Apparel & Footwear

Canada’s Gildan announces board changes for growth era

Gildan Activewear Inc. announced a refreshed Board of Directors that has been thoughtfully constructed based on extensive shareholder engagement. The new Board will guide the Company’s next phase of growth under the leadership of President and Chief Executive Officer Vince Tyra and ensure the previously announced sale process is conducted in a manner that will benefit all shareholders of Gildan. The Board decided that near-term board refreshment was in the best interests of Gildan. To facilitate a smooth transition process at this important junction, the new directors have been recent observers to the Board.

Lululemon to Close Washington Warehouse, Cut 100 Employees

Lululemon plans to shutter its Washington State distribution center and axe more than 100 employees, the athleisure purveyor confirmed. The Vancouver-based firm filed a Worker Adjustment and Retraining Notification with the state’s employment security department, informing officials of the closure of its Sumner warehouse, 35 miles south of Seattle. Layoffs will begin on June 21, the WARN notice said, though the center itself will remain open until the end of the year. “As we continue to deliver on our growth strategy to meet the needs of our guests, we regularly evaluate our distribution network to help shape and support the future vision of our business,” a spokesperson for the Team Canada outfitter said.

Skechers Hits Record High With Q1 Revenues of $2.25B

Skechers continued its earnings winning streak, posting record sales in the first quarter of 2024. The Manhattan Beach, Calif.-based footwear company reported Q1 net sales of $2.25 billion, up 12.5 percent from $2.0 billion the same period last year. Net earnings were $206.6 million and diluted earnings per share were $1.33 compared with prior year net earnings of $160.4 million and diluted earnings per share of $1.02. Shares were up nearly 8 percent in after-market trading on April 25th. Skechers noted that its international business drove revenue growth in the quarter, with sales in the segment up 15.2 percent in Q1. Domestic net sales returned to growth, up 7.8 percent in the period. For the quarter, international sales represented 65 percent of total sales, the company noted.

Mango expands US retail footprint, unveils new stores in Washington DC and Boston

European fashion brand Mango has opened two new stores in Washington D.C. and Boston, as part of expansion plans on the East Coast. In the heart of the Capitol Region, Mango has set up shop in Westfield Montgomery, the premier mall in Rockville, Potomac, and Bethesda area. The company plans to unveil three additional stores in the region, strategically positioned at 950 F Street, Tysons Corner Center, and Pentagon City, catering to diverse shopper demographics. Simultaneously, Mango has made its grand entrance into the Boston market with a flagship store in the Natick Mall, the largest shopping destination in Massachusetts. Mango will equally open two additional stores in the region in 2024.

 

Athletic & Sporting Goods

JD Sports acquiring Birmingham-based Hibbett in $1.1 billion deal

Birmingham-based sports retailer Hibbett is being acquired by U.K.-based JD Sports in a deal totaling $1.08 billion.  The Wall Street Journal is reporting the deal will create a company with combined revenue of $5.80 billion.  The U.K. company said its acquisition of Hibbett accelerates its growth plans in the U.S., and particularly, the South.  Hibbett, a company with more than 75 years history, has 1,169 stores in 36 states across the U.S.  The company generated net sales of $1.73 billion in 2023.  Hibbett President and CEO Michael Longo, and Executive Vice President of Merchandising Jared S. Briskin will continue with the company. Longo came to Hibbett in 2019 when it acquired Memphis-based City Gear, where Longo was CEO.

Vista Outdoor Re-Engages with MNC Capital on Potential Buy-Out Interest

Vista Outdoor Inc. has confirmed it is re-engaging in discussions with MNC Capital related to its March 25, 2024 unsolicited indication of interest pursuant to which MNC expressed interest in acquiring Vista Outdoor in an all-cash transaction for $37.50 per Vista share, or approximately $3.0 billion.  Vista has reportedly advised MNC it expects MNC to deliver an improved economic proposal following the company providing MNC with access to certain diligence information as permitted in accordance with the terms of the existing merger agreement with Czechoslovak Group a.s. (CSG) and Vista’s ammo business under its Sporting Products division.  The Revelyst business is the new name Vista is using for its Outdoor Products segment, which includes the Fox, Bell, Giro, CamelBak, Camp Chef, Bushnell, Simms Fishing, Foresight Sports and Bushnell Golf brands.

Alterra Mountain Co. Completes Acquisition of BC Heli Ski Operation

Alterra Mountain Company reported that it closed on the purchase of Mike Wiegele Helicopter Skiing (MWHS) in Blue River, BC, Canada, further expanding the company’s heli-skiing portfolio, complementing CMH Heli-Skiing & Summer Adventures.  Established in 1970, MWHS is located in the Cariboo, Monashee and Rocky Mountains ranges. This area of British Columbia is known for its “reliable” powder snow.  Alterra Mountain Company owns and operates Steamboat and Winter Park in Colorado; Palisades Tahoe, Mammoth Mountain, June Mountain, Big Bear Mountain Resort and Snow Valley in California; Stratton Mountain and Sugarbush Resort in Vermont, among others.

Cosmetics & Pharmacy

L Catterton acquires majority stake in Italian makeup brand Kiko Milano

LVMH-backed investment firm L Catterton announced that it has entered a definitive agreement to acquire a majority stake in the Italian beauty brand Kiko Milano. Terms of the transaction were not disclosed. “L Catterton (…) will accelerate Kiko’s global expansion, leveraging their extensive expertise in the cosmetics sector and a global network of commercial opportunities and talent,” said Antonio Percassi, who co-founded the brand. The Percassi family will retain a significant stake in the company and Antonio Percassi will retain the position of President of Kiko Milano, added L Catterton in a statement. Mentioning sources close to the matter, Italian newspaper ‘Il Sole 24 Ore’ estimated the value of Kiko Milano at around EUR 1.4 billion (USD 1.5 billion).

Clio Cosmetics Bolsters Japanese Market Presence With Strategic Acquisitions

South Korea’s Clio Cosmetics Co. has significantly expanded its foothold in the Japanese beauty market by acquiring 100% stakes in Japanese cosmetics distributor Doowon and import agency Kiwami for 8.3 billion won (US$6 million). Doowon has been an instrumental partner for Clio, distributing its vibrant color cosmetics, including the popular Peripera brand, in Japan since 2013. This acquisition marks a strategic move by Clio to establish a direct subsidiary in Japan, aiming to consolidate its market operations and drive sales growth. The integration is expected to streamline business processes and enhance overall profitability in the competitive Japanese market.

Nuance Medical Completes Acquisition of BIOCORNEUM Scar Treatment Brand, to Become a Part of the Biodermis Portfolio

Nuance Medical, a leading designer, developer, and marketer of branded and private label medical products, announced the successful acquisition of BIOCORNEUM, a state-of-the-art silicone gel scar treatment brand, previously owned by Sientra. Effective immediately, BIOCORNEUM will become a part of the Biodermis portfolio, Nuance Medical’s brand specializing in silicone scar management products. This strategic move enhances Biodermis’ commitment to providing top-tier skin care solutions to healthcare professionals. Recognized for over 30 years of innovation and effectiveness in scar management, Biodermis has been at the forefront of medical-grade silicone treatments for over three decades. Known for its dedication to quality and innovation, Biodermis is a trusted name among healthcare providers for effective, non-invasive scar management solutions.

Walgreens Broadens Specialty Pharmacy Services for Cell and Gene Therapies

Walgreens revealed its plans to collaborate directly with drug manufacturers to provide cell and gene therapies to patients in the U.S. as part of its strategy to enhance its pharmacy services. The company said it is launching a new business unit specifically for its pharmacy sector, integrating the specialty pharmacy subsidiary AllianceRx. This unit will operate as part of its main U.S. retail pharmacy division. At the same time, Shields Health Solutions, which backs health system-owned specialty pharmacies, will continue within Walgreens’s U.S. healthcare division. Specialty pharmacies have become a dominant player in the U.S. healthcare system, particularly as chronic diseases have increasingly become more common.

 

Discounters & Department Stores

Saks seeks to carve out luxury niche in retail media with network launch

Saks has launched a retail media network, which it claims is among the first to come from the luxury category, according to a press release. The Saks Media Networks draws on the online retailer’s first-party shopper data and insights from 435 million annual website visits. The offering will initially focus on sponsored product and on-site display ads. An in-house media team will manage advertiser relationships, helping partners reach campaign goals and track performance and reporting. The rollout follows an infusion of cash into Saks earlier this month.

Walmart removes self-checkout from two more stores

Walmart said it has removed self-checkout lanes at two additional stores — one in Shrewsbury, Mo., and another in Cleveland. “As part of our announced plans for additional investments and improvements to facilities across the country, we’ve decided to remove self-checkout lanes and replace them with staffed lanes at select locations,” Brian K. Little, a spokesperson for Walmart, told Supermarket News. The decision was based on several factors, including feedback from employees and customers, shopping patterns, and business needs in the area, he said. “We believe the changes will improve the in-store shopping experience and give our associates the chance to provide more personalized and efficient service,” Little said. Last year Walmart said it had removed self-checkout from three stores in Albuquerque.

Target store introduces a new ‘over 18’ policy

Large stores like Target and Walmart have been hit particularly hard by inventory shrink, with some CEOs calling the levels of it unsustainable for business and profitability. This forced Target in March to limit self-checkout to customers with 10 items or fewer during normal business operations. And a Target location in the Columbia Heights neighborhood of Washington is now implementing a stricter policy, mandating that anybody under age 18 must be accompanied by an adult to enter the store. Some cities like Washington have seen an uptick in juvenile crime, especially when it comes to attempted robbery, carjacking and petty theft.

 

Emerging Consumer Companies

Snack manufacturer Wilde Brands raises $20 Million in funding to accelerate growth and innovation

Wilde Brands, the snack manufacturer, has secured $20 million in funding to accelerate its growth and foster innovation. KarpReilly spearheaded the funding round with additional investments from American musicians Jack Harlow and MGK, along with The Family Fund, Grey Space Group, and other existing strategic investors.  The investment will enable Wilde to capitalize on its achievements, expanding its retail footprint, amplifying marketing initiatives, and nurturing innovation as it aims to double its business in 2024.

 

Sunnie Secures Strategic Investment to Expand New Distribution Channels

Sunnie, a brand dedicated to creating nutritious, well-balanced snacks, recently secured a strategic investment from SWAT Equity Partners to expand its distribution channels. Founded by Katy Tucker and Lisette Howard, Sunnie focuses on offering real, minimally processed snacks suitable for both kids and adults. Their product range emphasizes clean labels and uses whole, real ingredients, which has distinguished them in the snack market. This new partnership aims to widen Sunnie’s reach, helping more families access healthier snack options.

ShipBob plans IPO with $4B valuation, expansion ahead.

E-commerce fulfillment startup, ShipBob, is reportedly planning to launch an Initial Public Offering (IPO) with a valuation of $4 billion. The Chicago-based company, which provides small and medium-sized businesses with Amazon-like delivery capabilities, has experienced significant growth as the pandemic has accelerated the shift to online shopping. ShipBob offers a full-stack fulfillment solution, including inventory management, warehousing, and fast shipping, enabling businesses to compete in the e-commerce market. The company has raised over $200 million in funding to date, with investors including Menlo Ventures, Bain Capital Ventures, Hyde Park Venture Partners, and SoftBank. The potential IPO comes as the e-commerce sector continues to thrive, with many businesses seeking to enhance their online presence and delivery capabilities. The funds raised from the IPO would likely be used to further expand ShipBob’s services and reach.

 

 

Food & Beverage

Grupo Bimbo finalizes four ‘bolt-on’ acquisitions

Grupo Bimbo SAB de CV completed four “bolt-on” acquisitions during the first quarter, expanding its global presence to 35 countries, said Daniel Servitje, chief executive officer and chairman of Grupo Bimbo. Servitje briefly touched on the acquisitions during an April 22 conference call with analysts to discuss first-quarter financial results. In Tunisia, Bimbo acquired Moulin d’Or, the leading producer of sweet baked foods. The company’s products include individual cakes, family-size cakes, pastries, cookies, bread, tarts and tartlets. Servitje said the acquisition is Bimbo’s first in Tunisia.

FX Matt Expands Portfolio with Strategic Acquisition of ‘Merican Mule Canned Cocktails

The FX Matt (Saranac) Brewery, in Utica, NY, a renowned leader in the brewing industry, has announced the acquisition of ‘Merican Mule, a pioneering spirits-based ready-to-drink cocktail company that cans Moscow Mule cocktails. This acquisition marks another significant milestone in FX Matt’s ongoing expansion in the burgeoning ready-to-drink cocktail market. The addition of ‘Merican Mule to FX Matt’s portfolio underscores the company’s strategic vision to broaden its reach in high-growth, emerging channels and reinforces its position as a legacy brand looking to drive innovation in new ways.  Transaction details were not disclosed.

Hydrox planning antitrust lawsuit against Oreo parent Mondelēz

The cookie is crumbling in the competitive $9 billion category. Hydrox owner Leaf Brands plans to sue snacking heavyweight Mondelēz International this year for violating antitrust laws. The company and its CEO Ellia Kassoff claim the Oreo manufacturer is intimidating retailers and instructing workers who restock its creme-filled chocolate cookies in stores to hide, misplace or move Hydrox to less desirable locations. “I’m going to be pursuing a lawsuit against them,” Kassoff said in an interview. “Mondelēz doesn’t want to lose even a penny, even one little market share because it could be a sliding scale. Rarely do we lose a taste test between Oreo [and Hydrox] and I think that’s what scares them.”

Plant-based food sales fall to $8.1B as consumers demand lower prices and higher quality

Plant-based meat and seafood sales declined in 2023 for the second year in a row, according to the Good Food Institute’s State of the Industry report. Retail plant-based food dollar sales were $8.1 billion in 2023, a slight decline from $8.2 billion in 2022, indicating that plant-based foods are still falling short on consumer expectations of taste, texture and affordability. The plant-based meat and seafood sector has responded to declining demand by targeting a wider net of consumers, specifically those who follow an omnivore diet, the report said. Ninety-five percent of plant-based meat and seafood eaters also reported eating conventional meat, the report said, making up a significant chunk of market share. Leading plant-based companies are promoting their products as better-for-you and the environment, rather than simply as “plant-based” so as not to discourage potential customers.

 

 

Grocery & Restaurants

Blackstone to buy Tropical Smoothie Cafe in $2B deal

Blackstone Inc., the New York City-based private-equity company, has agreed to buy restaurant chain Tropical Smoothie Cafe for a reported $2 billion, including debt, the companies announced late Wednesday. Blackstone said the deal for Atlanta-based fast-casual Tropical Smoothie Café LLC would be “the first transaction from Blackstone’s most recent vintage of its flagship private-equity vehicle.” Terms of the transaction were not disclosed, but sources told the Wall Street Journal it was “about $2 billion, including debt.” Tropical Smoothie Cafe was founded in Destin, Fla., in 1997, and has grown to more than 1,400 locations in 44 states. It added 175 new restaurants in 2023, with 70% of those from existing franchisees, Blackstone said.

Red Lobster seeks a buyer as it looks to avoid bankruptcy filing

Beleaguered seafood chain Red Lobster is seeking a buyer as it looks to avoid filing for bankruptcy, CNBC has learned. The company has considered filing for bankruptcy to help it restructure its debt and get out of a number of costly and lengthy leases, but it’s also sought a buyer in recent months, people familiar with the matter told CNBC. At least one firm had been interested in buying the chain, but a deal never came to fruition. It’s unclear how the chain will ultimately resolve its financial woes. Red Lobster could secure a buyer, it could declare bankruptcy or its lenders could take control of the company. Even if Red Lobster finds a buyer, it would be hard for it to avoid filing for Chapter 11 as it is trying to get out of many leases and those contracts can be difficult to break outside of bankruptcy, the people said.

Kroger adds 166 stores to divestiture plan for Albertsons merger deal

Kroger has updated its proposed plan to divest hundreds of stores to C&S Wholesale Grocers in an effort to appease federal regulators who have sued to block the grocer’s $24.6 billion merger with Albertsons. Kroger’s new plan adds 166 more stores to the original divestiture proposal, bringing the total number of divested stores to 579. That includes selling banners QFC, Mariano’s, and Carrs, which were included in the original divestiture plan, and adding the Haggen banner. In a press release, Kroger said that if the deal is approved, stores under the aforementioned banners that Kroger and Albertsons retain will rebrand as either Kroger or Albertsons. Kroger said that under the proposed deal, C&S will license the Safeway banner in Arizona and Colorado. Likewise, it will license the Albertsons banner in California and Wyoming. Kroger will also re-banner the Albertsons and Safeway banners it retains in those states, and it will maintain the banners for those in the remaining states.

Home & Road

KPS sells King Koil to division of Hillhouse Investment Management

The Malaysian parent company of King Koil KPS Berhad has sold its stake in the U.S. bedding brand to AI Dream, a division of Hillhouse Investment Management. AI Dream is a licensing company that controls the King Koil, Serta and Ruf Betten brands in Asia and parts of Europe. Founded in 2018, the company’s product offering includes mattresses, bed frames, smart beds and customized bedroom solutions. Hillhouse acquired the company in 2021. The company said the acquisition will help accelerate King Koil’s U.S. growth and will give AI Dream expansion opportunities beyond Asia. According to a statement, King Koil’s current management will remain in place, and King Koil will retain its name. AI Dream operates 2,300 branded stores in more than 600 cities.

High-end appliance retailer Pirch to liquidate in bankruptcy

High-end home appliance showroom company Pirch filed for Chapter 7 bankruptcy Friday, which signals its disappearance from the landscape after years of struggle. The company, which was backed by private equity firm L Catterton for seven years, has assets between $10 million and $50 million, overshadowed by liabilities of between $100 million and $500 million, according to court documents filed with the U.S. Bankruptcy Court for the Southern District of California. “We sold our equity interest in Pirch in 2020 and have no involvement in the management of its affairs today,” an L Catterton spokesperson said by email. Pirch said that as of March 20, it was “temporarily closing” all its showrooms, describing that as “a pause of business to give management the opportunity to complete a go-forward plan” and saying it is “navigating through various options,” according to a notice on its website still displayed as of press time. However, a Chapter 7 bankruptcy entails liquidation.

Home Depot gets early jump on Halloween — online

The Home Depot’s latest promotional blockbuster targets shoppers who are already planning for a holiday that’s more than six months away. It’s not even summer, but customers looking to get a jump on shopping for themed merchandise for Halloween will be interested in an upcoming online campaign at Home Depot. “For superfans, Halloween is a yearlong journey to find the absolute best décor for the month of October, which is why The Home Depot is thrilled to offer fan-favorites and new innovations earlier than ever,” a Home Depot spokesperson said in an email to Chain Store Age. Starting Thursday, April 25, the home improvement giant is running an online-only sales promotion called “Halfway to Halloween.” Products associated with the holiday, such as a seven-foot-tall animated LED Frankenstein’s Monster decoration (inspired by Universal’s Classic Monster), are available online while supplies last, with more Halloween products slated to be put on sale throughout the year.

Slack demand results in 6th consecutive quarter of sales declines at Ethan Allen

Retail outperformed wholesale during Top 100 retailer Ethan Allen’s third quarter, but both fell by double digits. Retail segment writer orders declined 8.6%, and retail net sales decreased 18.8% to $122.6 million. On the wholesale side of the business, written orders dropped 14.6%, and net sales tumbled 21.3% to $89.8 million. Consolidated net sales rang in at $146.4 million, decreasing 20.1%. The company pointed to soft post-pandemic demand. Ellen Allen last generated a quarterly sales increase in the period ended Sept. 30, 2022. The company last generated positive quarterly net income in the period ended Dec. 31, 2022. During the recent Q3, which ended March 31, it continued to chip away at overhead. Inventory carrying levels were lowered by 4.7%; inventory totaled $144.5 million at the end of the quarter. The company ended the period with a total employee count of 3,448, down 9.6% from a year ago and 32.7% less than March 31, 2019.

Sherwin-Williams sees dip in Q1 net sales, rise in net income and EPS

Paint and coating powerhouse Sherwin-Williams saw a dip in its consolidated net sales for the first quarter ended March 31, but net income and earnings per share rose year-over-year. Consolidated net sales decreased 1.4% in the quarter to $5.37 billion, down from $5.44 billion in the 2023 quarter. Net sales from those stores in the Paint Stores Group open more than 12 calendar months were approximately flat for the period, edging up 0.5% to $2.87 billion for the period. Earnings before interest, taxes, depreciation and amortization (EBITDA) in the quarter rose 2% to $896.2 million, or 16.7% of net sales. Diluted net income per share increased 7.1% to $1.97 per share in the quarter compared with $1.84 per share in the first quarter 2023.

Jewelry & Luxury

Kering shares sink 9% after profit warning on declining Gucci sales

Shares of French luxury group Kering sank more than 9% at open on Wednesday, after the company warned it expects a sharp downturn in first-half profits as a result of waning demand for its Gucci brand. The group on Tuesday said it anticipates a decline of 40% to 45% in first-half operating income, compared with the same period in 2023, as it struggles to retain share of the pocket in the increasingly discerning luxury market. The stock pared losses slightly to trade down by 7.8% by 9:15 a.m. London time. Kering Chairman and CEO François-Henri Pinault on Tuesday said the warning comes after the company’s performance “worsened considerably” in the first quarter. “While we had anticipated a challenging start to the year, sluggish market conditions, notably in China, and the strategic repositioning of certain of our Houses, starting with Gucci, exacerbated downward pressures on our topline,” Pinault said in a statement.

Designer brands owed millions after Matchesfashion collapse

Designer brands including Gucci and Anya Hindmarch have been left millions of pounds out of pocket and some customers will not get refunds after online fashion site Matchesfashion collapsed owing more than £210m last month. Customers who bought designer items prior to the administration are not able to return items or get a refund, according to a report by administrators published on Wednesday. Matches, founded in 1987 as a boutique in the London suburb of Wimbledon by husband and wife Tom and Ruth Chapman, collapsed on 8 March after it was hit by widespread discounting and softening demand for luxury fashion. Matches was acquired by Mike Ashley’s Frasers in late 2023 for £52m in cash from the private equity firm Apax Partners. Frasers put in £33m to keep it trading. However, after a difficult Christmas, Frasers said it was unwilling to provide further funds and called in administrators from Teneo.

 

Citibank Sees Gold Hitting $3,000 an Ounce

Citibank analysts have predicted that gold will pass $2,500 an ounce in the second half of the year and hit $3,000 an ounce within the next six to 18 months. The forecast comes as the yellow metal’s spot price recently notched an all-time high of $2,431. Citibank analysts see the price of gold heading higher later this year; if the Federal Reserve begins another cycle of trimming interest rates, they said, it could be the “bullish kicker” that propels gold to $3,000. For now, according to the Citibank report, “the bullion complex has decoupled from U.S. rates and the U.S. dollar, suggesting robust physical consumption drivers (e.g., India/China imports, bar/coin), [alternative and fiat currency] demand, geopolitical hedging, and central bank buying are supporting the market.”

 

Office & Leisure

Airlines required to refund passengers for canceled, delayed flights

Good news for airline travelers: the Department of Transportation announced it is rolling out new rules that will require airlines to automatically give cash refunds to passengers for canceled and significantly delayed flights. “This is a big day for America’s flying public,” said Transportation Secretary Pete Buttigieg at a recent news conference. Buttigieg said the new rules — which require prompt refunds — are the biggest expansion of passenger rights in the department’s history. Airlines can no longer decide how long a delay must be before a refund is issued. Under the new DOT rules, the delays covered would be more than three hours for domestic flights and more than six hours for international flights, the agency said.

 

Hasbro focuses on ‘high-profit partnerships’ to drive recovery as sales fall 24%

Hasbro Inc.’s first-quarter revenue fell 24% to $757.3 million, down from about $1 billion last year. The company attributed the difference largely to selling its eOne film and TV business. Excluding eOne, revenue was down 9%, the company said. By segment, Wizards of the Coast and digital gaming revenue rose 7%. Revenue for Hasbro’s consumer products fell 21% in Q1 due to industry trends and fewer closeout sales. Entertainment fell 85% with the sale of eOne; excluding that, Hasbro said revenue for the segment grew 65% thanks to Peppa Pig-related content. Operating profit for the quarter was $116.2 million, up more than 500% from last year, while adjusted operating profit was $148.6 million. Hasbro swung from a year-over-year net loss of $22 million to net earnings of $59 million for the first quarter.

Joann to exit bankruptcy ‘in the coming days’ as reorganization plan gets court OK

Joann expects to complete its financial restructuring and emerge from bankruptcy “in the coming days,” the craft and sewing retailer said in a recent announcement. Upon exiting bankruptcy, Joann will be a privately held company owned by its creditors. Under the plan approved by U.S. Bankruptcy Court Judge Craig Goldblatt in Delaware, Joann’s creditors agreed to cancel nearly $505 million of the company’s nearly $1.1 billion in long-term debt. After filing for Chapter 11 on March 18, Joann says it kept all of its 815 stores open and retained the jobs of its more than 18,000 employees during bankruptcy with a $132 million commitment from its financial stakeholders.

Toys”R”Us partners to expand in U.K.

The parent company of Toys”R”Us continues its mission to expand the footprint of the toy retailer. WHP Global has signed a long-term license agreement with WHSmith as the exclusive shop-in-shop partner for Toys”R”Us in the United Kingdom. Under the terms of the agreement, WHSmith will have the exclusive license for Toys”R”Us shop-in-shops in their High Street stores, including the opening of 30 new shops this summer. The deal follows the successful launch of Toys”R”Us shop-in-shops in select WHSmith stores last year. Since its acquisition by WHP in March 2021, Toys“R”Us has increased its global retail footprint with openings in the U.K. Kingdom, India, Dubai and Mexico. The brand marked its return in the U.S. in late 2021, opening a flagship at American Dream, East Rutherford, N.J., followed by the launch of 452 in-store shops at Macy’s stores nationwide in 2022.

Technology & Internet

U.S. bans TikTok unless it is sold

President Biden on Wednesday signed a law that would ban Chinese-owned TikTok unless it is sold within a year. It is the most serious threat yet to the video-streaming app’s future in the U.S., intensifying America’s tech war with China. Still, the law is not expected to cause any immediate disruption to TikTok, as a forthcoming legal challenge, and various hurdles to selling the app, will most likely cause months of delay. The law stipulates that ByteDance must sell its stake in TikTok in 12 months under the threat of being shut down. The move is the culmination of Washington turning the screws on TikTok for years. Chinese tech giant ByteDance, in 2017, purchased the popular karaoke app Musical.ly and relaunched the service as TikTok. Since then, the app has been under the microscope of national security officials in Washington fearing possible influence by the Chinese government.

Meta stock down on weak revenue forecast and comments on spending

Meta shares tumbled 10% on Thursday, their worst day since October 2022, after the company issued weak revenue guidance that overshadowed its first-quarter earnings beat. The stock closed at $441.38, wiping out roughly $132 billion in market cap from Wednesday’s $493.50 closing price before earnings. The company reported $4.71 in earnings per share on $36.46 billion in revenue for the quarter, exceeding the $4.32 in expected earnings per share and $36.16 billion in expected sales, according to LSEG. The stock sell-off gained pace in extended trading on Wednesday after CEO Mark Zuckerberg discussed spending in areas such as artificial intelligence and mixed reality that are not currently profitable.

 

Finance & Economy

GDP increased at a 1.6% rate in the first quarter, less than expected

U.S. economic growth was much weaker than expected to start the year and prices rose at a faster pace, the Commerce Department reported.  Gross domestic product, a broad measure of goods and services produced in the January-through-March period, increased at a 1.6% annualized pace when adjusted for seasonality and inflation, according to the department’s Bureau of Economic Analysis.  Economists surveyed by Dow Jones had been looking for an increase of 2.4% following a 3.4% gain in the fourth quarter of 2023 and 4.9% in the previous period.  Consumer spending increased 2.5% in the period, down from a 3.3% gain in the fourth quarter. Fixed investment and government spending at the state and local level helped keep GDP positive on the quarter, while a decline in private inventory investment and an increase in imports subtracted.

Visa results beat estimates on resilient consumer spending

Visa’s second-quarter results sailed past Wall Street estimates, as consumers shrugged off worries of a slowing economy to swipe cards on everything from travel to dining out, sending its shares up 2.7% after the bell. U.S. consumer spending has remained remarkably resilient despite higher-for-longer interest rates, with Americans still looking to spend on big-ticket purchases and international travel.  Visa executives in a call with analysts said international travel continues to be healthy, particularly out of the key markets of the U.S. and Europe, but flagged that Asia-Pacific travel has been weak as the post-pandemic recovery continues to be slower than expected.