Computers are taking over the world. At least, that is the fear. News reports have been highlighting how advanced language models and other Artificial Intelligence (AI) could lead to a world where computers can so closely mimic human interactions that we will not be able to distinguish between what has been created by humans and what has been created by computers. Goldman Sachs estimated that as many as 300 million jobs could be automated in some way by AI. As a consumer-focused investment banker, I wanted to write a story on how the rise of AI could impact consumer habits. To put AI to the test (and to make my life easier), I decided to have OpenAI write this week’s Big Story for me. While the article below might be missing some of the cleverness and humor of a typical Consensus opinion piece, it probably has better grammar, sentence construction and vocabulary than I would have produced. But is AI advanced enough to automate the writing of opinion pieces for the Weekly Consensus? I will let you be the judge….
Artificial Intelligence (AI) has become an increasingly important part of modern life, and its impact on consumer spending is significant. AI has the ability to improve the customer experience, increase efficiency, and personalize the shopping experience. In this essay, we will explore the ways in which AI has impacted consumer spending, both in the short and long term.
One of the most significant impacts of AI on consumer spending is its ability to personalize the shopping experience. With the help of AI, retailers can gather data on customer preferences, behaviors, and purchase history to provide personalized recommendations and promotions. This personalization helps retailers to create a more engaging and relevant shopping experience for customers, leading to increased sales and loyalty. Additionally, AI-powered chatbots and virtual assistants can provide customers with personalized assistance, answering questions and providing recommendations based on their preferences.
Another way AI has impacted consumer spending is by making the shopping experience more efficient. With the help of AI-powered tools, retailers can optimize their supply chains, inventory management, and delivery logistics. This leads to faster, more accurate order fulfillment and improved customer satisfaction. Additionally, AI-powered predictive analytics can help retailers anticipate demand, allowing them to optimize pricing and inventory levels to maximize profits.
AI has also led to the rise of new business models, such as subscription services and on-demand delivery. Subscription services, such as meal kits and beauty boxes, rely on AI-powered algorithms to personalize the products they offer to each customer. On-demand delivery services, such as Uber Eats and DoorDash, rely on AI-powered algorithms to optimize delivery routes, ensuring that orders are delivered quickly and efficiently.
However, the impact of AI on consumer spending is not entirely positive. One potential concern is the impact of AI on employment. As AI-powered tools become more prevalent, some jobs may become automated, leading to job loss and displacement. Additionally, there is a risk that AI could lead to increased income inequality, as those who are able to afford AI-powered products and services will have a significant advantage over those who cannot.
Another potential concern is the impact of AI on privacy. As retailers gather more data on customers, there is a risk that this data could be misused or exploited. Additionally, there is a risk that AI-powered tools could be used to manipulate customers or push them towards purchasing products they may not need or want.
In conclusion, AI has had a significant impact on consumer spending, both in terms of improving the customer experience and increasing efficiency. However, there are also potential concerns about the impact of AI on employment, income inequality, and privacy. As AI continues to evolve, it will be important for retailers and policymakers to balance the benefits of AI with its potential risks and negative impacts.
Apparel & Footwear
Toys ‘R’ Us and Ben Sherman owners weigh bids to try on Hunter Boot
The companies behind Toys ‘R’ Us and Ben Sherman are among the rival suitors weighing up offers for Hunter Boot, the royal warrant-holding footwear brand. Sky News understands that WHP Global, which owns the toy retailer, and Marquee Brands, owner of the fashion brand, have both expressed an interest in Hunter ahead of a bid deadline at the end of the week. City sources said Baozun, a Chinese digital commerce group which owns Gap’s Greater China operations, was also among the interested parties. Earlier this month, Sky News revealed Authentic Brands Group, the American company behind brands such as Reebok and Ted Baker, had entered the bidding for Hunter. The auction of the business is reaching a critical stage weeks after Hunter Boot secured a multimillion pound funding lifeline, with existing shareholders injecting £5m into the business and lenders contributing a further £2m. The company was last saved in 2020 through a £16.5m capital injection, part of which came from Pall Mall Legacy, a fund backed by Goldman Sachs and Three Hills Capital Partners, an existing shareholder.
Fate of Hickey Freeman Factory in Question as Samuelsohn Owner Shifts to New Brand
One of the last remaining American manufacturing plants is in a state of flux. At the end of May, the license for Hickey Freeman tailored clothing will be moving from Samuelsohn to Peerless Clothing and with it, the production of the collection in Rochester, New York, where it had been made for more than a century. The Hickey Freeman label is owned by Authentic Brands Group, which awarded the North American license to Peerless in January. Peerless also holds the license for other Authentic suit brands including Hart Schaffner Marx, Van Heusen and Shaquille O’Neal XLG. When the switch becomes final this spring, Peerless will begin manufacturing the Hickey Freeman collection in its factory in Montreal as well as elsewhere outside the U.S. The line will be introduced in the fall. It is launching at Dillard’s and prices will drop dramatically, with suits retailing for $595 to $795, rather than $1,700 or more. As a result of the switch, the Hickey Freeman Tailored Clothing plant in Rochester, which was built in 1912, is being renamed and Samuelsohn’s chief executive officer is seeking a company to take over its long-term lease to produce clothing for other brands at the plant.
Bluestar Alliance Acquires Fashion Brand Scotch & Soda
Bluestar Alliance, a New York-based brand management company, announces its acquisition today of Amsterdam-based Dutch fashion brand Scotch & Soda. The acquisition by Bluestar Alliance will allow for the continuation of the brand and its products across key markets including the Netherlands. The brand management firm has become an industry leader, owning a portfolio of consumer brands including iconic action sports brand Hurley, Bebe and Tahari, among others. Following the closing of the transaction, Scotch & Soda will be enabled to continue its activities in selected markets. Further details will be shared after the closing, which is expected to take place in the coming weeks. Bluestar will continue the growth momentum by introducing new consumers to the Scotch & Soda brand, inspired by the free spirit of Amsterdam and power of self-expression. Terms of the deal will not be disclosed.
Oofos Completes Funding Round Led by Pro Athletes Derek Carr, Alex Smith and Dawn Staley
Oofos has completed a new round of funding, which was led by Derek Carr of the New Orleans Saints, retired NFL quarterback Alex Smith and WNBA star turned championship-winning women’s college basketball coach Dawn Staley. The trio of sports stars all had ties to the active recovery footwear brand prior to the round of funding. Smith and Staley entered into partnerships with Oofos in June 2021 and March 2022, respectively, and the brand said in September 2022 that it had entered into a partnership with Carr and that he had also become an investor. Oofos said it is positioned for continued growth with these new investments and has already experienced 82% growth for the 12 month period ending January 2023. The active recovery footwear brand also said several recent partnerships have bolstered its growth, a list that includes fitness company Exos, Dynamic Universal Pickleball Rating (DUPR), the Las Vegas Raiders, USA Gymnastics and the US Ski & Snowboard team.
Lululemon Absorbs $442.7M Mirror Charge and Keeps Charging On
Lululemon Athletica Inc. is staying limber — flexing around a $442.7 million after-tax charge against its 2020 Mirror acquisition to tout plenty of growth elsewhere, in its loyalty program and revenues. The activewear brand has been going from strength to strength for years and in the fourth quarter logged big revenue numbers across its business. The three-year compounded annual growth rate clocked in at 23 percent for women’s, 26 percent for men’s, 44 percent in accessories, 10 percent in its stores and 46 percent online. Mirror, though, has proven to be a rare stumble, although one that is helping to feed Lululemon’s growing loyalty program. Calvin McDonald, chief executive officer, acknowledged the misstep in a call with analysts on Tuesday and explained a little of the company’s rationale going into the deal, noting that Lululemon tested a paid city-based membership program with promising results. That led to the $500 million Mirror acquisition, just when the pandemic had many people locked down and looking to work out at home. “However, as you know, since our acquisition, the at-home fitness base has been challenging,” McDonald said. “While members love our content, hardware sales did not match our expectations.”
Next to buy Cath Kidston out of administration – but jobs will be cut as remaining shops close
Clothing giant Next has bought the brand, website and intellectual property of Cath Kidston after it was placed in administration, but it will close the remainder of the vintage-themed homeware company’s shops. Administrators Zelf Hussain and Rachael Wilkinson of PWC arranged the sale of the homewares and lifestyle brand, which is known for its floral designs. Hussain said the pandemic and cost-of-living crisis were both major challenges for Cath Kidston to navigate. “Cath Kidston is a well loved lifestyle brand founded in 1993 and I am pleased to say that it has been bought by Next who will make sure it continues to flower under their ownership,” he said. While Next will buy the brand, the remaining Cath Kidston stores will close after they sell any remaining stock, meaning some of its 125 staff will be made redundant. Cath Kidston has shops in London, Ashford, Cheshire Oaks and York. “In the short term its four stores will continue to remain open whilst operations are wound down.“
Athletic & Sporting Goods
Adidas Ends Partnership With Beyoncé, Shutters Ivy Park Line
Add Beyoncé to the list of collaboration woes for Adidas. According to reports from The Hollywood Reporter and TMZ, Adidas ended its partnership with Beyoncé and shuttered the Ivy Park athleisure line. The dissolution was reportedly due to creative differences between Adidas and Ivy Park, with the female pop star excited to “reclaim her brand, chart her own path and maintain creative freedom,” said The Hollywood Reporter. In 2018, Adidas partnered with Beyoncé to bring her Ivy Park line to the brand. This February, The Wall Street Journal reported that the Ivy Park line was $200 million below Adidas’ annual projections, based on comments from people familiar with the numbers and reports they were provided at the time.
Varsity Brands To Pay $43.5M In Antitrust Settlement
Varsity Brands has agreed to pay $43.5 million to settle a federal lawsuit that the student apparel company and producer of cheerleading events abused its industry dominance, causing private gyms and spectators to pay artificially inflated prices. The settlement deal, which requires court approval, would resolve one of three federal antitrust lawsuits Varsity has defended over the last three years. The plaintiffs in the case, Fusion Elite All Stars, et al. v. Varsity Brands, LLC, et al., are “direct purchasers” (gyms paying to register at Varsity events and spectators paying to see them) over the last seven years. The events involve short performances featuring pyramids, tumbling and other gymnastic components. The lawsuit was filed in 2020 by California cheerleading gym Fusion All Stars, which alleged that Varsity had violated the Sherman Antitrust Act by acquiring cheerleading events and shutting down its rivals in the All-Star cheer business to gain market dominance and then using that market dominance to produce events and sell specialized apparel “to erect a moat that protects its lucrative businesses from free and fair competition.”
Cosmetics & Pharmacy
Fragrance brand Vyrao lands minority investment from Estée Lauder
Estée Lauder Companies‘ start-up incubation arm is investing in Vyrao, a crystal-infused fragrance brand. The British brand, which fuses “energetic healing with master perfumery”, is working with New Incubation Ventures after two years of rapid growth. The funding will be used to boost the company’s marketing and advertising campaigns, as well as supporting its retailers in the US, Australia and Japan. A new fragrance is also expected to launch in May. Vyrao offers unisex fragrances that each contain a Herkimer diamond crystal, which is said to clear the body’s chakras and allow for spiritual energy to flow.
UK-based Intimate Care Brand Luna Daily Raises a $3.7M Seed Round to Fund Its US Expansion Plans
Combining body care with the outdated ‘feminine hygiene’ category, Luna Daily is a “microbiome-balancing body care for all skin, even the most intimate, and is designed for women and people with vulvas across all life stages from puberty, through motherhood, to menopause”. The UK-based company has now raised $3.7M in seed funding from Redrice, Joyance Partners, Velocity Juice and angel investors to fund its US market entry, which has just kicked off with its launch at leading beauty retailer Sephora.
Lenders Acquire Forma Brands for $690M
Lenders Jefferies Finance and Cerberus Capital Management have acquired Forma Brands for $690 million, according to Retail Dive. In January 2023, Forma Brands filed for Chapter 11 Bankruptcy and entered a definitive asset purchase agreement with its lenders, known as the Investor Group. The company received a commitment for approximately $33 million in debtor-in-possession financing from the Investor Group. In February 2023, Ariana Grande reacquired her r.e.m. beauty brand from Forma Brands for about $15 million. At that time, Forma Brands also announced it was closing all of its U.S. stores.
Matter of Fact Closes $6 Million Funding Round
Matter of Fact has closed its second round of funding, to the tune of $6 million. The brand, founded by Paul Baek in 2021, closed a round of additional funding with participation from Horizon Ventures and Cowboy Ventures, in addition to James and Nicky Hilton Rothschild, as well as Birchbox cofounder Hayley Barna. That brings Matter of Fact’s total funding to $16 million. The company raised $10 million in seed funding in 2021. Matter of Fact currently only has two products, and sells directly on its website. The brand’s primary focus has been fueling innovation, including various patent-pending technologies.
Discounters & Department Stores
Bloomingdale’s CEO to replace Macy’s chief Jeff Gennette next year
After four decades at Macy’s in a career that culminated in taking the top spot, CEO Jeff Gennette, who also serves as chairman of the board, will retire early next year, the department store said Wednesday. Bloomingdale’s CEO Tony Spring will take his place, according to a company press release. The company has commenced an internal and external search for someone to lead Bloomingdale’s, which is owned by Macy’s, a spokesperson said by email. In a further shakeup, Macy’s Chief Financial Officer Adrian Mitchell will add the role of chief operating officer to his responsibilities. In the combined role, Mitchell will lead the stores, technology and supply chain teams, in addition to his existing finance and real estate duties.
Walmart e-commerce fulfillment layoffs top 600
With the release of more federally mandated information regarding layoffs and facilities closures, it’s clear that Walmart is downsizing a fulfillment network that not long ago was growing quickly. Last week the retail giant confirmed that it has “adjusted staffing levels” at fulfillment centers “in select markets.” Specifics are slowly being made available via state WARN notices. The Worker Adjustment and Retraining Notification or WARN Act is a federal labor law that requires employers with 100-plus employees to give at least 60 days notice of facility closures or mass layoffs.
Dollar General to bring expanded beauty offering to 300 stores this year
To cater to more beauty customers, Dollar General is introducing new store layouts dubbed “Beauty Reinvention” designed to highlight its assortment of beauty, skin and hair care products, the retailer announced on Wednesday. The new layout will be integrated into 300 new stores this fiscal year, the company said. The retailer launched the first Beauty Reinvention stores in Feb. The format increases the square footage for the beauty category, grows the skin care selection by 50%, soap and shower products by 30% and expands the hair care and color selection. Dollar General is also introducing three exclusive product lines across the country this month, including skin care brand Joy Works, hair care brand Curl Rhythm and hair care brand Yes! Honey. The retailer is adding more than 1,000 additional beauty products to its Beauty Reinvention stores this year.
Target to close 4 small-format stores this spring
After “multiple years of working to improve performance,” Target confirmed it plans to close four small-format stores on May 13. The stores closing include one located in Philadelphia, one in Minneapolis and two in the Washington, D.C., metro area. Target said small-format stores remain an important part of the company’s growth. Half of the approximately 20 new stores the company plans to open this year will be smaller locations of about 50,000 square feet or less. Nearly 50 Target stores are listed on the retailer’s upcoming store openings page, ranging from an approximately 19,000-square-foot location in Alabama to stores with footprints approaching 150,000 square feet in several states, including Delaware, Florida, Iowa, Nebraska, North Carolina and South Carolina.
Emerging Consumer Companies
Bala and CorePower Yoga team up
Bala and CorePower Yoga are teaming up to make working out a bit more vibrant. The two fitness brands are releasing a limited-edition pair of Bala’s fan-favorite 2-pound bangles, $65, in CorePower Yoga’s signature orange hue. Weights are key to several of CorePower Yoga’s offerings, including the company’s most recent class addition: CorePower Yoga Strength X. Bala bangles are also implemented into CorePower Yoga in-studio workouts, including the C2 and Yoga Sculpt classes. CorePower Yoga operates 220 studios across 22 states and Washington, D.C. Bala has partnered with specialty studios and gyms around the world on its way to generating more than $50 million in revenue since its founding.
Huupe, smart basketball hoop maker, raises $11 million
Huupe, a technology company based in Los Angeles that has developed a smart basketball hoop, based in Los Angeles, secured $11 million in funding. Protagonist VC, Marvan Ventures, TRI Investments, and Kawn VC co-led the $11 million seed round. Huupe’s smart hoop features a rugged screen in place of a traditional backboard that can stream games and TV shows. In addition to using the display to stream content, it can be used for training and challenges. The smart hoop comes equipped with sensors and artificial intelligence that can track a user’s shooting stats and read how they play basketball to provide feedback on ways to improve. Huupe’s technology can also stream live training content from its network of basketball trainers to provide users with tailored programs.
The Verticale shifts to sustainability and social commerce
E-commerce site The Verticale is making a shift to social commerce to help shoppers discover socially conscious brands curated on its platform. The Verticale, founded in 2021, is moving away from the marketplace model — previously, it sold products on its website on a dropship basis. Instead, The Verticale says it will now help its users discover products sold by its eco-friendly brand partners. The Verticale will tell customers more about these products through a designated brand page, through videos from the founders, and through product recommendations curated by influencers — with the hope that all of these various pieces of content will ultimately convince a customer to buy a product. Then, if they click on a product link, they’ll ultimately be taken to the brands’ website to checkout and convert into a sale.
Giada De Laurentiis’ lifestyle brand, Giadzy, raises $5 million
Celebrity chef Giada De Laurentiis is set to expand her Italian-inspired business Giadzy with $5 million in fresh capital from Neil Sequeira, founding partner at venture capital firm defy.vc. De Laurentiis created Giadzy in 2016 as a way to tell her own story, as well as provide products and experiences to her fans. While originally designed to provide a platform for her recipes and content from her shows, Giadzy has expanded into a digital marketplace and community featuring cooking gear and food products, plus sections on travel, tabletop, linens and more. With the recent investment from Sequeira, the brand plans to move into private label products, subscription models and expand beyond ingredients into soft and hard goods, and travel. Sequeira believes Giadzy has the potential to grow into a billion-dollar business.
Andie Swim opens its first flagship store in Malibu
Andie Swim, a direct-to-consumer swimwear and intimate wear brand, has opened its first flagship store at Malibu Country Mart, California. Previously, the brand had mainly sold its products through its e-commerce site with a few pop-up stores in the past. However, the brand decided to open a permanent store after identifying Malibu’s market and sales potential, as the region’s demand for swimwear is consistent throughout the year. The 915-square-foot store’s interior design resembles a beach, with yellow-and-white striped curtains and a beach mural on the wall. Inclusive sizing, recycled nylon fabric, and affordable pricing ranging from $100 to $150, are some of the features that attract customers to the brand. Andie Swim’s recent series B funding has enabled it to grow and generate $50 million in annual revenues, with the company planning to expand to other markets in the future.
Cat food brand Smalls raises $19 million to expand its feline-focused mission
Smalls, a direct-to-consumer cat food start-up, has raised $19 million in new funding from investors including pet food giants Mars and General Mills, as well as Left Lane Capital, Valor Capital, and the Ohio State University endowment fund. The new round of funding brings Smalls’ total funding raised to $34 million, which will help the company expand its human-grade cat food business in a category that is “radically under-invested in”, according to CEO Matt Michaelson. Smalls’ sales were in the eight figures in 2022, and sales typically have doubled, year-over-year, since it was launched in 2017. The company’s meals are currently only available on its website, but Michaelson said the company is exploring expanding into retail store.
Food & Beverage
Pepsi redesigns logo for first time in nearly 15 years
PepsiCo, Inc. is updating the Pepsi brand’s visual identity and launching a redesigned logo, the first change to its logo in 14 years. Featuring a bolder typeface and a modernized take on earlier iterations of the Pepsi globe, the logo will be used across all the company’s physical and digital outlets, including packaging, merchandise and fountain equipment. The revamped look also utilizes black font intended to convey the brand’s focus on its zero sugar products. “At PepsiCo, we design our brands to tell a compelling and holistic story,” said Mauro Porcini, chief design officer and senior vice president for PepsiCo. “We designed the new brand identity to connect future generations with our brand’s heritage, marrying distinction from our history with contemporary elements to signal our bold vision for what’s to come.” To improve its flexibility for use across physical and digital marketing spaces, Pepsi’s logo also includes a pulse graphic that creates a visual sense of movement and animation. The redesign is set to roll out in North America this fall as part of the brand’s 125th anniversary, and a global launch is expected in 2024.
Natural Balance and Canidae pet food companies to merge
Natural Balance, a premium specialty pet food brand, and Canidae, a premium, sustainable pet food company, announced they have entered into a definitive merger agreement under which the companies will combine. The combination unites two specialty pet food brands with complementary yet differentiated offerings to drive innovation and growth for the benefit of pet parents everywhere. Terms of the transaction were not disclosed. For more than 30 years, Natural Balance has offered premium products with high-quality, protein-forward ingredients spanning dog food, cat food and treats. Similarly, since its founding 25 years ago, Canidae has a rich history in the pet food space, offering both dog and cat food products with a focus on goodness for pets and the planet through regenerative agriculture and sustainable operations. The combination will leverage both companies’ shared passion for improving the well-being and lives of pets through simple nutrition, responsibly sourced ingredients and protein-rich products. The combined company’s flagship offerings will include Canidae’s Pure, Goodness and All Life Stages, as well as Natural Balance’s Limited Ingredient (LI) and Original Ultra product lines.
Report: Good Eggs Secures Capital At Significant Markdown
Good Eggs has raised a new round of capital to help keep the struggling online grocer operating. According to a story on The Information, Good Eggs raised $7 million from existing investors with a pre-investment valuation of $15 million, a 94% drop from late 2020 when the company raised $60 million at a pre-investment valuation of $270 million (part of a larger $100 million round announced in 2021). A down round, such as this, would greatly reduce the value of the shares owned by previous investors such as Benchmark Capital, which did not contribute more capital to the current fundraise. In total, the 12-year-old company has raised over $180 million from investors including Glade Brook Capital Partners, GV (the investment arm of Google), Tao Capital Partners, Finistere Ventures, Benchmark Partners, S2G and Obvious Ventures. After coming back from near-bankruptcy in 2015, the Bay-Area based company was able to grow revenue to more than $100 million in 2021, up from $59 million in 2019, that fell to $86 million in 2022.
Grocery & Restaurants
Firebirds Wood Fired Grill acquired by investment firm
North Carolina-based Firebirds Wood Fired Grill has been acquired by Garnett Station Partners LLC, a New York-based investment firm. Terms of the deal were not disclosed. Firebirds, founded in 2000, has 56 locations across 20 states and is known for its wood-burning grill and firebar. Its signature items include hand-cut steaks, seafood and chicken and ribs. According to a news release, Garnett Station’s acquisition will enable Firebirds to accelerate growth and development.
Main Squeeze Juice Company acquires I Love Juice Bar
New Orleans-based, 28-unit smoothie and juice company Main Squeeze announced Tuesday the acquisition of 23-unit, Tennessee-based I Love Juice Bar, with locations primarily in its home state and in Texas. Together, the merged companies have very little crossover in terms of territory, and I Love Juice adds entirely new markets to Main Squeeze’s portfolio, including Tennessee and Georgia. Meanwhile, the slightly larger company Main Squeeze, will be able to bring new benefits to I Love Juice’s franchisees, including their operations systems, marketing platforms, supply chain, training capabilities and robust growth.
Home & Road
Bed Bath & Beyond again warns of bankruptcy if new stock offering doesn’t pay off
Bed Bath & Beyond is warning of a bankruptcy filing — again — if a proposed $300 million stock offering doesn’t pay off. The beleaguered retailer said if it doesn’t receive proceeds from the stock offering, announced Thursday, it will likely need to file for bankruptcy protection. In addition, the company disclosed that the loans it secured last year were downsized. According to a filing with the Securities and Exchange Commission, the company said its $565 million revolving loan was decreased from $565 million to $300 million. As part of the amendment to its loans, Bed Bath will now be on the hook for monthly interest payments. The latest updates come after Bed Bath finalized what was then-believed to be a Hail Mary stock offering in February that had been expected to infuse more than $1 billion in equity into the company. From that offering Bed Bath brought in $225 million, which it used to pay some of its debts. Yet Bed Bath’s stock price has been on a precipitous decline in recent months, weighing on its fundraising efforts. On Thursday its stock was down roughly 17% to below 70 cents a share.
Can Mattress Firm parent avoid liquidation with new restructuring plan?
In light of the roadblock shareholders put up last week, Mattress Firm’s parent company Steinhoff International has initiated a restructuring plan to extend its debt of 10 billion euros. The company, which is incorporated in The Netherlands, said it is using a Dutch law that allows for a WHOA Restructuring Plan. Under the country’s regulations, the WHOA’s purpose is to improve the ability to reorganize a company outside of formal insolvency. Under the plan, if the debt is not discharged by the extended deadline, the company could be liquidated. Steinhoff has been trying to restructure its debt since late last year.
Latest furniture start-up brings on industry experts to focus on U.S. market
Royal Morris Living, a motion and stationary upholstery company based in China with new offices in High Point has brought on three industry leaders to tap into the U.S. furniture market: Steve Lush, Peter Halunen and Jeff Fink. Lush, president of Royal Morris Living, was most recently president of sales for DiGio Leather Sofas. Prior to that he was president of Kuka Home North America. During his career he has held executive positions with several companies, including Robb & Stucky International and Hendricks Furniture Group. Halunen, a 35-year industry veteran, was named vice president of merchandising and product development. Previously he was director of sales for the North American market at DiGio Leather Sofas. Halunen’s experience includes at Natuzzi Italia heading the strategic accounts division, at Kuka Home as president, and at Violino as vice president of product development. Fink has been named showroom director. Before joining Royal Morris, Fink held similar positions with Natuzzi Italia and Kuka Home North America for the past 19 years.
Lovesac grows net sales 21.7% in fourth quarter
Lovesac, a manufacturer and retailer of upholstered seating, notched net sales growth of 21.7% in the fourth quarter ended Jan. 29 vs. 2022 at $238.8 million and 30.8% for the year at $651.5 million vs. 2022. Net sales growth was across all sales channels, including Lovesac showrooms, Internet sales and shop-in-shops at Best Buy and pop-up shops at Costco. Net income was down from last year’s high, at $27.6 million in the fourth quarter compared with $32.6 million in the fourth quarter of 2022 and net income in 2023 of $28.2 million vs. $45.9 million in 2022. This year the company invested in showroom expansion and greater advertising and marketing to drive sales as well as customer experience for its StealthTech embedded sound system.
Bed Bath & Beyond offers bracing preview of Q4 sales results
Nobody was expecting Bed Bath & Beyond’s fourth quarter sales to be robust, and they weren’t. In a filing with the U.S. Securities and Exchange Commission today, the retailer included a thumbnail of its preliminary results for the fourth quarter ended Feb. 25. Net sales fell 41% to $1.2 billion. Comps declined an estimated 40% to 50% on top of the previous year’s 15% comp decline in the 4th quarter. The filing also reported ongoing losses and “modest” free cash flow usage in Q4. Bed Bath & Beyond expects to report its audited results for the quarter and full year in late April, according to the filing.
Jewelry & Luxury
Blue Nile to lay off 119 workers, close Seattle fulfillment center
About seven months after being acquired by Signet Jewelers, direct-to-consumer diamond brand Blue Nile announced it will lay off 119 employees in Seattle, according to a Worker Adjustment and Retraining Notification notice filed with Washington state. The layoffs will start July 14 and represent a permanent closure, per the notice. “As part of the integration of Blue Nile, we will be reducing duplicative fulfillment center services to centralize these services within our existing New York City fulfillment center over the coming months,” a Signet Jewelers spokesperson said in a statement to Retail Dive. “This change unfortunately impacts the roles of some of our Blue Nile team members.”
Pandora Appoints Chief of Retail Operations
Pandora announced that Massimo Basei will become the company’s new chief of retail operations, effective April 1. Basei is currently Pandora’s general manager for southern Europe, the Middle East, and Africa. Martino Pessina, who has served as chief commercial officer for the past three years, is stepping down from that position. In his new role, Basei will be responsible for Pandora’s global retail network—which comprises 6,500 points of sale across 100 markets. His job will include overseeing network expansion, franchise relations, the omnichannel experience, store development, and global merchandising.
Dior maps out blueprint for luxury brands in India
The allure of India, and the Indian consumer, has never been greater. India’s number of ultra-high-net-worth (of $30 million or more) rose by 11 per cent between 2020 and 2021, according to real estate consultancy Knight Frank, and this growth is set to continue. Tonight’s Dior show, which will take place against the iconic backdrop of Mumbai’s Gateway of India monument, marks a historic moment of celebration of the country’s crafts, creativity and people.
Luxury Brands Take eBay Style Pricing Model for Test Drive
“Not for you — for everyone,” that’s Telfar’s tagline. It’s a sentiment the luxury label is looking to further through its latest live pricing strategy, which allows customers to set their own prices. While the model feels revolutionary to the luxury industry, is it really? Or is it a model we all know well from eBay? Telfar’s new pricing model looks to challenge traditional pricing in the luxury fashion industry through a simple concept. Instead of fixed prices, Telfar’s website features a dynamic pricing tool that will ensure that the most popular items are priced lower. This new approach is designed to counter the fashion industry’s usual tactic of charging more for popular items, making Telfar’s products affordable and accessible. Telfar founder Telfar Clemens said many brands use price as a barrier to entry, and he never wanted that for his brand. The live pricing model is designed to make Telfar’s products more inclusive and accessible to everyone, regardless of their financial means.
Office & Leisure
Build-A-Bear bets big on ‘kidulting.’ Ted Lasso and Pokémon bears?
Build-A-Bear Workshop is tapping into teens and adults in an attempt to boost sales, CEO Sharon Price said in an interview on Yahoo Finance Live. As consumers cut back on discretionary spending elsewhere, Price said, the importance of “celebrations and memory making” is still high as consumers “want to be a little more lighthearted and have some fun together.” The end game: Build-A-Bear fans purchasing more gifts and collectibles. “We call (that) ‘kidulting.’ It’s a big trend,” she said. In other words: adult consumers’ desire to reconnect with their inner child. Such offerings are intended for an audience 18 years of age and older. For instance: the After Dark lineup now makes up a growing portion of the chain’s business. “We expanded our addressable market…40% of our sales are teens and adults with collectibles and gifting,” Price said. In Build-A-Bear Workshop’s latest quarter, net sales were $138.2 million, up 10% from the same quarter a year ago. Merchandise in the The Bear Cave collection includes themed teddy bears for St. Patrick’s Day, Valentine’s Day, 21st birthdays, happy hour, and spring break, among others. It also includes Collabs, which is a huge draw-in for older customers with 75 different licenses to create bears tied to pop-culture, including Pokémon, Harry Potter, Star Wars, Super Mario, Peeps, Disney and most recently, Ted Lasso.
AMC Entertainment shares jump on report Amazon exploring a deal
Shares of AMC Entertainment Holdings Inc jumped as much as 21% on Tuesday, following a report that ecommerce giant Amazon.com Inc was looking to buy the theater chain. Amazon founder Jeff Bezos has dispatched his investment advisers and top entertainment chiefs to explore acquisition plans for AMC, entertainment industry news website The Intersect reported, citing sources familiar with the discussions. Amazon last year closed its $8.5 billion deal for MGM, adding the company behind “Rocky” and James Bond in a bid to beef up its Prime Video streaming service amid intensifying competition. Movie theaters are struggling to draw in crowds since the lifting of pandemic restrictions, as rising costs force people to cut spending on out-of-home entertainment and more on groceries and rent. “We do not think that AMC is a likely acquisition target in general given its massive debt and inflated valuation,” said Wedbush Securities. The brokerage said the online retailer would be better off buying United Kingdom’s Cineworld Group Plc, which filed for U.S. bankruptcy protection in September.
CVC Capital Partners plans bid for parts of embattled Cineworld
Private equity firm CVC Capital Partners has proposed a takeover of parts of British cinema operator Cineworld Group Plc, within days of a similar offer from activist investor Elliott Management, Sky News reported on Monday. CVC is in talks with Cineworld about an offer for its eastern Europe and Israel operations, the report added. The news comes days after activist investor Elliot Management also tabled a bid to buy Cineworld’s operations in eastern Europe and Israel, Sky News had reported on Saturday. Cineworld, which has so far failed to find a buyer for the whole of the world’s second biggest cinema chain, had proposed an April 10 deadline for final bids, with an auction, if necessary, to follow on April 17. The company said in February it may emerge from Chapter 11 bankruptcy protection in the first half of this year.
Technology & Internet
Amazon consultant admits to bribery scheme to aid merchants
A prominent Amazon consultant pleaded guilty Thursday to bribing company employees in a scheme to give online sellers a competitive advantage that prosecutors say was worth $100 million. Ephraim “Ed” Rosenberg was the final holdout among five U.S.-based defendants accused of paying off Amazon employees in exchange for confidential company data that, among other things, helped them steer business to some merchants and shut out their competitors. Four other people have already pleaded guilty, and two of those were sentenced to prison. One former Amazon employee who lives in India and allegedly accepted bribes was indicted but never arraigned. The scheme, which began as early as 2017, seemed plucked from a Hollywood script, with payments crisscrossing the globe via MoneyGram, PayPal and suitcases stuffed with cash sent via Uber. Rosenberg, 47, apologized for his actions Monday in a LinkedIn post, reversing earlier statements insisting he was innocent. The highest profile of the defendants, he hosted networking events for Amazon sellers in his hometown of New York City and also runs a Facebook page with 10,000 followers that features tips about selling on Amazon.
Dumb phones are on the rise in the U.S. as Gen Z limits screen time
Dumb phones may be falling out of fashion on a global scale, but it’s a different story in the U.S. Companies like HMD Global, the maker of Nokia phones, continue to sell millions of mobile devices similar to those used in the early 2000s. This includes what’s known as “feature phones” — traditional flip or slide phones that have additional features like GPS or a hotspot. “I think you can see it with certain Gen Z populations — they’re tired of the screens,” said Jose Briones, dumb phone influencer and moderator of the subreddit, “r/dumbphones.” “They don’t know what is going on with mental health and they’re trying to make cutbacks.” In the U.S., feature flip phone sales were up in 2022 for HMD Global, with tens of thousands sold each month. At the same time, HMD’s global feature phone sales were down, according to the company.
Finance & Economy
NRF Forecasts 2023 Retail Sales to Grow Between 4% and 6%
The National Retail Federation today issued its annual forecast, anticipating that retail sales will grow between 4% and 6% in 2023. In total, NRF projects that retail sales will reach between $5.13 trillion and $5.23 trillion this year. The 2023 figure compares with 7% annual growth to $4.9 trillion in 2022. The 2023 forecast is above the pre-pandemic, average annual retail sales growth rate of 3.6%. Non-store and online sales, which are included in the total figure, are expected to grow between 10% and 12% year over year to a range of $1.41 trillion to $1.43 trillion.
US labor market remains tight; corporate profits decline
The number of Americans filing new claims for unemployment benefits rose moderately last week, showing no signs yet that tightening credit conditions were having a material impact on the tight labor market. But the risks to the economy are mounting. Other data showed corporate profits in the fourth quarter declining by the most in five years, in part because of penalties and fines imposed on several businesses. That included a $1.7 billion civil penalty against Wells Fargo for what the government said was to “settle allegations that it illegally assessed fees and interest charges on auto and car loans.”
