Through the early stages of the COVID-19 pandemic, a predominant thought has been that digital brands – those generating a significant portion of their revenue online – should fare better, if not well, as consumer are confined to their homes with little alternative but to shop online. In some cases, that has borne out thus far; we’ve seen a high percentage of companies in food, beverage, nutrition, personal care, individual fitness, and home performing at or better than projections. Across the broader consumer spectrum, that hasn’t been the case.
While some brands have seen an uptick in online sales over the last month, many more have had to deal with adverse effects. Revenue declines, store closures, supply chain weaknesses, fulfillment center issues, and remote workforces are among the many challenges. For brands with their own brick and mortar locations, it’s been especially difficult. Closing stores is a big hit to revenue and creates entire retail teams who can’t report to work. In navigating that minefield of reduced sales, ongoing expenses, uncertainty of reopening, and concerns that pockets of business may never return, many companies have moved quickly with furloughs and layoffs.
In the past month, hundreds of retailers have indefinitely closed retail stores and put all community and in-person events on hold. A look across the landscape shows that even the highest of flyers have been affected in the first few weeks of the pandemic.
Apparel brand Everlane closed six stores and laid off 290 employees. The company has reportedly seen sales drop 25%.
Travel brand Away closed 10 retail stores, furloughed 50% of employees, and laid off 10%. In a Medium post, the founders announced that Away sales had dropped 90%. For a travel brand, a precipitous decline in sales was expected, but 90% is staggering.
Retail company b8ta furloughed all store employees – around 250 in total – and is laying off over half of its corporate employees. It is also reducing pay for remaining employees.
Co-working company The Wing laid off half of its full-time staff and most of its hourly employees, and furloughed its other workers. The company had about 150 full-time staff at its headquarters, and roughly 300 hourly employees across its eleven locations.
ClassPass is laying off or furloughing over half its staff of roughly 700. Of the 53% of employees affected, 22% have been laid off and 31% furloughed.
Mattress company Casper, which has sixty retail stores, has started to furlough all of its retail employees. Apparel rental company Rent the Runway closed all of its stores and laid off all of its retail staff. Tuft & Needle closed all retail stores and laid off staff. Warby Parker has 120 stores and closed all of them, as did Glossier and Outdoor Voices. ThirdLove closed theirs as well and laid off 30% of staff.
While the initial focus has undoubtedly been on cutting costs and reducing overhead, digital brands have started to look beyond store closures and smaller teams. On the marketing side, many have slashed spend – a trend that started before the arrival of COVID-19 – and have instead prioritized user generated content and community building. They’ve also collaborated in the hopes that sharing customer bases and audiences will be helpful, and in some cases to provide support through donations. Two such collaborations are Brands x Better, a group of brands donating 10% of proceeds during the pandemic to charities, and Staycation, a digital version of what was a physical pop-up featuring a host of digital brands.
While we’re in the early stages of response and it remains unclear how some companies will ultimately emerge from this, the evolving market conditions are expected to have lasting implications for digital brands. Whether these conditions enable good businesses to ride a societal need or a cultural wave to achieve success, or whether the conditions serve to separate the strongest business models from the weakest, digital brands and the space as a whole won’t be the same.
Headlines of the Week
US weekly jobless claims jump by 6.6 million and we’ve now lost 10% of workforce in three weeks
Jobless rolls continued to swell due to the coronavirus shutdown, with 6.6 million Americans filing first-time unemployment claims last week, the Labor Department reported. That brings the total claims over the past three weeks to more than 16 million. If you compare those claims to the 151 million people on payrolls in the last monthly employment report, that means the U.S. has lost 10% of the workforce in three weeks.
Apparel & Footwear
Fast Retailing sharply cuts earnings outlook due to virus outbreak
Fast Retailing Co. on Thursday sharply cut its earnings outlook for its business year ending in August as the global outbreak of the new coronavirus forced the casual clothing retailer to close most of its overseas stores in Asia, Europe and North America. In its interim earnings report, the operator of the Uniqlo chain slashed its group net profit forecast to ¥100 billion ($918 million) from the earlier estimate of ¥165 billion, saying its guidance is based on an assumption that sales will gradually recover from June. It lowered the operating profit outlook to ¥145 billion from the previously expected ¥245 billion and sales to ¥2.09 trillion from ¥2.34 trillion. As of April 7, a total of 412 Uniqlo stores were temporarily shut globally, it said. Tadashi Yanai, chairman and CEO of Fast Retailing, said in a news conference that suspension of production in Bangladesh and India could affect its future product supplies. In China, its business is recovering with almost all of its some 740 stores in China reopened, including 12 in Wuhan where the virus outbreak originated.
NYDJ, Saxx, MeUndies and Tommy John Were Looking for Buyers—and Then the Pandemic Hit
Retailers seeking deals have seen those processes halted due to the coronavirus crisis. A number of brands were being pitched to potential buyers and investors as the coronavirus pandemic took root in the U.S., according to multiple sources, but those processes have largely been put on hold. That’s not surprising with retailers in survival mode, focused on conserving cash as the spread of the coronavirus hits consumers’ pocketbooks. MeUndies, Saxx Underwear, Tommy John and NYDJ were all up for grabs, according to sources familiar with the talks. None of the companies responded to requests for comment. Sources also said MeUndies, Tommy John and Saxx were attempting either a sale or to attract a major investment to continue to grow the business.
PVH completes sale of Speedo North America for $170M
PVH announced that it completed the sale of its Speedo North America business to Pentland Group for $170 million in cash, subject to a working capital adjustment, according to a company press release. Pentland Group will now operate the Speedo business globally. PVH had touted the sale as helpful in meeting its challenges brought on by the COVID-19 pandemic. In a statement, PVH CEO Emanuel Chirico called the move “strategic” as the company works to “optimize and streamline” its portfolio and focus on its Calvin Klein and Tommy Hilfiger brands. PVH is following a playbook similar to VF Corporation, which in 2018 spun off its denim business to focus on its better-performing brands. While the loss of Speedo sales could sting to the tune of $225 million, it will nevertheless free up resources.
Coronavirus: Cath Kidston set to call in administrators
Cath Kidston, the floral fashion brand, is set to file for administration as the coronavirus shutdown pushes High Street retailers to breaking point. The move will put nearly 950 jobs at risk at the company which is best-known for its brightly-coloured designs. Cath Kidston confirmed that it intends to appoint advisory firm Alvarez & Marsal as administrators. Cath Kidston employs 941 people, of which 820 have been furloughed under the government’s employee payment scheme. After the coronavirus outbreak forced store closures, Cath Kidston has stayed open online. But most employees were furloughed on 22 March which means the government will pay 80% of an employee’s wages up to £2,500 a month.
Athletic & Sporting Goods
Tactics Acquired by TSI Holdings, Owner of Huf
TSI Holdings Co., Ltd., through its U.S. subsidiary TSI US Holdings Co., Ltd., has acquired an 88% equity interest in Tactics, a leading specialty skate and snow retailer. Founded in the Pacific Northwest in 1999, Tactics operates a robust online business at www.tactics.com and retail stores in Portland, Eugene, and Bend, Oregon. TSI Holdings is a Japan-based public company engaged in the apparel and hospitality industries and owns or licenses over 40 brands including HUF Worldwide, Undefeated, Bait, Union, Herschel Supply, Stussy, Avirex, and Urth Caffé, among others. The company has over 20 subsidiaries and operates over 1,000 storefronts in Japan and abroad.
Dick’s Sporting Goods is furloughing most of its 40,000 employees
Dick’s Sporting Goods is finding it difficult to operate without any sports, gyms or basically any other physical activity. The sporting goods retailer reported that it’s furloughing a “significant number” of its roughly 40,000 employees. Affected employees will still continue to receive their benefits. Dick’s said in a regulatory filing that because of the coronavirus, it’s “increasingly evident” that its more than 800 stores aren’t going to reopen anytime soon. It will keep on a small number of employees to fulfill online orders and curbside pickups.
Vicis assets sold for $2.85M to Schutt investor, promising to revive failed startup’s helmet tech
After a sudden downfall last year that left high-tech football helmet maker Vicis out of cash and no longer in business, a New York City investment firm has purchased the assets of the failed Seattle startup out of receivership, with plans to form a new company. Innovatus Capital Partners paid $2.85 million for Vicis’ assets following a three-month process to salvage what was left of the company, according to King County Superior Court records. In October, Innovatus made a $18 million investment in Litchfield, Il.-based Schutt, one of the leading U.S. football helmet manufacturers and a Vicis rival. Vicis reported $13.8 million in revenue last year, with a net loss of $28.8 million, according to receivership documents. The startup had more than $10 million in pre-receivership liabilities.
Cosmetics & Pharmacy
L Catterton Invests in Japanese Beauty Brand Etvos
Japanese beauty brand Etvos has received a significant investment from Groupe Arnault and LVMH-backed global private equity firm L Catterton’s Asia fund. Etvos is Japan’s leading natural cosmetics brand. Founded by Hifumi Ogawa in Osaka in 2007, Etvos was a pioneer in introducing 100% made-in-Japan mineral-based makeup products. With the philosophy of delivering products that are “truly gentle to the skin,” Etvos has introduced a wide range of natural skincare, makeup, and haircare products, including mineral-based makeup that does not require a post-application cleansing, as well as ceramide-based skincare products, whose efficacy is backed by research. Etvos directly operates 6 stores with in-store beauty advisors across four major Japanese cities, as well as 435 multi-branded stores and online channels. With approximately $20 billion of equity capital across seven fund strategies in 17 offices globally, L Catterton is the largest consumer-focused private equity firm in the world.
Margaret Dabbs London Sells Minority Stake
British beauty brand Margaret Dabbs London has sold a minority stake to Best World International with the potential of acquiring 100% of the business. Margaret Dabbs London was founded in 2004 and is globally recognized for luxury results-driven feet, hands, and leg products and services. In 2007 the brand was approached by Harrods to open a clinic on the fifth floor of the London flagship. Since then Margaret Dabbs London has established a total of nine clinics throughout the UK, and four internationally in the Middle East and Spain. The product range initially made for use in the clinics is available in retailers including Liberty, Harrods, John Lewis, and SpaceNK in the UK. Founded in 1990, Best World International (BWI) is a Singapore-based company specializing in the development and distribution of premium skincare, personal care, nutritional, and wellness products. According to The News Market, Margaret Dabbs London made £7.7 million in revenue and £1.8 million EBITDA for the year ending 31 December 2019.
Beauty and Personal Care Sales Predicted to See Steepest Decline in 60+ Years
Kline predicts the Covid-19 pandemic will create the sharpest decline ever recorded in the 60+ years it’s been tracking the US cosmetics and toiletries market. To date, the 0.8% drop in 2009 during the last recession is the biggest market dip ever reported by Kline, followed by a noted market decrease of 0.3% in 1991 during another recession. Previously forecast to grow at a CAGR of 3.8% through 2023, Kline has revised its forecasts for the $75 billion US market due to the unfolding crisis. New forecasts, published by Kline last week, indicate a decline of 2.5% in 2020 as the most likely outcome, with the best-case scenario reflecting a 1.5% gain and the worst-case scenario, an 8.1% drop. “Given the unprecedented situation that is unfolding globally as both a health crisis as well as a financial one, it is not surprising that the beauty market should experience its worst performance now,” says Carrie Mellage, Vice President of Kline’s Consumer Products Practice.
Rite Aid kicks off hiring blitz, expands store safety efforts
Rite Aid has announced big hiring plans, as well as new steps to respond to the COVID-19 pandemic. The Camp Hill, Pa.-based retailer said it would be hiring 5,000 full- and part-time associates nationwide to support its stores and distribution centers, including cashiers, pharmacy technicians and DC associates. As it looks to grow its workforce, Rite Aid said that it also has created a “Hero Program” to recognize associate efforts to provide for their communities. Among the components of the “Hero Program” is an extension of the $2-per-hour increase in wages for hourly associates through May 2. Additionally, store management, including pharmacists, have received a “Hero Bonus” of $1,000, and the company bumped its employee discount up to 35% through at least the end of April. Rite Aid also has a “Pandemic Pay” policy that focuses on compensating workers diagnosed with COVID-19 or quarantined because of exposure. Rite Aid said it has been allowing associates to wear masks and gloves, and is in the process of installing Plexiglass sheileds at pharmacy and front-end counters to offer more protection for associates and customers.
Discounters & Department Stores
TJX furloughs most of its 286K workforce
The TJX Companies, which runs TJ Maxx, Marshalls and other off-price businesses, on April 12 will implement furloughs for most store and distribution center workers in the U.S. and Canada, with benefits for eligible employees continuing at no cost to them, according to a Securities and Exchange Commission filing. The closure of those facilities is extended indefinitely beyond the previously anticipated two-week closure in mid-March. Store workers will be paid through April 11 before furloughs begin. As of February 1st globally, the company had about 286,000 employees, many who “work less than 40 hours per week,” most in its more than 4,500 retail stores in nine countries, according to its most recent annual report, filed last month. The majority of its stores — 3,290 — are in the U.S.
Macy’s CFO Paula Price to depart in May
Macy’s said Tuesday that Chief Financial Officer Paula Price will be leaving the company, effective May 31. The company said an external search is underway for Price’s replacement. It also said Price will remain an advisor to Macy’s until November. Price has served as CFO since July 2018. “We will continue to take all necessary actions to ensure that Macy’s, Inc. emerges from this pandemic on solid footing and ready to serve our customers,” CEO Jeff Gennette said in a statement. “Paula remains a critical part of our plan, and while I respect her decision, I also appreciate the long runway she is giving us for this transition.”
Department stores top list of consumer companies most likely to default on debt
America’s department store chains have seen their odds of defaulting escalate more than any other consumer-facing companies over the past month, according to a new analysis by S&P Global Market Intelligence. “Coronavirus-related challenges are mounting for an already struggling group of retailers,” the firm said in a note to clients Thursday morning. S&P Global Market Intelligence’s median, one-year probability of default represents the odds that a company will default on its debt within the next year, based on fluctuations in a company’s share price and other risk factors. That jumped to higher than 40% for some industries earlier this month. That’s compared with being under 10% at the end of February, according to the firm’s analysis of publicly traded consumer companies in the U.S.
Nordstrom: Prolonged store closures could lead to financial distress
In a filing to the Securities and Exchange Commission Wednesday, Nordstrom emphasized what are often somewhat boilerplate warnings about challenges to its business, saying that the COVID-19 pandemic may “have the effect of heightening many of the other risks described in this ‘Risk Factors’ section.” That includes risks “relating to our high level of indebtedness, our need to generate sufficient cash flows to service our indebtedness, and our ability to comply with the covenants contained in the agreements that govern our indebtedness.” The retailer went so far as to say that its “financial situation could become distressed” if it’s forced to keep stores closed for very long, and if the economy takes a turn for the worse in the longer term.
Emerging Consumer Companies
Pet brand Spot & Tango raises seed round
Spot & Tango, the digitally-native pet food brand, announced that it has raised $4.2 million in seed funding in a round led by Guild Capital. The company also announced the launch of a new line of pet food called UnKibble. Launched in 2018 with a line of fresh, wet dog food recipes, Spot & Tango competes with upstarts like The Farmer’s Dog to develop customized meals for dogs using fresh ingredients fine enough for human consumption. It has delivered more than 1 million meals, and has quadrupled the size of the business in the last six months.
Travel brand Away furloughing and laying off employees
Away, the five-year-old, New York-based travel brand, announced that it has furloughed half of its employees, laid off roughly 10% of its workforce, and reduced salaries. Those laid off will receive a minimum of eight weeks of severance and will have their healthcare coverage through the end of June. Away has raised $180 million from investors over the years, including a $100 million round last year that valued the company at $1.4 billion — nearly three times where it was valued a year earlier. The company disclosed that revenue has fallen by more than 90% over the past few weeks.
Maude, sexual wellness brand, launches Staycation, and online collection of stay-at-home brands
Launched by sexual wellness company Maude, Staycation is an online hub of 25 brands that are ideal for flourishing in the stay at home world of today. Brands include Brightland, East Fork, Golde, Great Jones, and Floyd. Maude originally opened Staycation as a pop-up shop in New York City last summer, and now aims to make the digital version even bigger.
Grocery & Restaurants
DoorDash cuts commission fees by 50% for independent restaurants
DoorDash, one of the nation’s leading delivery operators, said Thursday that it would cut by 50% commission fees for independent restaurants, a move that will save local mom-and-pop restaurants thousands of dollars over the next several weeks. The 50% reduction applies to restaurants that have five or fewer locations on the DoorDash app. The relief, which runs April 13 through the end of May, would apply to roughly 150,000 restaurants in the U.S., Canada and Australia. DoorDash said waived fees vary based on a restaurant’s negotiated contract. Commissions typically cover the costs for delivery and for being listed on the DoorDash app, often called the marketplace.
How COVID-19 will affect 2020 food trends
Expect to see several emerging food and beverage trends change course as consumers cope with the coronavirus crisis in the United States, said Suzy Badaracco, president of Culinary Tides, Inc. Prior to the pandemic, experts predicted momentum for meat alternatives, low- or no-alcohol beverages and sustainability-driven purchasing behaviors. The trajectory of these trends has been altered by the political and economic uncertainty created by COVID-19, Ms. Badaracco said in a new report. Consumers may behave more conservatively and cautiously in the months to come, relying on food and beverages that provide comfort and familiarity. Such behavior does not bode well for plant-based meat alternatives, Ms. Badaracco noted. The dairy category, with its “winning combination of health attributes and comfort,” also may benefit from changing consumer attitudes, Ms. Badaracco said. A third trend reversal expected to occur in a post-pandemic world is a de-escalation of sustainability spending while consumers regain financial footing.
McDonald’s to save $1 billion by reducing remodels, halting new unit growth
McDonald’s Corp. CEO and President Chris Kempczinski said he is taking a 50% salary cut, reducing Experience of the Future remodels across the U.S. and halting new restaurant growth worldwide as a result of the coronavirus pandemic. Kempczinski, who has been leading the company less than a year, announced the new strategies on Wednesday as part of a COVID-19 business update for the Chicago-based quick-service chain. While sales have been significantly impacted by the crisis, same-store sales at the brand were not as brutal when compared to other chains — especially full-service brands that are not benefiting from having drive-thru lanes to serve social distancing customers. To ensure cash flow, the company has secured $6.5 billion of new financing.
TGI Fridays’ SPAC Merger Is Terminated
Blaming “extraordinary market conditions,” the TGI Fridays deal with Allegro is off. According to an SEC filing, leaders at Allegro Merger Corp. and TGIF Holdings “mutually determined” that because of COVID-19-related issues and “failure to meet necessary closing conditions” the deal could not proceed. The SPAC merger, where a public holding company merges with an acquisition target, was announced in November 2019 and would have cleaned up Fridays’ $350 million in debt and cashed out private equity owner Sentinel Capital Partners to the tune of $30 million in cash along with some shares of the future company. The specifics of the closing conditions were not announced, but with COVID-19 ravaging the restaurant segment, any typical performance obligations would be nearly impossible to meet.
Home & Road
Pier 1 considers bid that would close over 800 stores
Pier 1 Imports Inc. is expected to receive a revised purchase offer in bankruptcy that would keep open fewer than 100 of the company’s 900-plus locations, according to people with knowledge of the developments. The bid, from a company called CSC Generation, comes after the retailer’s bankruptcy court process was paused while stores are shuttered in accordance with coronavirus containment measures. Bloomberg previously reported that Pier 1 was weighing a bid that would keep a small portion of its locations open. With most liquidation sales halted, stakeholders have fewer options before them when retailers collapse. While bankers and debtholders typically compare a company’s recovery prospects with the estimated cost of liquidation sales, the latter has become impossible to gauge with commerce shut down across the U.S. With no present option to liquidate, Pier 1’s lenders have looked at taking over equity control of the chain. But that idea may not be particularly attractive as the nation slips into a possible recession.
Mexico plants set sights on competing on global scale
Mexican furniture manufacturers and companies that build or source product in Mexico are touting its proximity to the U.S. market as a key advantage in a global sourcing environment dominated by issues ranging from China tariffs to COVID-19. That said, they also realize global competition remains a challenge and one that could separate the strong from the weak moving forward. “When we come in and partner up with a factory, we try to bring that factory up to a new level,” said Ralph Orozco, president of Horizon Home during an interview at one of the company’s six source factories in Puebla. “The market is asking for new product and more up-to-date product, and we try to teach our partners here in Puebla that the competition is not the factory across the street. The competition is global.”
Jewelry & Luxury
De Beers, Graff, Kering, and Tiffany Donate Millions to COVID-19 Relief Efforts
A few of jewelry’s most established companies have announced million-dollar-plus donations to help aid COVID-19 relief efforts around the world. The Tiffany & Co. Foundation said it’s allocating $750,000 to the World Health Organization’s COVID-19 Solidarity Response Fund and $250,000 to the New York Community Trust’s NYC COVID-19 Response & Impact Fund (for a total contribution of $1 million).
Luxury brands bid adieu to Hong Kong amid coronavirus and unrest
Causeway Bay, the heart of Hong Kong’s retail landscape and the world’s priciest shopping district by rent, was eerily quiet at noon on Thursday. In an area usually swarming with tourists, shop staffers sat idle, fiddling with their smartphones. The Times Square shopping center was a ghost town, and the plethora of big-name stores in the vicinity stood all but empty. A lack of import tariffs made Hong Kong a haven for luxury brands from around the world. But as pro-democracy protests and the novel coronavirus pandemic have driven tourists away from a city whose economy relies on them, many companies are deciding that waiting out these crises is no longer worth the cost. Foreign luxury brands quietly began packing up and leaving last fall as the demonstrations made it harder for them to operate, but the trend has picked up speed this year.
Metal + Smith Introduces Virtual Trade Shows to the Jewelry Industry
What began in New York as an alternative to traditional jewelry shows and expos in 2016, is now headed to the world wide web. Beginning May 1st, Metal + Smith will roll out the industry’s first virtual trade show experience, connecting retailers, editors, and influencers to a global rolodex of Independent Jewelry Designers. “As a group we remain committed to maintaining a sense of togetherness which makes this pivot to an online solution the next logical step for our portfolio,” commented Olivia Lucas, senior account manager.
Office & Leisure
Six Flags Increases Revolving Credit Facility to $481MM
Six Flags Entertainment Corporation, the world’s largest regional theme park company and the largest operator of waterparks in North America, announced that certain of the company’s revolving credit lenders agreed to provide an incremental $131 million of revolving credit commitments to its senior secured revolving credit facility, increasing the facility from $350 million to $481 million. “The increase in our revolving credit facility, combined with actions we have taken to reduce operating expenses and capital expenditures, provides us with significant runway to operate in this uncertain environment,” said Mike Spanos, President and CEO. As previously announced, the company suspended operations of its North American parks beginning March 13, 2020 due to the spread of COVID-19. The company expects to keep its parks closed until at least mid-May and to reopen as soon as possible thereafter.
Japan’s SoftBank to invest $48 million in Brazil pet products site Petlove
Japan’s SoftBank Group Corp reached an agreement to invest 250 million reais ($48 million) in pet products online retailer Petlove, the companies said in a statement on Tuesday. The investment will come from SoftBank’s Latin America fund, adding to previous venture capital investments from KasZek Ventures, Monashees and private equity firm Tarpon. Petlove founder Marcio Waldman said in a statement the investment would help accelerate Petlove’s growth amid higher demand for online services during the social isolation period mandated by Brazilian authorities to limit the spread of the novel coronavirus. Brazil’s pet market had 24 billion reais in revenue last year, among the three largest in the world, according to Euromonitor data. Online sales represent only 3.8% of total sales of pet supplies in Brazil, whereas in the United States they exceed 18% said SoftBank partner Paulo Passoni in the statement.
Apex Parks Group, LLC announced that it is pursuing a comprehensive financial restructuring aimed at reducing the Company’s current debt and, ultimately, enhancing operations to continue to serve guests and communities for years to come. As part of this process, Apex expects to enter into a stalking horse purchase agreement with the Company’s prepetition secured lenders to sell substantially all of the Company’s assets and operations and has filed for Chapter 11 of the United States Bankruptcy Code in the District of Delaware to facilitate the sale. The Lenders will also provide financing to support the Company during the restructuring. The Chapter 11 process will not affect the operations of Apex’s 10 family entertainment centers and two water parks in California, Florida, and New Jersey. The Company has temporarily closed all locations in accordance with federal and local government mandates and CDC guidelines to proactively protect guests and employees in response to the COVID-19 pandemic but expects to return to operating in the ordinary course upon reopening of the locations.
Technology & Internet
Amazon plans to delay Prime Day
Amazon.com Inc. will delay its July “Prime Day” sales event at least until August, according to a report from Reuters. The promotion began in 2015 as a way to drum up business during the summer when many people are on vacation and to entice customers to subscribe to Prime before the busy holiday shopping season. Amazon Prime members, who pay monthly or yearly fees for shipping discounts and other perks, spend more on the site than regular shoppers.
Etsy rallies its sellers to make face masks
Etsy crafts never seemed like essential goods. But on Friday, the same day the White House announced guidelines that Americans should wear masks outside of the home, Etsy Inc. sent a push notification to every craftsperson on its website in the U.S.: “Calling all sellers,” it said. “Start making face masks.” The website is becoming a go-to destination for homemade cloth masks. Etsy said there was an average of one mask-related search on the site every two seconds in March. Last week, more than 10,000 sellers sold at least one mask apiece. Unlike the medical-grade equipment now in woefully short supply at U.S. hospitals, cloth masks can be quickly constructed by anyone with a sewing machine and some elastic. That means the skillsets of legions of Etsy crafters are suddenly in very high demand. “The Etsy community is uniquely positioned to address this crucial need,” the company’s chief executive officer, Josh Silverman, wrote in a blog post.
Finance & Economy
U.S. consumer prices post largest drop in five years amid coronavirus disruptions
U.S. consumer prices fell by the most in more than five years in March and further decreases are likely as the novel coronavirus outbreak suppresses demand for some goods and services, offsetting price increases related to shortages resulting from disruptions to the supply chain. With the country virtually at a stand-still, the economy rapidly contracting and millions unemployed as state and local governments adopt stiff measures to control the spread of COVID-19, the respiratory illness caused by the coronavirus, economists are predicting the disinflationary trend will persist for a while or even a short period of outright deflation.
US services sector growth slows down in March, ISM says
Activity in the U.S. services sector slowed down in March as business grapple with the coronavirus outbreak, data released by the Institute for Supply Management showed. The ISM non-manufacturing index fell to 52.5 last month from 57.3 in February. Economists polled by Dow Jones expected the ISM services index to fall to 45. To be sure, the report may not capture the full extent of the virus’ impact on the economy, meaning future data on the sector could be much worse. “Respondents are concerned about the coronavirus impact on the supply chain, operational capacity, human resources and finances, as well as the ramifications for the overall economy,” said Anthony Nieves, chair of the Institute for Supply Management, in a statement.
