With COVID-19 vaccines rolling out, and optimism growing that the pandemic will be under better control soon, at least one segment of consumers is chomping at the bit: travelers. According to an American Express Travel survey taken in January, 78% of respondents want to travel this year to relieve the stress of 2020. In fact, recent data suggest that many people are already starting to stretch their travel legs. The Transportation Security Administration (TSA) announced last month that daily passenger counts in U.S. Airports have reached their highest point since March of last year, when the World Health Organization declared COVID-19’s spread a pandemic. Additionally, the hospitality industry analytics firm STR reported last week that, over the week ended April 10th, the U.S. hotel industry posted its highest demand and occupancy levels since the beginning of the pandemic, with occupancy just under 60%. In contrast, hotel occupancy bottomed during the early stages of the pandemic at 22%. Clearly, travel is making a comeback, and with vaccine inoculations reaching new highs every day, it seems poised to strengthen much further.
While real-time indicators such as airport throughput and hotel occupancy are showing encouraging signs, certain leading indicators are foreshadowing a coming explosion of travel. Travel app Hopper reports that web searches for summer domestic flights surged nearly 50% in the second half of February, far outpacing the typical seasonal ramp up. Further, the Travel Technology Association’s report ‘Future Travel Enthusiasm in the Age of COVID-19’ reported that 82% of American families surveyed had already made travel plans for 2021, and 65% of respondents plan to travel more than they did pre-COVID. Accordingly, Hopper estimates that prices for domestic flights are expected to rise 4% to 5% every month until this summer (rising prices are not only the result of growing demand, but also reduced supply, as many airlines scaled back routes in 2020 and may be slow to rebuild capacity).
While the data show that excitement about traveling again is rising for many people, there are also signs that travel will not immediately look like it did before the pandemic. First, not everyone will be vaccinated this summer, and many precautions that have become commonplace since the onset of the pandemic are likely to remain. For instance, Airbnb, which surged in popularity last year as many travelers felt safer in smaller homes than in the crowded common spaces of traditional hotels, continues to thrive. Airbnb CEO Brian Chesky told CNBC last week that his company needs millions of new hosts this summer to meet demand, and said “We think there’s going to be a travel rebound coming that is unlike anything we’ve ever seen.” Second, many Americans made long term investments related to travel during the pandemic that are likely to continue to influence both transportation and tourism. One such trend from last year was the boom in RV sales, which is likely to result again in strong demand at campgrounds and national and state parks. Also, certain technologies that became more common last year, such as mobile hotel check-in, and using your cellphone as a room key, have gained popularity over the pandemic and appear here to stay.
With pent up demand, government stimulus, and, most of all, vaccines fueling its return, travel appears to be already on the rebound and heading toward a huge summer. Perhaps there will be some symmetry to the beginning and the end of the pandemic, with the first days of COVID-19 resulting in a mad rush for toilet paper, and the waning days of it resulting in a mad rush for flights and hotel rooms. Have you made your plans yet?
Headlines of the Week
Coinbase’s IPO Lived Up to the Hype. Here’s How It Did
Coinbase Global lived up to the hype. Shares of the cryptocurrency exchange rose nearly 32% Wednesday, valuing Coinbase at nearly $86 billion. Coinbase’s stock opened at $381, peaked at $429.54 and then dropped. Shares closed at $328.28, up $78.28 from Coinbase’s $250 reference price. Nasdaq issued the $250 reference price on Tuesday. With 261.3 million diluted shares outstanding, Coinbase now has a market capitalization of about $86 billion. Founded in 2012, Coinbase is the largest U.S. cryptocurrency exchange, with 56 million verified users in the first quarter. Its online platform allows users to buy, sell, transfer, and store Bitcoin and other digital currencies.
West Marine Enters into Ownership Agreement with L Catterton
West Marine, the leading integrated, omni-channel provider of aftermarket products and services to the boating, fishing, sailing and watersports markets in the U.S. announced it has entered into a definitive agreement to be acquired by L Catterton. L Catterton is the largest global consumer-focused private equity firm and has extensive experience building enthusiast brands. Terms of the transaction were not disclosed. Founded in 1968, West Marine operates 237 physical locations across 38 states and Puerto Rico and two eCommerce platforms reaching domestic, international and professional customers. West Marine is recognized as the leading resource for cruisers, sailors, anglers and watersports enthusiasts.
Apparel & Footwear
Stitch Fix founder to step down as chief executive
In a move that speaks volumes about its approach to growth, Stitch Fix on Tuesday announced that on Aug. 1, President Elizabeth Spaulding will become CEO, replacing founder Katrina Lake. Spaulding joined the company early last year from management consulting firm Bain & Co., where she was a partner. Her focus has been on growth, including inventory management, international expansion and developing “the next generation of consumer shopping experiences,” the company said. Lake will become the board’s executive chairperson, according to a company press release. She will also remain an employee, focusing “on Stitch Fix’s social impact efforts, in particular the intersection between sustainability and technology in apparel retail.” The choice of Spaulding to take over as CEO is hardly shocking. But it’s a stark reminder that Stitch Fix is a tech company whose aim is to sell clothes by solving consumer pain points, rather than by creating fashion.
Fast fashion faces steep declines in the next decade or sooner, UBS warns
As more consumers become aware of the environmental and human costs of apparel production, fewer will opt for fast fashion, widely seen as the most problematic sector in the industry, according to a report from investment firm UBS. Fast-fashion retailers could face revenue declines of 10% to 30% over the next five to 10 years, the analysts said in an emailed report. “The compounding effect of consumers buying fewer items but also shifting the purchases they do continue to make to items that they perceive to be more sustainable could be severe,” UBS Analyst Victoria Kalb’s team wrote. Apparel companies, including fast fashion, are increasingly addressing rising consumer concerns. H&M in particular is experimenting with textiles and releasing eco-minded collections.
Genesco activist looks to take over board, blasts acquisition strategy
Citing “chronic underperformance,” an activist investor is looking to replace the majority of Genesco’s board with seven directors of its choosing. In an 18-page letter, leaders of Legion Partners, which owns 5.6% of Genesco, questioned the company’s conglomerate structure, which in their view has resulted in “a string of poor acquisition decisions that has led to an increasingly bloated cost structure and corporate overhead.” Genesco said it would review the seven directors nominated by Legion Partners. In a statement, the company disagreed with many of Legion’s assertions while touting the company’s “footwear-focused strategy,” response to COVID-19 disruption and “highly engaged” board. Genesco operates close to 1,500 stores and owns a mix of footwear retail banners and brands, among them Journeys, Little Burgundy, Schuh and Johnston & Murphy. Until about two years ago, it owned hat-seller Lids, which the company sold to Ames Watson Capital in an effort to refocus around footwear.
TZP Group Acquires a Majority Stake in Kindred Bravely
TZP Group, a multi-strategy private equity firm, announced today that TZP Small Cap Partners II, L.P. has acquired a majority stake in Akerson Enterprises LLC d/b/a Kindred Bravely, a leading provider of maternity and nursing basics apparel. Launched in 2015 by Deeanne Akerson and Garret Akerson, Kindred Bravely is a digitally-native, direct-to-consumer brand focused on apparel for pregnant and nursing mothers. The Company’s products span multiple categories, including bras, loungewear, underwear, and sleepwear, amongst others. Built on the solid foundation of providing comfort and functionality that supports and encourages “her” on her motherhood journey, Kindred Bravely has developed a devoted customer base and has rapidly scaled over the last several years. “Kindred Bravely is an incredible brand with a loyal and growing customer base,” said Dan Gaspar, partner at TZP. “We are excited to partner with the Akersons and the Kindred Bravely team as the Company continues its rapid growth trajectory.”
Athletic & Sporting Goods
Exeter Capital to Partner with NOBULL
Exeter Capital, a Boston-based private equity firm with extensive experience investing in consumer-facing companies, announced today that it has partnered with NOBULL, a high growth athletic footwear, apparel and accessory brand. The transaction will support NOBULL’s growth strategy globally. NOBULL was founded in 2015 by Reebok veterans Marcus Wilson and Michael Schaeffer. The company sells its footwear, apparel, and accessories through its own website, permanent and pop-up stores, as well as at numerous events. NOBULL recently announced a multi-year partnership as the title sponsor of the CrossFit Games and as the Official Footwear and Apparel Brand of CrossFit.
G-Form announces acquisition by Eldridge
G-Form, a leader in advanced protective solutions, has announced that it has been acquired by Eldridge. Glen “Gava” Giovanucci, CEO of G-Form, said: “We are excited about our partnership with Eldridge and this next phase of growth for G-Form. Eldridge is widely known for its deep expertise in sports and media. We believe their ownership and support will provide new opportunities to expand our range of products, scale international distribution, enter new sports and non-sports industries, and increase production of our game-changing SmartFlex technology.” G-Form’s patented protective gear technology, SmartFlex, is created using advanced polymer formulas. All products are designed to allow athletes freedom of movement while minimizing risk of injury by hardening on impact. G-Form’s SmartFlex padding is made in the Company’s own factory in Rhode Island, and its products are currently distributed in more than forty countries.
Cosmetics & Pharmacy
Beautycounter is now a $1 billion brand following Carlyle Group investment
Despite Covid-19’s impacts on the beauty industry, the investment space is rebounding at a record pace. On Tuesday, private equity firm The Carlyle Group acquired a majority stake in clean beauty company Beautycounter, valuing it at $1 billion. This coincides with same-day investment news from hair loss brand Vegamour, and follows recent, notable investments and acquisitions like Pai skin care, Hand in Hand personal care brand, Harry’s and Conair. To date, Beautycounter has raised approximately $100 million in outside funding and was valued in 2018 at $400 million, according to Pitchbook data. It previously received funding from PE firm TPG, which is exiting its position following The Carlyle Group’s acquisition. Mousse Partnership also participated in the funding round, and previously invested in Beautycounter in 2018. Beautycounter intends to accelerate its plans to increase brand awareness and support the growth of its omnichannel business.
Honest IPO: 5 Truths From the Clean Beauty Brand’s Filing
Jessica Alba’s The Honest Co. has laid it all out, pulling back the curtain on the inner workings of the clean beauty company in its registration for an initial public offering. The unveiling was not unexpected. WWD reported in February that the company tapped Morgan Stanley, J.P. Morgan and Jefferies to work on the IPO and that it had already filed for an offering confidentially. The company was said to have considered an offering in 2016, but stayed private as it retooled and in 2018 took $200 million from consumer private equity giant L Catterton. Honest, which now has 191 employees, has long been under the microscope as one of the few celebrity-led businesses to really scale and an early mover in clean beauty. The brand also faced down a series of high-profile lawsuits claiming that some of its products, including its sunscreen, were ineffective and not natural. Those suits were settled with a $7.4 million fund and labeling changes. Now the filing has publicly revealed specifics on the company’s financials, structure and plan going forward.
Discounters & Department Stores
Walmart invests in autonomous vehicle startup Cruise
As speedy delivery continues to be a point of differentiation for retailers, Walmart has invested an undisclosed sum into Cruise, the San Francisco-based autonomous vehicle company, according to a Thursday announcement. Cruise’s business model, technology, zero emissions goal and “unmatched” driverless testing attracted the retailer to the startup, according to John Furner, president and CEO of Walmart U.S. The funding will help Walmart develop a last-mile delivery ecosystem that’s scalable, fast and low-cost. The investment is part of Walmart’s overall effort to integrate self-driving cars into its business, per the announcement, and comes after a pilot with Cruise that began in November last year.
Kohl’s shakes up board, pacifying activists
Kohl’s on Wednesday announced a settlement with a group of investors, Macellum Advisors, Ancora Holdings, Legion Partners Asset Management and 4010 Capital, which together own a 9.3% stake and had been agitating for board changes. Per the agreement, two independent directors nominated by the group, Margaret Jenkins and Thomas Kingsbury, will join at the close of Kohl’s upcoming annual shareholder meeting. Former Lululemon CEO Christine Day, an independent director “identified by Kohl’s, and agreed to by the Investor Group,” will also join then.
Macy’s Backstage opening 45 shop-in-shops
Macy’s has begun opening new Backstage locations, with plans for 45 shops within Macy’s stores in 10 states this year, on the way to its target of 270 nationwide. That’s 10 more than the department store had originally planned, according to a note emailed to Retail Dive. The company is also planning more stand-alone Backstage locations, Macy’s CEO Jeff Gennette said Wednesday during J.P. Morgan’s 7th Annual Retail Round-Up conference. Macy’s launched the off-price banner in 2015, as retailers in the segment consistently took market share from department stores.
Target tests new method to deliver packages faster
Target is trying out a faster delivery approach to win more consumer spending against speedier rivals. The retailer is using its newly opened sortation center in Minneapolis to trial a new Shipt delivery service feature that accelerates the last mile of delivery, according to a company press release on Thursday. John Mulligan, Target’s chief operating officer, told CNBC that the company intends to open five more sortation centers this year and utilize Shipt to carry out deliveries in them.
Dollar General to hire 20K new employees across its business
Dollar General plans to hire as many as 20,000 new staffers across its store, distribution, transportation and corporate operations, the discounter said in a press release Wednesday. That includes workers at all levels for its stores, from part-time sales associates to regional directors and district managers; staffers for its traditional and DG Fresh distribution centers; drivers for its private truck fleet; and staffers for its corporate store support center near Nashville, Tennessee.
Emerging Consumer Companies
Dental brand Tend raises $125 million Series C
Tend, the New York-based dental brand, announced that it had raised a $125 million Series C. The round was led by Addition, with participation from existing investors including GV, Juxtapose, Redpoint and Zigg Capital. Launched in October 2019, Tend currently operates six New York dental studios in Chelsea, Flatiron, Grand Central, Wall Street, Upper West Side and Williamsburg. In 2020, Tend launched a suite of dentist-designed consumer products for consumers.
Fitness platform Tempo raises $220 million Series C
Tempo, the San Francisco-based fitness platform, announced that it had raised a $220 million Series C. The investment was led by SoftBank with participation from Bling Capital, DCM, General Catalyst, Norwest Venture Partners and Steadfast Capital Ventures. The five-year-old company plans to use the raise to shore up its supply chain, keep up with increased consumer demand, and fund research and development. Tempo’s freestanding cabinet, which the company launched in February 2020, includes a 42-inch touchscreen with a 3D motion-tracking camera that consistently scans, tracks and coaches users as they work out. It currently sells three hardware bundles, starting at $2,495, that include accessories like barbells, dumbbells, a folding bench, a kettlebell system, a squat rack, a workout mat, a recovery foam roller and a heart rate monitor, depending on which bundle customers spring for. Users also pay a $39 monthly subscription to access on-demand and live classes.
Vegamour Announces $80 Million Minority Growth Investment by General Atlantic
Vegamour, a premium, direct-to-consumer, clean hair wellness brand, has announced $80M in funding from General Atlantic, a leading global growth equity firm. The Company will use the new funds to further its organic e-commerce growth, launch additional products and expand into new channels and geographies. Founded in 2016 by CEO Daniel Hodgdon, Vegamour is a plant-based hair wellness brand that incorporates a comprehensive range of naturally-derived products to support healthy hair growth and wellness. All of Vegamour’s products are clean, vegan and formulated with proprietary phytoactive ingredients clinically proven to help promote abundant and radiant-looking hair. VEGAMOUR has emerged as a differentiated solution from traditional hair care products, which are often formulated with potentially harmful and synthetic chemicals.
Grocery & Restaurants
Duck Donuts sold to NewSpring, Betsy Hamm promoted to CEO
Duck Donuts, a 102-unit doughnut chain based in Mechanicsburg, Pa., has been acquired by an affiliate of NewSpring Capital, a private equity firm based in Radner, Pa., and has promoted Betsy Hamm to CEO from chief operating officer, the chain said Tuesday. Russ DiGilio, who founded Duck Donuts in 2007 in the town of Duck, N.C., on the state’s Outer Banks, and started franchising in 2013, remains a “significant owner” of the concept and will be a member of the chain’s newly formed board of directors, according to a release announcing the sale, which said Hamm would “focus on building and protecting the franchise brand and providing best-in-class franchise support while driving company growth and profitability. She is responsible for strengthening company culture, ensuring operational efficiencies, and maximizing franchisee success.”
SunOpta acquires plant-based beverage brands from Hain Celestial
SunOpta Inc. has acquired the Dream and WestSoy brands from The Hain Celestial Group, Inc. for $33 million. The Dream brand is the No. 2 brand of shelf-stable, plant-based milks, originally launched in 1982. WestSoy is a branded shelf-stable soy beverage. SunOpta currently manufactures the entire WestSoy product portfolio, according to the company. SunOpta is primarily a private label and co-packing manufacturer, but the company also has its own brands. Sown, a line of organic oat milk creamers, was launched by the company after management identified white space in the oat milk category.
Beleaguered Chinese Coffee Retailer Luckin Announces Private Equity Investment of Up To $400M
Luckin Coffee has entered into an investment agreement with Centurium Capital and Joy Capital, two Chinese private equity investment firms, that could potentially fetch the coffee retailer up to $400 million in financing. Centurium, which is serving as the lead investor, has agreed to invest about $240 million in senior convertible preferred shares of Luckin through a private placement. Joy Capital will invest about $10 million in senior preferred shares. Both Centurium and Joy Capital, under certain circumstances, may upsize the investment on a pro rata basis for an additional $150 million, Luckin said. The closing of the transactions is contingent on a series of closing conditions, including a restructuring of $460 million of the company’s debt.
Home & Road
Bed Bath & Beyond in new effort to take lead in $180 billion home market
Bed Bath & Beyond is launching one of its biggest brand campaigns ever in a move to position itself as the leading authority in home goods. Store employees will be outfitted with uniforms as part of the initiative. The retailer’s new “Home, Happier” campaign, part of the chain’s strategy to reinvent its business around the customer, will be brought to life through its in-store and online customer experience and also through a marketing campaign aimed at inspiring customers to celebrate the important role that home plays in their lives. Bed Bath & Beyond said “Home, Happier” is focused on its belief that a home is “a feeling that is created by every moment, in every room. The integrated campaign will be anchored by TV spot that will begin airing nationally on April 14. It also features a suite of creative assets that includes national broadcast and cable TV, streaming online video, paid social, print, in-store, email and display.
Bed Bath & Beyond swings to Q4 profit; sales miss
Bed Bath & Beyond Inc. reported mixed fourth-quarter results as the ongoing store closures and the sale of its non-core banners — both key to its turnaround strategy — took a toll on its sales. The home goods chain reported net income of $9.1 million, or $0.8 per share, for the quarter ended Feb. 27, after a loss of $65.4 million, or 53 cents per share, in the year-ago period. Adjusted earnings of $0.40 topped analysts’ estimates of $0.31. Net sales fell 16% to $2.619 billion, missing estimates of $2.627 billion, driven by the sale of Christmas Tree Shops and Cost Plus World Markets and ongoing store closures, the company said. Excluding these impacts of approximately 12%, Bed Bath & Beyond said its core banner net sales decreased approximately 3%, primarily due to store closing activity. Comparable sales increased for the third consecutive quarter, with total enterprise comparable sales growth of 4%, led by digital growth of approximately 86%. Comparable store sales decreased 20%.
Lovesac Q4 profits grow by 66.4%
Net sales for Lovesac, the furniture company known for its Design for Life philosophy and for its Sactional adaptable sofas, grew by 40.7% in the fourth quarter and 37.4% for the full fiscal year. Gross profit dollars increased by 66.4% to $75.1 million for the fourth quarter of fiscal 2021 compared with $45.2 million in the fourth quarter of last year. Net income increased by 300.1% to $21.7 million for the fourth quarter of fiscal 2021 compared with $5.4 million in the prior-year period. This resulted in net earnings per share of $1.44 compared with net earnings per share of 37 cents in the fourth quarter of last year, an increase of 289.2%.
Ethan Allen: fiscal Q3 delivered sales up 18.2%
In a preview of its fiscal 2021 third-quarter results, vertically integrated manufacturer and retailer Ethan Allen Interiors reported net delivered sales of $177 million for the three months ended March 31, an 18.2% increase compared with the same prior-year period. The company will release full third-quarter financial and operating results after markets close on Thursday, April 29. Other highlights for Ethan Allen’s fiscal 2021 third quarter included: A record 51.8% increase in written orders for the retail segment compared with the prior-year quarter. A 39% increase in wholesale segment orders, and a 48% increase excluding General Service Administration and other government orders. Adjusted diluted earnings per share in the range of $0.56 to $0.58 compared with $0.02 in the prior-year quarter.
Mattress imports in 7 key countries slide 56% in February
Mattress imports continued their slide for the fourth consecutive month dropping 56% in February compared with the same month last year. Based on data from the U.S. International Trade Commission, total mattresses imported in the month dropped 504,000 units. Over the past four months, the time period impacted by seven countries involved in the antidumping case, mattress imports have dropped 1,810,000 units. Early last year, the U.S. industry filed a trade case against dumped and subsidized mattress imports from Cambodia, Indonesia, Malaysia, Serbia, Thailand, Turkey and Vietnam. Last month, the U.S. Department of Commerce announced its final duty rate determination in the mattress dumping case. The final determination on injury from the ITC will most likely be announced later this month or early May, and if the ITC votes affirmative, the duties will remain in place for at least five years. The case has had an impact on the number of mattresses brought into the U.S. since the Commerce Department announced preliminary duties in October, and the first month’s figures showed a 46% decline in November’s imported goods.
Jewelry & Luxury
Gucci tops the list of most popular luxury brands online, study says
In a year when a strong e-commerce presence was critical for brands, Luxe Digital found that Gucci searches comprised 15.2% of all search queries for luxury items, making it the most sought-after luxury brand online. Coming in second and third place were Chanel (11.6%) and Hermès (10.2%), per the report. Versace and Hermès have seen notable growth since last year. However, Balenciaga descended to number 12 on the list, which the report partially attributes to the decline in popularity of its sneakers. Luxe Digital predicts that China will become the largest luxury market in the world by 2025.
JBT: The Jewelry Industry Isn’t Really Shrinking Anymore
The Jewelers Board of Trade’s (JBT) roster of North American jewelry companies stayed relatively flat in the first quarter of 2021, a surprising turnaround after more than a decade of steep declines. JBT’s total listings in the first quarter of 2021 numbered 25,413, a 1.5% drop from the year before. To compare that figure to prior years, in 2020, JBT’s listings dropped 2.1%, and in 2019, they dropped 3.1%. The group’s tally includes 19,236 retailers, 3,693 wholesalers, and 2,484 manufacturers. JBT president Erich Jacobs says he’s pleasantly surprised by how good the numbers look.
Integrating Tiffany & Co. Is A “Challenge,” LVMH Says
LVMH has found integrating Tiffany & Co. a “challenge,” particularly with most of its employees still working from home, LVMH chief financial officer Jean-Jacques Guiony told analysts on an April 13 conference call. LMVH completed its purchase of Tiffany in January. “Integrating Tiffany is very important to us,” Guiony added, which means that LVMH is unlikely to consider future acquisitions in the near term. “We don’t want to dilute our efforts,” he continued. “[Tiffany is] a big acquisition for us [and] our number one priority.”
Blue Nile Adds Chief Operating Officer, Other Execs
Blue Nile has appointed Jason Moss as its new chief operating officer, one of a flurry of appointments the company just announced. Moss previously worked as digital marketing director for Amazon Web Services. Prior to that, Moss served as general manager and chief marketing officer for Avvo, the legal site, and vice president, general manager, for Expedia, the travel site. He joined Blue Nile in January, according to LinkedIn. The Seattle-based company has also appointed Ben Abitbol as senior vice president of supply chain.
Louis Vuitton joins China’s JD.com amid online luxury battle
Chinese e-commerce giant JD.com has won access to one of luxury’s most sought-after brands after inking a partnership with Louis Vuitton. The deal is a rare move for the French brand, which tops the Vogue Business Index luxury brand ranking, who traditionally prioritizes direct access via its own e-commerce sites. The deal is the brand’s first with a third-party e-commerce platform in China. Chinese consumers will be able to search for Louis Vuitton on the JD app, gaining access to a customized page dedicated to the brand under the new deal, a first for JD.com as it seeks to lure more luxury brands to the site more known for electronics than handbags. From there, by clicking on individual products, customers will be redirected to Louis Vuitton’s official WeChat mini program, where they will be able to conclude the transaction.
Office & Leisure
GameStop initiates search for new CEO – sources
GameStop Corp is looking for a new chief executive to replace George Sherman as it pivots from a brick-and-mortar video game retailer to an e-commerce firm, three people familiar with the matter said. It would be the biggest shakeup at GameStop since Ryan Cohen, the co-founder and former chief executive of online pet food company Chewy Inc, joined its board in January and began laying the groundwork for a shift in culture and strategy, people familiar with his work at GameStop said. Its stock is up almost 4,000% from a year ago, after it became the poster child of day traders betting on so-called meme stocks. GameStop’s board is working with an executive headhunter on the CEO search, said the sources, who requested anonymity because the matter is confidential. Several GameStop board directors are involved in the search and have spoken with potential candidates from the gaming industry, as well as the e-commerce and technology sectors, the sources said.
Sony invests another $200 million in Epic Games
Sony has just invested another $200 million in Epic Games as part of a $1 billion funding round, Epic announced today. Over a dozen investors contributed toward the funding round, which valued the Fortnite developer at $28.7 billion. That’s over $10 billion more than Epic Games’ estimated value at the time of Sony’s major investment last July. Epic Games CEO Tim Sweeney is still the company’s controlling shareholder after the investment. In a press release, Sweeney said that Epic will use the investment to “help accelerate our work around building connected social experiences in Fortnite, Rocket League and Fall Guys, while empowering game developers and creators with Unreal Engine, Epic Online Services and the Epic Games Store.” The funding round comes less than a year after Sony’s $250 million investment in Epic. Epic’s increase in valuation comes even as the company has spent hundreds of millions on free games and exclusives for the Epic Games Store. The figure recently emerged as part of its ongoing legal feud with Apple after the iPhone manufacturer kicked Fortnite off its App Store last year.
Incline Partners with Revival Animal Health
Incline Equity Partners, a Pittsburgh-based private equity firm, is pleased to announce that it has made an investment in Revival Animal Health, a leading value-added distributor of pet health products. Headquartered in Orange City, IA, Revival offers a broad product assortment that includes pet vaccines, reproductive health aids, supplements and prescription medications. The Company primarily sells its products via its eCommerce website and serves an expansive customer base of breeders, animal shelters, veterinarians and other pet health professionals. “Revival sells predominantly consumable products to a diverse, loyal customer base,” said Victor Martinelli, Principal at Incline.
Regal Cinemas to re-open 500 locations this spring
After six months of closed theaters and an operating loss $2 billion, Regal Cinemas will be reopening some 500 theaters beginning this month. Attendance will be capped at between 25% and 50% of capacity, depending upon location. The next largest chain in America after AMC, Regal operates 7,211 locations in 42 states. After the outbreak of the pandemic, Warner Bros. announced it would release all its 2021 films simultaneously in theaters and on HBO. Regal’s owner, Cineworld, made an agreement to abide by Warner’s earlier pledge and will therefore be opening theaters and showing Warner Bros. pictures. Cineworld announced that it had secured new liquidity in the form of a $213 million convertible bond and that it expected a $200 million US Cares Act tax refund. Also expected is strong pent-up demand for affordable out-of-home entertainment.
Technology & Internet
How Amazon fought the union drive in Alabama
Amazon last week soundly defeated a union drive at one of its Alabama warehouses, a major win for the e-commerce giant that has long fought unionization attempts at its facilities. Workers at the Bessemer, Alabama, warehouse voted overwhelmingly in favor of rejecting unionization, with fewer than 30% of the votes tallied in favor. The Retail, Wholesale and Department Store Union, which led the union drive, intends to challenge the outcome, arguing that Amazon broke the law with some of its anti-union activity before and during voting. The outcome delivers a setback to organized labor, which had hoped the Bessemer election would help establish a foothold at Amazon. But unions, worker advocates, and some employees at the Bessemer facility, known as BHM1, said they believe that the Bessemer election will fuel further organizing attempts at other warehouses across the country. Labor leaders say the Bessemer election also revealed to the general public the lengths to which employers will go to prevent unions.
Website maker Squarespace files to go public on NYSE
Squarespace, which makes software for people to build websites, on Friday filed to go public on the New York Stock Exchange under the symbol “SQSP.” The company is eschewing a traditional initial public offering, where it would issue new shares to institutional investors to raise new capital, and is instead using a direct listing, where it sells existing shares on the public market to let earlier investors and employees get liquidity. The company reported $621.1 million in revenue in 2020, with revenue growing 28% year over year. Squarespace wants to grow its business by signing up new customers and getting existing clients to use more of its services, including tools for selling products online. Squarespace had more than 3.6 million subscriptions at the end of the year, up about 23%. Rather than going after big enterprises, Squarespace focuses on self-employed people and small businesses.
Finance & Economy
Retail sales explode in March as consumers use stimulus checks to spend heavily
A fresh batch of stimulus checks sent consumer purchases surging in March as the U.S. economy continued to get juice from aggressive congressional spending. Advance retail sales rose 9.8% for the month, the Commerce Department reported. That compared to the Dow Jones estimate of a 6.1% gain and a decline of 2.7% in February. Sporting goods, clothing and food and beverage led the gains in spending and contributed to the best month for retail since the May 2020 gain of 18.3%, which came after the first round of stimulus checks.
U.S consumer prices surge in March, CPI finds, pushing inflation to 2 1/2-year high
Consumer prices rose in March for the fourth month in a row and the pace of inflation hit the highest level in two and a half years, underscoring new pressures emerging on the economy as the U.S. recovers from the coronavirus pandemic. Oil prices are on the rise because of production cutbacks by energy companies and higher consumer demand as Americans get back on the road or take to the skies again. The cost of gasoline jumped again and accounted for almost half of the increase in the cost of living last month. Gas prices leaped 9.1%. The cost of food edged up a scant 0.1%, but prices are expected to rise somewhat faster in the coming months, particularly for takeout and meals prepared outside the home.
