SPAC IPOs and de-SPAC transactions reached record-breaking numbers in 2021, building off already-high levels of activity in 2020. According to SPACInsider, the number of SPAC IPOs increased from 248 in 2020 to 613 in 2021 and total SPAC IPO proceeds also increased from approximately $83 billion in 2020 to more than $160 billion in 2021. Within retail and consumer specifically, several companies — including Utz Foods, Benson Hill, Grove Collaborative, Hims & Hers, and Bark — formed deals with SPACs. SPACs (Special Purpose Acquisition Company) are companies that raise funds through an initial public offering (IPO) and use those proceeds to acquire a private company. Such an acquisition is commonly referred to as a de-SPAC transaction. Typically, there are time limits to a de-SPAC transaction: most SPAC deals must be consummated within 18 and 24 months from the date of pricing the IPO. If the SPAC is unable to consummate a merger within the time limit, the SPAC is usually required to liquidate and return the funds raised in the IPO to investors or seek approval from stockholders for an extension.
After a two-year boom in SPAC activity, the SPAC market cooled off in Q4 2021 and has continued to fall off in early 2022. Downward pressure on U.S. equity markets (the S&P 500 was down nearly 5% in Q1 2022) and sharper regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC) have dampened the SPAC market. According to SPACInsider, there were fewer SPAC deals In Q1 2022 compared to same period one year earlier and the average size of those deals was smaller than the year prior. Furthermore, only 24 SPAC mergers worth $28.3 billion have been announced so far in 2022, compared to the 93 deals worth $233 billion in Q1 2021, according to SPAC Research. Only 48 new SPACs were floated on U.S. exchanges up to the end of February 2022, compared with 214 during the same period in 2021, according to data from Dealogic.
In addition to fluctuations in equity markets, inflation, the war in Ukraine, and new outbreaks of COVID-19, the SEC’s March 30th regulatory oversight announcement could impact SPAC activity. While acquisition opportunities become more competitive and the time pressure to consummate de-SPAC mergers builds, the SEC is proposing enhanced accountability and transparency. Jessica Wachter, the SEC’s head of economic risk analysis, noted that, “Issuing securities in an initial capital raise is fraught with problems of asymmetric information and moral hazard…Insiders know more than unaffiliated investors – they control the information flow and they also control outcomes, under these circumstances, it is possible for unaffiliated investors to be harmed.” The SEC’s proposal would require SPACs to provide disclosure documents to shareholders at least 20 days before a vote on whether to approve the purchase of a target company. The proposal also seeks to tighten standards on marketing to ensure SPAC sponsors do not use “overly optimistic language or over-promise future results to sell investors on the deal. Finally, the proposal aims to hold auditors, lawyers, underwriters and other third-party “gatekeepers” to a higher standard when policing for fraud or inaccuracy in disclosures to investors. The SEC has 60 days to comment on this enforcement proposal. The public comment period will remain open for 60 days following publication of the proposal on the SEC’s website or 30 days following publication of the proposal in the Federal Register, whichever period is longer.
Despite the downturn in SPAC activity and proposed regulatory oversight by the SEC, there are also opportunities for SPACs to regain momentum in 2022. Kristi Marvin, founder of SPACInsider, noted that the SPAC market does tend to change quickly, so it could turn around fast. Chris Conforti, head of Altimeter Capital Markets Platform. said “It’s clear not all SPACs are created equal…there are a handful of high-quality regular sponsor partners who can help strong companies go public this way.” Doug Jacob, co-founder of &vest, a consumer brand investment and incubation platform expects that “quality SPAC sponsors,” will continue to get deals done and file SPACs in 2022. In addition, positive macroeconomic factors may aid increased SPAC activity in 2022: the S&P 500 increased more than 3% in March 2022, there is hope that the Federal Reserve can begin to tame the current pace of inflation, peace discussions between Ukraine and Russia are ongoing, and COVID cases continue to decline. Today, more than 600 SPACs are in the market, actively searching for private companies to take public. Don’t be surprised if many quality SPAC deals get done in 2022.
Apparel & Footwear
A company that started out as a maker of popular women’s yoga pants and leggings has now blossomed into a widely recognized premium athletic apparel brand. But Lululemon still has bigger ambitions. On March 8, it debuted its first women’s running shoe, the Blissfeel. Priced at $148, it went on sale on March 22 in North America, China, and the U.K. Three more designs — the Chargefeel, Restfeel, and Strongfeel — are planned for the current year, and the retailer will add men’s footwear in 2023. Can Lululemon find the same type of success it achieved in athletic apparel in a whole new product category?
Express on Friday named Jason Judd chief financial officer, effective April 4, according to a company press release. Judd will report directly to CEO Tim Baxter. Judd was previously at Big Lots as its senior vice president of corporate finance and treasurer where he worked with financial planning and analysis, treasury, risk management and investor relations. Matthew Moellering, who was interim CFO, will no longer serve in that role and will continue acting as the company’s chief operating officer. Judd will also take on the role of principal accounting officer, which was previously held by Moellering, according to SEC documents. Express is filling out its C-suite as it pursues its Expressway Forward growth strategy, which aims to generate over $100 million in operating profit by 2024. Earlier in March, Express reported that Q4 net sales rose 38% year over year. Comps (stores plus e-commerce) rose 43% from 2020 and 4% from 2019.
Next month, Lizzo will launch her own shapewear line called Yitty through a partnership with the athletic apparel maker Fabletics. Lizzo tells CNBC she wanted to disrupt the category following her experiences as a young girl wearing body girdles and other skin-tight suits to contort her shape. The shapewear will debut in neon colors and bold prints. Sizes will range from XS to 6X, and prices from $14.95 to $69.95. The launch follows three years of work and many meetings with Fabletics co-founder, Don Ressler, Lizzo said. She decided to team up with Fabletics to capitalize on what she saw as limitless potential with the brand. Other potential partners saw Yitty as just a small capsule collection or a limited-time offering. Fabletics also knows a thing or two about working with superstars. The retailer launched with actress Kate Hudson in 2013 and has since collaborated with other celebrities including singer Demi Lovato and comedian Kevin Hart.
Athletic & Sporting Goods
Online reseller StockX LLC said in a court filing that images of Nike sneakers it sells as non-fungible tokens do not violate Nike Inc trademarks, arguing that Nike had shown a “fundamental misunderstanding” of NFTs by suing StockX last month. StockX in the Manhattan federal court filing called Nike’s lawsuit a “baseless and misleading” attempt to interfere with the popular secondary market for its sneakers. It said it was only using NFTs to authenticate its physical shoes and was not selling them as standalone products. Nike sued StockX in February for selling NFTs of images of Nike sneakers without the shoe giant’s permission, arguing they infringed its trademarks by causing consumer confusion. The lawsuit also said StockX’s NFTs interfered with Nike’s own NFT plans.
HighPost Capital, a private investment firm, announced the acquisitions of Centr, a personalized digital health and fitness platform curated by actor Chris Hemsworth, and Inspire Fitness, a maker of fitness equipment. Founded in 2019 by Hemsworth, Centr provides fitness, nutrition and mindfulness programming with over 200,000 global subscribers. Centr’s core offerings, delivered to users through its subscription app, are supported by new weekly content. Since 2003, Inspire has designed, manufactured and distributed fitness equipment globally, focusing on strength training. Its equipment includes functional trainers, strength systems, multi-gyms, cardio machines, free weights, benches, performance apparel, and accessories.
While many retailers are struggling to preserve relationships with overseas vendors and manufacturers, against pandemic uncertainty and shaky foreign relations, one is doubling down on its presence in North America. New Balance, a privately held business known for its cushioned sneakers and retro-inspired workout gear, has opened a manufacturing facility in Methuen, Massachusetts, the company announced. The move strengthens its reliance on North America for production, as businesses try to navigate an obstructed global supply chain, said President and Chief Executive Joe Preston. The Boston-based shoe company is building on its current production capabilities in the U.S. Including the Methuen space, New Balance owns five manufacturing facilities across Maine and Massachusetts that employee about 1,000 workers.
Cosmetics & Pharmacy
Lee Equity-backed Cosmetic Solutions introduces organic and anhydrous capabilities with the acquisition of Private Label Select. New Mexico-based Private Label Select (PLS) is an organic cosmetics and personal care manufacturer specializing in product development for skincare, lip balms, salves, sunscreens and SPF products, lip tints and glosses, and products for mother & baby. Their expertise in organic and natural formulations dates to 1994, and in 2005 the company became one of the first personal care manufacturers in the United States to be Certified Organic to the National Organic Program (NOP) standard. PLS offers customers the ability to feature organic and OTC products, including sunscreen and diaper rash cream. Based in Boca Raton, Florida, Cosmetic Solutions is a founder- and family-led business backed by more than three decades of experience. The company is a globally recognized manufacturer of turnkey private-label skincare and a leader in the custom formulation of scientifically proven, naturally effective personal care products with a focus on skincare, body care, specialty haircare, OTC, and professional use formulations.
Walgreens Boots Alliance shared its second-quarter earnings, which ended Feb. 28 and showed strong execution with continued progress on strategic priorities, the company said. The Deerfield, Ill.-based company reported that its second-quarter earnings per share from continuing operations was $1.02, a decrease compared with an EPS of $1.06 in the year-ago quarter. Second-quarter sales from continuing operations increased 3% percent over the year-ago quarter to $33.8 billion, up 3.8% on a constant currency basis, and income from continuing operations increased to $1.2 billion, compared with operating income of $832 million in the year-ago quarter. Adjusted operating income from continuing operations increased to $1.7 billion, up 35.9% on a constant currency basis. The performance reflects sales growth at Walgreens and in the international segments, and sales contributions from the Walgreens Health segment due to the recent acquisition and consolidation of VillageMD and Shields, partly offset by a decline in sales at AllianceRx Walgreens, the company said.
Discounters & Department Stores
In its latest earnings release, discounter Five Below laid out long-term goals to grow its sales and footprint. The retailer set a goal of tripling its store count to more than 3,500 locations by 2030, up from 1,190 stores at the end of 2021. Roughly 1,000 of those stores Five Below plans to open by the end of fiscal 2025. Also by that time, Five Below is aiming to double its sales and earnings per share.
Kohl’s on Thursday sent a letter to shareholders in which it pushed back against activist investor Macellum’s campaign to add new directors to the retailer’s board. In the letter, which comes ahead of Kohl’s annual meeting with shareholders in May, the retailer called Macellum’s nominees an “unqualified slate.” “Macellum is promoting an ever-changing narrative, misinformed claims, and value-destructive proposals, all of which reveal a reckless and short-term approach that is not in the interest of driving long-term, sustainable value,” Kohl’s said. In a statement, Macellum said that it is disappointed, although not surprised, by Kohl’s “inaccurate and misleading” letter.
Walmart is pulling cigarettes from select stores, including some in California, Florida, Arkansas and New Mexico, according to a Wall Street Journal report and confirmed by the company. The move comes after “years of debate” among Walmart leaders, according to the Journal’s report, which noted that CEO Doug McMillon “challenged other executives to find a way to stop selling tobacco, without demanding that the company do so.” In an emailed statement, a Walmart spokesperson said that “a result of our ongoing focus on the tobacco category, we have made the business decision to discontinue the sale of tobacco in select stores.”
Target has been courting direct-to-consumer wellness brands over the past year. Last March, the retailer collaborated with Care/of, a personal wellness brand, to introduce its vitamin line online and in stores. That same month, Sugarbreak, a non-prescription blood sugar management system, distributed its children’s products across Target’s more than 1,800 stores. Sugarbreak also created multiple Roblox games in which players avoid candy monsters and instead receive in-game perks for selecting healthy foods, according to the press release. “The formulations and demographics we chose for these four gummy vitamin packs are perfect for Target shoppers,” Persona CEO Shawn Bushouse said in a statement. “Based on the same scientific knowledge that makes Persona personalized vitamins so successful, these gummies make it even easier for consumers to enter the vitamin/supplement marketplace.”
Emerging Consumer Companies
Athletic footwear start-up company Hylo announced a Series A round of $3.2 million USD. Led by Eka Ventures, with participation from Redrice Ventures and angel investors including England footballer Patrick Bamford, Hylo will use the funds for product and brand development, as well as sales and marketing expansion.
Stylitics, a New York-based innovator in visual merchandising and outfitting solutions for top brands and retailers, announced a Series C round of approximately $80 million. The round was led by PSG Equity and brings Stylitics’ total funding raised to about $100 million. The raised funds will be used by Stylitics to triple its investment in product and technology, as well as to seek to increase strategic support and advisory for customers with enhanced program management solutions for product, marketing, and merchandising teams.
Baboon, a New York-based backpack and bag brand, raised $3.5 million. The Series A round was led by Woodland Management. Founded in 2018, Baboon, with its colorful designs and stylish prints, aims to be a next-generation adventure brand.
Food & Beverage
Indoor agriculture company Gotham Greens announced earlier this week its plans to double the size of its total U.S. greenhouse capacity from 600,000 square feet to over 1.2 million square feet by the end of this year. The Brooklyn-based company was a pioneer in urban agriculture when it launched in 2011. In 2020, Gotham Greens raised $87 million in equity and debt capital and widened its portfolio with a range of dressings, marinades, and dips sold at Whole Foods Market and Sprouts. As of this year, Gotham Greens sells its salad greens, herbs, salad dressings, dips and cooking sauces in approximately 3,000 stores across 45 states, and its regional partnerships with key accounts such as Whole Foods Market and The Kroger Co. continue to grow. The company is now developing new state-of-the-art greenhouse facilities in Seagoville, Texas, Monroe, Georgia, and Windsor, Colorado in addition to expanding its existing greenhouses in Chicago and Providence, Rhode Island to service more accounts. Expansion is key for the brand in order to maintain its more sustainable supply chain while still reaching new consumers.
Fermented mushroom ingredients supplier MycoTechnology raised $85 million in a Series E investment. The round was led by a group affiliated with the Oman Investment Authority, a first-time investor in the company. Other participants include Griffith Foods’ venture capital group Nourish Ventures, S2G Ventures, Tyson Ventures, Continental Grain, Bunge Ventures and Maple Leaf Foods. MycoTechnology plans to use this funding to build on its proprietary fermentation platform. The Colorado-based firm also will expand to Europe, Asia and the Middle East. With this investment, MycoTechnology has raised more than $200 million. MycoTechnology has been in the fermented mycelium ingredients business since 2013. It has created solutions that block bitter flavors, reduce salt and enhance protein in food.
Diageo acquired 21Seeds, a rapidly growing flavored tequila infused with the juice from real fruits, for an undisclosed amount. The super-premium alcohol brand is available in three varieties: Valencia Orange, Grapefruit Hibiscus and Cucumber Jalapeño. 21Seeds was founded in 2019 by three female entrepreneurs. They will continue to actively work with the brand and collaborate with Diageo North America. The purchase deepens Diageo’s exposure to tequila and the small but rapidly growing flavored segment.
Grocery & Restaurants
As food and labor costs rise, restaurants are making strategic changes to menus to avoid reprinting new ones every week. But price hikes can only help so much, especially since weekly changes in the cost of ingredients would mean frequent reprinting. That’s where menu engineering comes in. Analyzing sales data and food costs can help restaurateurs decide which menu items to emphasize, which prices to increase and which offerings to eliminate altogether to optimize their bottom line. A smart menu design can highlight the food or drinks that will keep customers coming back or help with kitchen operations. Sean Willard, a menu engineering specialist with Menu Engineers, estimates diners spend fewer than 90 seconds after sitting down browsing the menu. That puts pressure on restaurants to present customers with menus that help them order the meal they’ll enjoy the most, quickly. The restaurant industry has been grappling with higher commodity costs for months now as demand for restaurant meals snaps back but their supply chains lag.
The Save Mart Companies announced that it has been acquired by Kingswood Capital Management LP, an operationally focused private equity firm based in Los Angeles with significant experience in the retail sector. Terms of the transaction were not disclosed. Headquartered in Modesto, Calif., The Save Mart Companies operates 204 stores under the banners of Save Mart, Lucky California and FoodMaxx, and serves communities throughout California and Northern Nevada. In addition to its retail operation, the company also operates SMART Refrigerated Transport and is a partner in Super Store Industries, which owns and operates a distribution center in Lathrop, and the Sunnyside Farms dairy processing plant in Turlock. The company was founded by Nick Tocco and Mike Piccinini in 1952, and run by the Piccininis as California’s largest family-owned grocer up until today’s acquisition.
Home & Road
Top 100 retailer RH reported net revenues for fiscal year 2021 at $3.759 billion, a 32% increase over 2020 in its most recent earnings report. The report, released March 29, also showed record results in the fourth quarter, which ended Jan. 29. “We are pleased to report another year of record results with net revenues increasing 32% to $3.759 billion vs. $2.849 billion a year ago and up 42% vs. 2019,” CEO Gary Friedman noted in his executive statement. “If you exclude money-losing online businesses, it represents one of the highest two-year growth rates in our industry.” For the year, net income increased to $689 million, up 153% from $272 million in FY2020. Adjusted diluted earnings per share rose 46% to $26.12 compared with 2020’s $17.83. In the fourth quarter, RH’s net revenues rose to $903 million, up 11% from $812 million over the same three-month span last year. Net income increased 13% in Q4 to $147 million compared with $130 million in 2020, while adjusted diluted earnings per share for 2021 were $5.66, up 12% from $5.07.
A boost in same-store sales and a record-setting performance in e-commerce propelled Top 100 retailer Conn’s Inc. to a strong year of sales and a solid Q4 in its most recent earnings report. For the year ended Jan. 31, The Woodlands-based retailer reported strong same store sales combined with the contribution of new stores, which drove its 12-month sales figure to $1.305 billion or a 22.7% increase in total retail sales from the Jan. 31, 2021, figure of $1.064 billion. In the just-completed year, Conn’s said e-commerce sales increased 171.3% to post an annual record of $71.3 million. Net earnings increased to $3.61 per diluted share, compared with a net loss of 11 cents per diluted share last fiscal year. Net income for the fourth quarter of fiscal year 2022 was $7.6 million, or 26 cents per diluted share, compared with net income for the fourth quarter of fiscal year 2021 of $25.1 million, or 85 cents per diluted share.
Net sales for Lovesac, the furniture company known for its Sactional adaptable sofas, grew by 51.3% in the fourth quarter and 55.4% for fiscal year 2022. Gross profit dollars increased by 45.9% to $109.4 million for the fourth quarter of fiscal 2022, compared with $75.1 million in the fourth quarter of last year. Net income increased by 50.4% to $32.6 million for the fourth quarter of fiscal 2022, compared with $21.7 million in the prior year period. This resulted in net earnings per share of $2.15 compared with net earnings per share of $1.44 in the fourth quarter of last year, an increase of 49.3%. For the full year, net sales came in at $498.2 million, which is a 55.3% increase over last year’s net sales of $320.7 million. Gross profit for the full year came in at $273.3 million, which is a 56.4% increase over last year’s gross profit of $178.4 million. Earnings per share for the full year came in at $3.04 which is a 200.8% improvement over last year’s EPS of $1.01.
Online secondhand furniture marketplace Kaiyo announced a $35 million Series B funding round comprised of equity and debt, led by Edison Partners. The investment will be used to further accelerate growth and market expansion, starting with California. This funding round comes amidst rapid growth for Kaiyo, which has experienced more than 100% consistent growth every month over the past two years due to growing interest in the circular economy and pandemic-induced supply chain issues. “At Kaiyo, our mission is to make great design accessible to everyone. Furniture is one of the largest investments consumers make, yet historically, re-selling has posed a significant challenge, making it a major contributor to landfill waste,” said Alpay Koralturk, founder and CEO of Kaiyo. “In the last few years, our revenue growth and customer satisfaction scores have proven that by putting convenience first and intelligently leveraging data, we incentivize more people to consider secondhand as their first option,” he continued.
Jewelry & Luxury
In February, Indian diamond company Renaissance Global announced it was buying all the assets of Four Mine Inc.—which does business as With Clarity—for $5 million. “Four Mine Inc. specializes in the sale of branded lab-grown diamond engagement rings,” Renaissance said in a statement. “This transaction will give Renaissance a strong foothold in this space, apart from improving the operating margin of the business through supply chain efficiencies.” The statement did not list Four Mine’s revenue, but in 2019, it said it had $20 million in revenue.
A vocal group of sellers on Etsy, the craft-selling site where jewelry has always been a mainstay, is urging both buyers and sellers to boycott the company for one week in April to protest the increase in the transaction fee paid by its sellers. An online petition, which at publication time had over 21,000 signatures, urges buyers and sellers not to use the platform April 11–18. Petition organizer Mattie Boyd tells JCK that “8,600 Etsy sellers have signed on to strike as of this morning, but we expect that number to continue to grow.” Etsy recently announced it was increasing its transaction fee from 5% to 6.5% on April 11. “Etsy’s last fee increase was in July 2018,” complained the petition. “If this new one goes through, our basic fees to use the platform will have more than doubled in less than four years.”
In recent months, Rare Carat, the site that originally billed itself as a “Kayak for diamonds,” which let consumers comparison-shop e-tail jewelers, changed its business model, and it’s now doing fulfillment for wholesalers that want to become consumer brands. A page welcomes manufacturers, including those who have never sold direct to consumers before, to sell on the site. After completing a screening process, its “design team will help you create a consumer brand to list under, to help you avoid conflict with your current sales channels,” the site said.
Office & Leisure
Mention Lego and most people have a story to tell. They used to play with Lego when they were kids. They just bought a set. Lego is ubiquitous. And the company is showing no signs of slowing down. Earlier this month the retailer reported that 2021 sales came in at over $8 billion. It opened 165 stores last year and is in the middle of expansion in China. Even as the world was in the throes of COVID-19, consumer sales jumped 21% in 2020, outpacing the industry’s growth that year. Lego also strategically partners with other retailers and helped to create an aisle in the toy section of box retail stores, according to James Zahn, deputy editor of “The Toy Book.” An example of this was in Q4 of last year when Target announced a partnership with the toy company for the holiday season. This year, as the company celebrates its 90th anniversary, Lego is dominating the toy industry as it follows its mission to “be a global force for learning through play.”
AMC Entertainment Holdings Inc Chief Executive Adam Aron said the movie-theater chain would embark on more “transformational” deals to capitalize on the interest of retail investors following its bet on a troubled gold and silver mine operator. AMC unveiled a $27.9 million investment for a 22% stake in Hycroft Mining Holding Corp about two weeks ago, an unusual deal for a company operating more than 900 theaters worldwide that raised eyebrows among market observers. AMC’s investment called upon a $1.8 billion “war chest” it raised in 2021 by selling its shares in the open market, in part on the back of retail investors who turned it into a popular ‘meme’ stock. “I’d like to think there will be more third-party external M&A announcements going forward where AMC can reach for the stars and intriguing investments that have potentially attractive returns,” Aron told Reuters. AMC’s stock in mid-March had fallen to around $14 but rebounded to more than $20 following the Hycroft investment. Hycroft, which was on the verge of bankruptcy prior to a cash infusion from AMC and longtime precious-metals investor Eric Sprott, said on Friday it had subsequently raised nearly $195 million through open-market stock sales as other investors followed Aron’s lead.
A specialty teen apparel retailer is expanding its presence on the Roblox digital gaming platform in a big way. Pacsun is opening a fantasy interactive mall experience on Roblox, called Pacworld. Working with existing game development studio partner Melon, Pacsun will extend its existing catalogs of virtual items on Roblox, first launched in June 2021, by letting customers sell its virtual goods in customized digital malls. Within this new social and shopping metaverse environment (where consumers use augmented and virtual reality (AR/VR) technology to digitally engage with each other and their surroundings, with crossovers into the physical world), customers can virtually become the owner and operators of a new mall, and it is their objective to make the mall as profitable and popular as possible. Customers will be able to create and remove shops, upgrade the shops that do well, decorate the mall to try and attract more customers, and invite their friends to visit their mall.
Technology & Internet
Employees at an Amazon warehouse on New York’s Staten Island voted Friday to join a union, a groundbreaking move for organized labor and a stinging defeat for the e-commerce giant, which has aggressively fought unionization efforts at the company. The tally was 2,654 votes in favor of joining the union and 2,131 opposed. Approximately 8,325 workers were eligible to vote whether to become part of the Amazon Labor Union. There were 67 challenged ballots, a gap that’s too narrow to change the outcome of the election. The results still need to be formally certified by the National Labor Relations Board. The Staten Island facility, known as JFK8, is Amazon’s largest in New York and now has the distinction of being the first in the U.S. to unionize despite workers having to stare down a hefty anti-union campaign. Amazon papered the walls at JFK8 with banners that proclaimed “Vote No,” set up a website and held weekly mandatory meetings. It even hired an influential consulting and polling firm with close ties to Democratic political groups, and touted its own benefits over those offered by unions. By voting in the Amazon Labor Union, Staten Island workers could challenge the company’s current labor model, which is the backbone of its Prime two-day shipping promise. Unions stand to disrupt the level of control that Amazon exerts over its warehouse and delivery employees, like its ability to unilaterally set the pace of work and hourly wages, labor experts previously told CNBC.
Amazon has chosen to renew a deal allowing JPMorgan Chase to issue the tech giant’s flagship rewards credit card, ending months of heated negotiations, CNBC has learned. The Amazon Prime Rewards card was one of the industry’s most highly coveted co-brand deals, a rare prize because of the massive scope of Amazon’s loyalty program, with its estimated 150 million U.S. members, according to people with knowledge of the talks. While JPMorgan has issued Amazon’s card since it was little more than an online bookseller two decades ago, that didn’t stop Amazon from soliciting bids to replace the bank in mid-2021. American Express and Synchrony were among the issuers involved in discussions, and Mastercard had hoped to displace Visa as payments network, said the people, who declined to be identified speaking about the private process. “This was a once-in-a lifetime opportunity to penetrate Amazon and have a step change in your card business,” said one of the people. Credit card deals with popular brands including Amazon, Costco and American Airlines have become some of the most hotly contested contracts in the financial world. That’s because they instantly give the issuing bank a captive audience of millions of loyal customers who spend billions of dollars a year.
Finance & Economy
U.S. employers added a booming 431,000 jobs in March as tumbling COVID-19 cases more than offset growing concerns about soaring inflation and the war in Ukraine. The unemployment rate fell from 3.8% to 3.6%, the Labor Department said. Economists surveyed by Bloomberg had estimated that 440,000 jobs were added last month. The economy remarkably has now added more than 400,000 jobs a month for 11 months, the longest such streak on record, Morgan Stanley noted in a report. So far, the nation has recovered 20.4 million, or 93%, of the 22 million jobs lost early in the pandemic, leaving it 1.6 million jobs short of its pre-crisis level, a gap that could be closed by summer.
Consumer spending rose a mild 0.2% in February, but rising prices due to high inflation played a big role and is weighing on the U.S. economy. Economists polled by The Wall Street Journal had forecast 0.5% increase. A key measure of inflation also included in the report, meanwhile, also rose 0.6% last month, government figures showed. So real spending actually declined. One bit of good news: The increase in spending in January was revised up to 2.7% from 2.1%. Taking the two months together, consumer spending got off to a healthy start in 2022 and exceeded the rise in inflation. Incomes rose 0.5% in February. Wages have also climbed rapidly over the past year, but not as fast as the increase in the cost of living.