective in achieving those leftist policies. Next week, the RWDSU will begin tallying votes for what has shaped up to be the largest union push since Amazon’s 1995 founding, much to the company’s chagrin. Amazon will no doubt be keeping a close eye on Tuesday’s vote count, aware that the results will have a far wider ranging impact than the 6,000 workers currently employed at Bessemer. If unionization fails, the company will tout the results as vindication that its work force is perfectly happily without labor interference. A vote to unionize, on the other hand, could well embolden further unionization efforts across the company.
Venture capital firms and private equity investors are going wild for European e-commerce start-ups hoping to take on Amazon. So far this year, three potential Amazon rivals have announced substantial funding rounds well into the hundreds of millions of dollars. Turkish start-up Getir, which has been backed by venture capital billionaire Michael Moritz, announced on Friday that it had raised $300 million for a $2.6 billion valuation. The money is coming from Silicon Valley VC heavyweight Sequoia and New York hedge fund Tiger Global. Getir’s announcement comes one day after German start-up Gorillas said it had raised $290 million at a valuation in excess of $1 billion. Finland’s Wolt announced in January that it had raised a $530 million funding round at an undisclosed valuation. Although Getir and Gorillas are initially focusing on groceries, and Wolt is focusing on takeaways, all three have plans to significantly broaden their remit and encroach on Amazon’s turf.
Amazon is diving deeper into providing health care services — and not just for its own employees. The company is expanding its on-demand telehealth service, Amazon Care, to other companies based in its home state of Washington, with a much bigger rollout to come this summer. Amazon initially piloted the service in September 2019, with availability limited to its employees (and their families) in Washington State. Beginning this summer, Amazon Care will expand its virtual care to companies and Amazon employees nationwide. Amazon Care’s in-person service will expand to Washington, D.C., Baltimore, and other cities in the coming months. Amazon Care enables employees to connect with medical professionals via chat or video conference (typically in less than 60 seconds). The service has two components: virtual care, which connects users to medical professionals via the Amazon Care app and allows them to chat live with a nurse or doctor via in-app messaging or video; and in-person care, where Amazon Care can dispatch a medical professional to a patient’s home for additional care, such as routine blood draws or listening to a patient’s lungs, and also offer home prescription delivery.
Finance & Economy
U.S. consumer spending fell by the most in 10 months in February as a cold snap gripped many parts of the country and the boost from a second round of stimulus checks to middle- and lower-income households faded, though the decline is likely temporary. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, dropped 1.0% last month after rebounding 3.4% in January, the Commerce Department said. That was the largest drop since April 2020, when the economy was reeling from the shutdown of nonessential businesses like restaurants to slow the spread of Covid-19 infections. Unseasonably harsh weather in the second half of February, including severe winter storms in Texas and other parts of the densely populated South region, depressed homebuilding, production at factories, orders and shipments of manufactured goods last month.
More than 20% of Americans say they will need four or more years to get their retirement plans back on track following the toll the coronavirus pandemic has taken on the U.S. economy. The pandemic has had wide-ranging effects, with 82% of respondents saying that it negatively impacted their retirement plans to varying degrees and one-third saying that factors like job loss and withdrawals from their retirement accounts set them back two to three years. For some, it will take even longer: 12% of respondents say it set them back more than five years. All told, 55% of Americans said their retirement goals have been delayed by at least two years. And about 80% of respondents say the past year has made them re-evaluate their financial priorities.
The number of new applications for unemployment benefits fell below 700,000 in late March for the first time since the onset of the pandemic as the U.S. economy shifted into a higher gear. Initial jobless claims filed traditionally through the states declined by 97,000 to 684,000 in the week ended March 20, the government said. Combined state and federal jobless claims totaled 898,534 last week, marking the first time they’ve dropped below 1 million since the eruption of the pandemic.
Consumers are feeling better. That’s essentially the takeaway from a number of consumer sentiment surveys we follow pretty closely here at Marketplace — given that about two-thirds of the economy is consumer spending and also that whether and how soon consumers return to pre-pandemic spending behavior will be crucial to getting the economy fully recovered from the pandemic. The University of Michigan’s consumer survey shot up in March — more than 8% — to the highest level in a year, though it’s still about 7% below pre-pandemic levels. The $1.9 trillion government rescue package, with $1,400 payments for all but high-earning Americans, plus another $1,400 for each kid, is helping to cheer folks up a good deal.