The Weekly Consensus

Second Act Beauty Founders Using Lessons Learned

Tara Foley

With Q1 global venture capital investment down 53% y/y (according to Crunchbase), it’s encouraging to see the beauty category, which gets much of its innovation and newness from early-stage companies, continue to grow. Just last week, Circana (formerly NPD) reported that U.S. prestige beauty grew 16% y/y in Q1 and mass beauty grew 10% y/y.  Color cosmetics fared the best of all categories, up 24% in prestige and 15% in mass. How is the category growing and making the most of its recently reduced funding? At least part of the answer is that many current early-stage beauty companies are helmed by second-time founders and executives from the 1990’s and early 2000’s who are deftly leveraging their past experiences.

There are a number of examples of these second act founders helping to fuel dynamism and growth in beauty. To name a few:  Bobbi Brown (who sold her first line to Estee Lauder in 1995) has a new color line, Jones Road;  Wende Zomnir (whose brand Urban Decay was sold to LVMH in 2000 and again to L’Oreal in 2012) is following suit with Caliray – another new color line;  the founders of Fresh (who also sold to LVMH in 2000) are leaning into fragrance this time around with their brand The Maker;  Nyakio Grieco (who sold her eponymous skincare line to Unilever, via Sundial, in 2017) is back with the inclusive beauty-focused Thirteen Lune;  Marcia Kilgore (who sold her spa brand Bliss to LVMH in 1999) is now growing Beautypie. The list goes on.

One way second time founders are excelling in this environment is by using past experiences to grow their businesses efficiently and profitably. This approach is especially important given the current downturn in venture funding and investors’ heightened focus on profitability versus prior economic cycles. On a related note, some returning founders have the benefit of a certain measure of personal wealth from their first endeavors to help fund their second.

Another way second time beauty founders are succeeding is by going back to their Rolodexes and playbooks from their first experiences. Some are getting the old gangs back together as they build out their teams and partnerships.  For example, Chis Salgardo, who spent 12 years running the Kiehl’s brand for L’Oreal, eight months ago launched a new men’s skincare line, Atwater.  The line has already been picked up by two previous retail partners of Salgardo’s, Nordstrom and Saks, with others likely on the way.

There is always opportunity for new founders, who can be exciting and disruptive. But proven beauty brand builders are returning, succeeding, helping the category to grow, and demonstrating both their continuing creativity, and the value of experience.

Headline of the Week

J&J’s Kenvue eyes $47 billion valuation in biggest US IPO since 2021

Johnson & Johnson’s consumer health unit Kenvue was valued at about $50 billion on Thursday, in what was the biggest U.S. initial public offering since late 2021.  The Kenvue portfolio includes widely known brands, such as Band-Aid, Tylenol, Listerine, Neutrogena, Aveeno and J&J’s namesake baby powder.  Shares, priced at $22 apiece by Kenvue, were indicated to open nearly 14% above their offer price on the New York Stock Exchange.  J&J on Wednesday sold 172.8 million shares of the business in an upsized offering to raise $3.8 billion and said it will continue to own a stake of about 91% in Kenvue.




Apparel & Footwear

UK’s Superdry plans to raise about $15 million through share sale

Struggling British fashion brand Superdry said on Tuesday that it planned to raise about 12 million pounds ($14.97 million) through the sale of about 19.1% of its equity. The retailer looked to issue 15.7 million shares at an issue price of 76.3 pence each. Earlier in the day, the company said it was in “positive talks” with investors regarding a potential equity raise. Superdry had been considering raising funds since April, as it battled a cash crunch and subdued demand for its spring-summer items amid a cost of living crisis. The company, whose shares have lost 33.8% of its value so far this year, said the sale of equity is at a discount of about 10%, from its last close of 84.7 pence per share. The latest move comes months after the company sold its intellectual property assets in much of the Asia Pacific region to South Korea’s Cowell Fashion Company for $50 million, to raise cash.

francesca’s Expands Portfolio with Acquisition of Lifestyle Brand, Richer Poorer

Francesca’s Acquisition LLC, a specialty retailer operating a nationwide chain of francesca’s and franki by francesca’s boutiques providing customers with unique and carefully curated fashion, accessories, jewelry, and lifestyle products, today announced the asset purchase of California-based wardrobe essentials brand, Richer Poorer. This integration will put Richer Poorer under the francesca’s Acquisition LLC umbrella as a wholly owned subsidiary. Two years into a multi-year enterprise growth strategy after being taken private in 2021 by TerraMar Capital LLC, francesca’s has continued to prioritize growing its eCommerce channel and customer experience, scaling tween brand franki by francesca’s, expanding physical boutique experiences, as well as most recently launching the fran Club loyalty platform and forever fran, a re-sale partnership with thredUP. Prioritizing these brand pillars has helped deliver substantial performance momentum for the company to date, and francesca’s Acquisition LLC now shifts gears to focus on targeted acquisitions and the expansion into a multi-branded company. The Richer Poorer acquisition bolsters channel reach, including leveraging its robust wholesale network, and introduces new product categories to the brand’s portfolio mix.

Allbirds Sued Over ‘Misleading’ IPO

An Allbirds shareholder’s class action lawsuit accuses the Bay Area company of making statements that were false or misleading to investors when it went public in late 2021. Plaintiff Gennady Shnayder filed the lawsuit on April 13 on behalf of himself and others who also bought stock in the brand, alleging that Allbirds’ initial public offering (IPO) with the Securities and Exchange Commission (SEC) omitted key details regarding future plans. The complaint claims Allbirds’ SEC registration statement failed to disclose that it was promoting products beyond its core offerings, like the popular Dasher and Runner sneakers, made from wool and cellulosic fibers. The suit said that the company was underinvesting in bestselling products to push new designs, which hurt Allbirds’ sales. This contrasted with what Allbirds laid out in its IPO statement, which said it planned to use the IPO proceeds for “general corporate purposes, including working capital, operating expenses and capital expenditures,” according to the complaint, which also names Allbirds co-CEOs Tim Brown and Joey Zwillinger, along with several banks involved with the IPO, as defendants.



Athletic & Sporting Goods

Vancouver-based Nautilus selling off its namesake brand

Vancouver’s longtime fitness giant Nautilus Inc. announced it has sold its Nautilus brand, though will keep the company name for now.  The business, which also owns Bowflex, Schwinn and JRNY, is putting all of its efforts into these three core brands.  “When we launched our transformative North Star strategy two years ago, we emphasized the importance of focusing on our Bowflex, Schwinn, and JRNY brands and signaled that we would be de-emphasizing the Nautilus brand,” Nautilus CEO Jim Barr said. “Since then, we have stopped manufacturing equipment under the Nautilus brand and have been selling remaining Nautilus products.”  The $13 million sale included the Nautilus brand trademark assets and related licenses. The company said it used the proceeds from the sale to pay down part of a term loan.

Outtech Acquired by Legacy1846 Outdoor Group

Outtech Inc., an outdoor industry leader in sales and marketing, announced that it, along with subsidiaries – QuickFire and Peak Strategic Insights, has been acquired by Legacy1846 Outdoor Group, an investment holding company. These entities join Trophyline, LLC, Redline Bowhunting, and The Sports Products Group, LLC as additional owned investments of Legacy1846.  Legacy1846, headquartered in Fredericksburg, TX, was founded by Gordon & Ryan Sauer and their family, as well as two of the original founders of Outtech, Jay Scholes and Ron Rette. The mission of this group is to invest in brands and services that bring value to both manufacturers and consumers of outdoor products.

Cosmetics & Pharmacy

US perfume giant Coty weighs Paris stock listing

Coty Inc will explore a listing on the Paris Stock Exchange as the CoverGirl cosmetics maker looks to strengthen its presence in Europe and tap into new investors in the market.  Coty has a large stable of fragrances and skin care products that it produces under license for fashion houses like Burberry, Hugo Boss, Chloe, Gucci and Mac Jacobs.  The Paris stock exchange is home to three of the world’s largest luxury groups, LVMH, Hermes and Kering.  The firm was acquired by the US pharmaceutical firm Pfizer in the 1960s, and since the 1990s has been majority owned by JAB, a holding for Germany’s Reimann family.  JAB has taken stakes in a range of popular consumer brands, including the American speciality doughnut chain Krispy Kreme — which is reportedly set to open its first Paris stores later this year.

Michelle Pfeiffer’s Henry Rose Gains Series A Investment

Henry Rose, the genderless fine fragrance brand founded by Michelle Pfeiffer, has gained a Series A investment led by Sandbridge Capital, its first external investment since its launch in 2019. Terms of the deal were not disclosed. Since launching with five fine fragrances via a direct-to-consumer model, the brand, which discloses 100 percent of its ingredients, has now grown to include 11 fine fragrances and multiple product categories, including home and body. Last month, it unveiled a body cream collection featuring body lotions in six of the brand’s scents.  Henry Rose is available in Credo, Neiman Marcus and Nordstrom among others.

Cleverman Raises to Expand Customized Beard & Hair Color Brand

Cleverman, a customizable, direct to consumer men’s beard and hair color brand, has raised $1.8 million in funding from L’Attitude Ventures, with participation from Fab Co-Creation Studio Ventures. The fundraise will support research, product innovation, e-tailer expansion and brand awareness.  L’Attitude Ventures invests in early-stage U.S. Latino-owned brands, for example Nopalera.  Cleverman’s customized hair and beard dye products come in more than 10,000 combinations of formulas generated by its 3-minute personalized quiz, which helps consumers find tailor-made colors, tools and techniques to meet their personal care goals. Kits start at $18.95.  The brand was launched in March 2021 by entrepreneur and P&G and Revlon industry veteran, Carlos Barreto.

Discounters & Department Stores

Walmart to sell Destination Maternity clothing online, in stores

Adding another brand to its lineup, Walmart has entered into an exclusive distribution deal to sell Destination Maternity’s spring and summer fashions in select stores and online, the retailer announced on Thursday. As part of the deal, the retailer will feature various maternity items such as dresses, jeans, jeggings, leggings, nursing bralettes, tops, bottoms and activewear. The clothing ranges from small to XXXL, per the press release. Parents-to-be can add Destination Maternity products to their baby registry on Walmart’s website and in select stores, according to the announcement.

Simon Property ownership in retailers could end in 5 to 10 years, CEO says

Simon Property Group’s retail holdings swung to a Q1 net operating loss of $54.5 million from net operating income of $25.9 million in the year-ago period, according to a company press release. Some retailers did better than others, with the mall REIT’s investment in brand management firm Authentic Brands Group performing the best, CEO David Simon told analysts Tuesday. J.C. Penney is profitable but required investments in stores and its new beauty spaces, he said. Overall at the company, lease income in the quarter rose 3.3% to $1.2 billion, with funds from operations up 1% to $1 billion. Occupancy edged up 1.1% to 94.4%, with base minimum rent per square foot up 3.1% to $55.84. Reported retail tenant sales per square foot rose 3.3% to $759.

J.C. Penney profits tumbled last year, as sales edged down

J.C. Penney’s Q4 total net sales fell 5.4% to $2.4 billion, as net income rose 18% to $45 million, according to various filings with the Securities and Exchange Commission. For the full year ended in January 2023, net sales fell 3.4% year over year to $7.6 billion. Net income tumbled 36.3% to $221 million, according to an SEC filing Tuesday. Ending inventory as of Jan. 28 rose 11.4% to $1.8 billion, per the most recent financial report.

Dollar Tree hires Dollar General vet as chief supply chain officer

Dollar Tree on Monday announced that Mike Kindy is the company’s new chief supply chain officer. Kindy has more than 34 years of management experience in retail logistics and distribution center operations, according to Dollar Tree’s announcement. He’s held leadership positions at ConAgra Foods, Safeway and PricewaterhouseCoopers. Most recently, Kindy served as executive vice president of global supply chain at rival Dollar General. During his tenure with Dollar General, Kindy oversaw the addition of nine traditional distribution centers, the inception of the DG Fresh supply chain, and the creation of the DG private fleet. The expanded private fleet of trucks gives the company more operational control of its supply chain, sibling publication Transport Dive reported last year.



Emerging Consumer Companies

Love, online wellness marketplace, launches

Love, the online health and wellness marketplace, has launched as a wellness marketplace that features an initial 200 curated products, like supplements, health testing kits and essential oils, among categories including reducing stress and gut health. Love will earn a commission on the sales. All products on the site pass a set of compliance processes and reviews. For each item, there will also be two scores: a Love score and a consumer score. Love previously raised $7.5 million from investors, including Human Capital and MaC Venture Capital, last year. The company has since raised another tranche (to bring total funding to just under $20 million) from a group of new and existing investors that had previously backed Bolt, including MaC Venture Capital and Streamlined Ventures.

Sourse, vitamin-infused chocolate company, raises seed round

Sourse, the three-year-old snackable skin-care line founded by actress Sarah Hyland and Jenne Moore, brand raised $2.4 million in seed funding from New Theory Ventures, H Ventures, JAWS Ventures, Satori Capital, Short List Capital, Harlo Capital and LDR Ventures. Model Sanne Vloet and gluten-free wellness influencer Nicole Cogan also participated in the round. It followed a pre-seed round of $1.6 million received in 2021 by several of the same investors as well as 25madison. The funding is being used to support the brand’s entry into Sephora that was announced earlier this month, as well as clinical research, product development and critical hires. The brand offers multiple supplements focused on beauty, including its Sephora-exclusive hair growth supplements and its skin-focused “Glow” supplements, the latter of which are its top seller.

Kinnos, maker of colorizes disinfectants, raises $15 million

Kinnos, the maker of Highlight, a novel technology that colorizes disinfectants, announced a $15 million financing led by a group of current and former industry leaders. The company also named healthcare veteran Steve Fanning as Chief Executive Officer and a member of the Board of Directors. This latest infusion of capital and new leadership will enable the company to rapidly scale to meet growing healthcare industry demand for Highlight, its patented portfolio of products for improving cleaning and safety by visibly coloring the disinfectants hospitals currently use. Current and new investors include family offices and funds like Pioneer Healthcare Partners, Kapor Center, and Partnership Fund for NYC and former industry leaders from Abbott, Baxalta, Baxter, Bayer, Becton Dickinson, Cantel, Ecolab, Intermountain Healthcare, NorthShore University HealthSystem, and Walgreens, among others., online education platform, raises $15 million, a NYC-based company making community college accessible across the country, raised $29m in funding. Backers included Discord founder Jason Citron; OpenAI founder Sam Altman; Figma founder Dylan Field; former head of Stripe Issuing Lachy Groom; Bloomberg Beta; Founders Fund; Rethink Education; Reach Capital and Precursor Ventures among other investors. Campus is an accredited college offering live online and in-person associate degrees and certificate programs. Its online degree programs, dubbed Campus Scholars programs, are taught by a network of professors who also teach at leading universities and HBCUs. Every student is given the resources needed to ensure their academic success, including a free laptop, free WiFi, unlimited tutoring and individual support coaches. For faculty, Campus provides an opportunity to supplement existing teaching income — the average Campus professor has increased their annual income by 20 percent. The company has about 850 students enrolled today.



Food & Beverage

Blue Apron ‘Actively Pursuing All Options’ for Financing Following $17M Net Loss in Q1  

Blue Apron executives said the company is “actively pursuing all options” to bring in much-needed capital as it continues to suffer significant quarterly losses.  During the quarter ended March 31, the meal kit delivery service saw a net loss of $17 million compared with a loss of $38.7 million over the same period last year. Revenue in the quarter fell to $113.1 million, a 4% year-over-year decline.  “While we continue to make improvements to our fundamentals, we need to bring more liquidity into the business in the near-term and we are actively pursuing all options available to us, including one or more financing opportunities and/or other strategic transactions, including significant commercial partnerships,” president and CEO Linda Findley told analysts.  In March, Blue Apron amended its note purchase agreement to pay off its dues quicker than originally planned in order to reduce its liquidity covenant. The company breached the agreement late last year when it was unable to secure private placement financing from its lead shareholder, Joseph N. Sanberg, in the originally expected timeframe.

Danone invests in animal-free dairy startup Imagindairy

Danone’s corporate venture arm Danone Manifesto Ventures has taken a minority stake in Imagindairy, an Israeli startup making ‘animal-free’ dairy proteins via precision fermentation (using microbes instead of cows).  While Danone is heavily invested in plant-based dairy through brands such as Silk, Alpro and So Delicious, this is its first move into the animal-free dairy space, whereby firms engineer fungi or yeast to make dairy proteins such as whey and casein.  Imagindairy said Danone would bring “strategic and operational support to accelerate our growth” adding that the partnership would “pave the way to future collaborations with Danone, as we explore potential business applications together.”  Founded in 2020 by Dr Arie Abo (CTO) and Dr. Eyal Afergan (CEO), Imagindairy has raised $28 million to date. It first plans to bring beta-lactoglobulin (whey protein) to the US market but is also working on a range of other milk proteins including casein proteins and alpha lactalbumin. The plan is to scale up with contract manufacturing organizations (CMOs) before building his own facility.

Hero Bread to expand retail distribution following $47.5M Series B fundraise

The parent company of Hero Bread has raised a total of $47.5 million in funding following its recent Series B round. Hero Labs, Inc. plans to expand retail distribution of its low-carbohydrate baked foods significantly this year.  After an exclusive introduction of its sandwich rolls at select Subway restaurants in a highly promoted debut, Hero Bread launched its sliced bread and kaiser rolls nationally direct to consumers a year ago. The products contain between zero and one net gram of carbohydrates and no sugar.  The brand expanded into grocery retail late last year and within the first five months on shelves has a repeat purchase rate of 54%, according to the company. Products are available online at, and, and by the end of May will be sold in 2,300 retail locations across the country, including Sprouts Farmers Market, Albertsons, Tom Thumb, Randall’s, Heinen’s, and Buehler’s Fresh Foods, among others.  Cleveland Avenue, DNS Capital, Union Grove Venture Partners, Composite Ventures, GreatPoint Ventures and The D’Amelio Family Fund, 444 Capital, participated in the Series B round, joining a roster of investors that includes Tom Brady, Kevin Durant and Rich Kleiman’s Thirty Five Ventures, The Weeknd and Lil Baby.

Michelle Obama Starts Food-and-Drinks Company Aimed at Fighting Childhood Obesity

Former first lady Michelle Obama, who campaigned for children’s health and fitness during her time in the White House, is co-founding a company selling food and drinks intended to be healthier for kids than what is typically on store shelves.  The new company is PLEZi Nutrition. “If you want to change the game, you can’t just work from the outside. You’ve got to get inside,” Mrs. Obama said. “You’ve got to find ways to change the food-and-beverage industry itself.”  PLEZi’s products, the first of which is a no-sugar-added children’s drink, hit the market as obesity rates are rising among U.S. kids and U.S. food marketers pose heavy competition.  U.S. children consume too much sugar, much of it in the form of sugar-sweetened drinks, doctors and nutrition researchers say. More than three-quarters of 9-to-13-year-olds exceed the recommended limit of added sugars per day, according to the federal dietary guidelines. By adolescence, U.S. children get about 32% of their added sugars from sugar-sweetened beverages


Grocery & Restaurants

Subway comes up with $5 billion debt plan to clinch $10 billion-plus sale, sources tell Reuters

The bankers running the sale process for Subway have given the private equity firms vying for the sandwich chain a $5 billion acquisition financing plan, hoping to overcome a challenging environment for leveraged buyouts and fetch the company’s asking price of more than $10 billion, people familiar with the matter said. Interest rates have been rising and concerns about an economic slowdown have increased since Subway said in February it was exploring a sale, making debt more expensive and less available for buyout firms pursuing deals. This is weighing on how much the private equity firms are offering to buy companies. So far, bids for Subway have ranged between $8.5 billion and $10 billion, one of the sources said. Subway’s financial adviser, JPMorgan Chase & Co, is now hoping a $5 billion debt financing package it has put forward will show buyout firms they can borrow enough to structure an attractive deal even at a $10 billion-plus valuation, the sources said. The debt financing is based on a mix of loans and bonds and its size is equivalent to 6.75 times Subway’s 12-month earnings before interest, taxes, depreciation and amortization of about $750 million, the sources added.

Olive Garden parent Darden to acquire Ruth’s Chris in $715M deal

Olive Garden parent Darden Restaurants Inc. has entered into an agreement to acquire the 154-unit Ruth’s Hospitality Group Inc. in a deal valued at about $715 million, the companies said Wednesday. Orlando, Fla.-based Darden, which also owns the LongHorn Steakhouse and Cheddar’s Scratch Kitchen brands among others, said it will commence a tender offer of $21.50 a share for Ruth’s shares in an all-cash transaction. Fine-dining steakhouse Ruth’s Chris is based in Winter Park, Fla. Ruth’s Chris was founded in 1965 in New Orleans, La., by Ruth Fertel and features signature USDA Prime steaks on 500-degree plates, New Orleans-inspired sides and an extensive wine list. Ruth’s Chris has 154 locations around the globe, including 80 company-owned or -operated restaurants and 74 franchised restaurants. In fiscal 2022, it generated systemwide sales of more than $860 million, total revenues more than $500 million, and average annual restaurant volumes for company-owned or -operated locations of $6.2 million. The $715 million purchase price represents a 9.4-times implied multiple of Ruth’s fiscal year 2022 transaction-adjusted earnings before income tax, depreciation and amortization.

Home & Road

Wayfair claims strong first quarter with ‘considerable opportunity in front of us’

Wayfair is claiming progress in its move toward profitability, as the company nears the breakeven point on a key financial metric. Overall, the online retailer posted losses that were better than analysts predicted. The net loss for the quarter was $355 million and the adjusted EBITDA loss was $14 million, down considerably from $113 million a year ago. Total net revenue was down 7.3%, or $219 million, to $2.8 billion year-over-year for the quarter, and U.S. net revenue fell by 5%, or $127 million, to $2.4 billion. Wayfair reported a diluted loss of $3.22 per share and an adjusted diluted loss per share of $1.13. “This was a strong quarter for Wayfair,” said Niraj Shah, CEO, co-founder and co-chairman, “and we were pleased to be seeing consistent market share gains and a significant improvement in cost structure vs. last quarter that gets us to nearly adjusted EBITDA breakeven in Q1. Most exciting is that we expect to have positive EBITDA in the second quarter.”

No slowdown here. Arhaus maintains upward trajectory with strong Q1 numbers

While many retailers are struggling to maintain 2022 numbers, Top 100 retailer Arhaus kept the positive momentum going in the first quarter of 2023. For the three months ended March 31, the Boston Heights, Ohio-based retailer reported net revenues of $305 million, up 23.7% from $246 million in the first quarter of 2022. Adjusted net income for the quarter was $34 million, or 24 cents per diluted share, doubling the $17 million, or 12 cents per diluted share, in net income over the same frame a year ago. Officials cited strong demand in showrooms and e-commerce and delivery of orders in the backlog as reasons for the successful quarter. “We are very pleased with our first quarter 2023 performance and are reaffirming our full year 2023 outlook,” said John Reed, CEO and co-founder. “In addition to the notable performance in our revenue and earnings, our first quarter demand comparable growth was 5.6%, with growth in the first two months of the year up high-single-digits and flat in March. In April, our demand comparable growth was flat.”

Sales, profits slip for Havertys in Q1, but officials see silver linings

While sales, income and earnings per share in the first quarter of 2023 for Top 100 retailer Havertys were off 2022’s marks, officials said there are reasons for optimism. The Atlanta-based retailer reported consolidated net sales of $224.8 million for the three months ended March 31, down 5.9% from $238.9 million in 2022’s Q1. Net income for the quarter came in at $12.372 million, or 74 cents per diluted share, down 36.1% from $19.361 million, or $1.11 per diluted share over the same three months of last year. Clarence Smith, chairman and CEO, noted that the declines weren’t unexpected, as furniture retail has returned to pre-pandemic norms. Given that, he said, Havertys performed quite well compared with the last year prior to COVID. “Our team delivered a strong quarter against difficult headwinds of shifts in consumer spending and persistent inflationary pressures,” Smith said.

New retail chain to launch in Canada — at former Bed Bath & Beyond locations

A Canadian retail mogul is stepping into the gap left by the demise of Bed Bath & Beyond Inc. Doug Putman plans to launch a new Canadian home store concept called Rooms + Spaces. The brand will debut this summer, opening its first 21 locations across Canada in former Bed Bath and Beyond and BuyBuy Baby storefronts. The move comes as Bed Bath & Beyond is winding down its business after filing for bankruptcy. Putman is acquiring more than 800,000 sq. ft. sq. ft. of real estate with the acquisition. The new company will be led by Greg Dyer, formerly general manager of Bed Bath & Beyond Canada. Rooms + Spaces will carry a broad range of products for every room in the home. The stores will cater to “the modern shopper who is looking to create spaces throughout their home that reflect their unique personality and style,” the company said, and support Canadian businesses and suppliers wherever possible. Putman is the founder of Ancaster-based Putman Investments. He has bought other iconic brands when they went insolvent, including Toys”R”Us and Babies”R”Us Canada, Sunrise Records, HMV in the U.K. and FYE, a pop culture chain in the U.S.

Tuesday Morning pulls the plug

When it filed for Chapter 11 bankruptcy last February, Tuesday Morning hoped to emerge with a reduced store base and rebuild its business. Now, it is throwing in the towel. The company is closing all stores and going out of business. The off-price home goods retailer has been acquired by Hilco Merchant Resources for $32 million via a court-approved bankruptcy sale, ALM reported. Tuesday Morning went into its 2023 bankruptcy with 487 stores and a plan to pare down to 218 units. That is roughly one-third of the 687 stores the company operated when it entered its first Chapter 11 reorganization in May 2020. The retailer emerged from that bankruptcy reorganization in early 2021 with 490 units. Store closings are expected to wrap up within a few weeks. Locations are honoring gift cards through May 13.

Jewelry & Luxury

Rolex Brings Certified Pre-Owned Program to United States

Rolex began rolling out its certified pre-owned watch program in the United States on May 3. The first two U.S. retailers to participate are watch chains: Tourneau/Bucherer and Watches of Switzerland. The program will “expand with other official Rolex Jewelers in the future,” a statement said. It covers secondhand Rolex watches that are at least three years old. They will be sold with a seal attached and a Rolex-issued card that both bear the words “Certified Pre-Owned.” The watches will also carry an “international guarantee” for two years after their resale date. Individual dealers can set their own prices for the pre-owned Rolexes, a company spokesperson confirmed. However, the authenticity of all watches will be certified by Rolex itself.

Bremont Recruits Watch Industry Vet Davide Cerrato as CEO

Watch industry veteran Davide Cerrato will be the next CEO of Britain’s luxury watch brand Bremont, and company officials say his appointment should help the Bremont board and its investors attain their “ambitious vision” for the brand. Cerrato formerly served as head of marketing, design, and product development for Tudor, Rolex’s sister company. At Tudor, Cerrato supervised the relaunch of the brand and the design of the venerated Black Bay watch, one of Tudor’s most popular pieces. Cerrato previously was managing director of Montblanc’s watch division and is credited for its 1858 Geosphere watch, which became a hero product for the brand. He has also served as CEO and creative director of HYT Watches.

In China, It’s Time to Splurge Again, and the Luxury Industry Is Relieved

This time last year, Shanghai — China’s capital of fashion and luxury — was in the throes of a ruthlessly enforced Covid lockdown. The city’s glittering high-end malls and avenues lined with flagship stores stood practically empty. Today it is a different story. Huge crowds on a recent weekend flocked to top retail destinations on or near Nanjing Road, the hub of glamour in China ever since the country’s first large department stores began to open there in 1917. “I splurge more extravagantly,” Sunny Zhang, 24, said as she waited in line to enter the Chanel store at Plaza 66 mall, where the corridors are lined with shops selling some of the world’s most expensive apparel. Ms. Zhang, who works for a consulting firm, used to buy six handbags a year. Now, she purchases up to five handbags a month.

King Charles’ Coronation Will Give British Luxury A Shot In The Arm

When King Charles III is coronated in Westminster Abbey on Saturday, May 6, it is bound to reignite questions about the value of the monarchy. Many will watch all the pomp and circumstance of the event and the three-day holiday weekend surrounding it and measure it in money wasted. The coronation alone is estimated to cost between $63 to $126 million, even as Charles is said to have slimmed down the invite list. Unlike royal weddings, the British taxpayers foot the bill as part of their Sovereign Grant, an annual taxpayer allotment that allows the royals to live the lifestyle of luxury they’ve grown accustomed to. It totaled $122 million in 2022, amounting to about $2 per U.K. citizen, less than the cost of a tall Starbucks, but painful for many who’ve had to cross a Starbucks’ indulgence off their list in a time of high inflation. On the other hand, the royals give as good as they get. Brand Finance reported that the monarchy contributed $2.2 billion to the U.K. economy in 2017. And it estimated that William and Kate’s wedding alone brought in well over $1 billion. Any way you look at it that is a pretty good return on investment.


Office & Leisure

Gibson Brands CEO exits

Guitar and music retailer Gibson Brands named Cesar Gueikian as president and interim CEO on Tuesday. Gueikian joined the company as Gibson’s chief merchant in 2018, and in 2021 was appointed brand president.  Gueikian replaces President and CEO James Curleigh who led the company since 2018. Curleigh is leaving the company and will step down as a director. In its announcement, the company credited Gueikian with helping to orchestrate Gibson’s resurgence by building brand momentum, product innovation and direct-to-consumer offerings. In 2018, privately held Gibson said it controlled 40% of the market for $2,000-plus guitars. But the company hit a low note that year when the iconic brand, played by artists of all genres from B.B. King to Slash of Guns ’n Roses to Green Day’s Billie Joe Armstrong, filed for Chapter 11 bankruptcy. Gueikian, Curleigh and Mark Agnesi, Gibson’s director of brand experience, were part of a new leadership team brought on following the departure of former CEO Henry Juszkiewicz. According to Guitar World, Juszkiewicz made changes to Gibson’s products that alienated some consumers. Although Juszkiewicz’s tenure was controversial, he’s also credited with saving the company from collapse 30 years earlier. Gibson primarily sells its products online, DTC, and through other retailers like Guitar Center and online music retailers like Sweetwater. The company’s brand portfolio also includes sibling guitar brands Epiphone and Kramer and amplifier maker Mesa/Boogie.

Cineworld gets US court approval to raise $2.26 billion after bankruptcy

Bankrupt movie theater chain Cineworld received U.S. court approval on Tuesday to raise $2.26 billion as part of its exit from bankruptcy, after reaching a settlement with a minority faction of lenders that had opposed parts of the exit financing. Cineworld is aiming to emerge from Chapter 11 bankruptcy in the first half of 2023, with a proposal to cut $4.53 billion in debt, wipe out existing shareholders and transfer ownership of the company to its lenders. U.S. Bankruptcy Judge Marvin Isgur at a hearing in Houston approved Cineworld’s plan to fund its post-bankruptcy operations with a new $1.46 billion loan and the sale of $800 million in new equity shares. Cineworld is scheduled to seek final court approval of its bankruptcy restructuring on June 12. Isgur approved the financing after Cineworld announced a last-minute settlement that resolved objections raised by minority lenders including Jefferies Leveraged Credit, Glendon Capital Management and Greywolf Capital. The settlement resolved a dispute over the amount of new stock that Cineworld’s lenders would receive for backstopping the exit financing.

Away to open its first new retail store since 2021

After putting retail expansion on pause during the pandemic, Away is opening a new store in San Jose, California later this week. It’s one of a few new store openings the travel brand has slated for this year, as the company says it is making brick-and-mortar expansion a bigger priority in 2023. Prior to this latest announcement, the last store that Away opened was in Seattle in 2021.  In addition to the San Jose store, Away is also opening a location in the Georgetown neighborhood of Washington, D.C. later this summer and others that are yet to be announced. Retail stores are projected to generate close to 20% of Away’s revenue this year, with new stores generating at least $3 million in revenue. With this bigger focus on retail expansion, Away is joining other DTC counterparts like Allbirds, Parachute and Warby Parker, who are counting on stores to drive a bigger percentage of growth. “Retail is a super important part of our overall business, not just for the revenue that it provides itself, but also for the immense lift that it gives to the entire business,” Away President Catherine Dunleavy said in an interview with Modern Retail. She added that anytime Away opens a retail store, its e-commerce business experiences a 150% lift in that market. acquires corporate gifting platform is expanding its corporate and consumer gifting capabilities. The specialty gift retailer has acquired SmartGift, an intelligent gifting platform that enables brands and corporations to purchase presents for business partners. Specifically, the solution offers a single portal that enables users to send, track and manage their corporate gifts and recognition campaigns. The acquisition will add the functionality of SmartGift’s intelligent gifting platform to’s family of brands focused on providing gifts. SmartGift supports an array of gifting experiences across retail, entertainment and corporate, and also features a rewards platform. SmartGift is the newest partner on a growing list of’s recent acquisitions, which include the January 2023 addition of the Things Remembered brand.  In 2022 the specialty retailer purchased Alice’s Table, a provider of fully digital and curated live-streaming floral, culinary, and other experiences to public event attendees, as well as to private and corporate clients across the country.

Technology & Internet

Apple reports better-than-expected quarter driven by iPhone sales

Apple reported second-fiscal quarter earnings on Thursday that beat Wall Street’s soft expectations, driven by stronger-than-anticipated iPhones sales. Apple CEO Tim Cook told CNBC that the quarter was “better than we expected.” However, Apple’s overall sales fell for the second quarter in a row. The tech giant’s shares rose nearly 2% in extended trading, and continued climbing when Apple gave forecast data points about the current quarter. Apple didn’t provide formal guidance, continuing its practice that dates back to 2020 and the start of the Covid-19 pandemic. Management typically provides some data points on a call with analysts. Apple finance chief Luca Maestri said the company expects overall revenue in the current quarter to decline about 3%. “We expect our June quarter year-over-year revenue performance to be similar to the March quarter assuming that the macroeconomic outlook does not worsen from what we are projecting today for the current quarter,” Maestri said on a call with analysts. He added the company is facing macroeconomic challenges in digital advertising and mobile gaming, which is part of Apple’s services business. The highlight of Apple’s report was iPhone sales, which grew from the year-ago quarter even as the broader smartphone industry contracted nearly 15% during the same time, according to an IDC estimate..


Shopify cuts 20% of its workforce; shares surge on earnings beat

Shopify on Thursday announced it’s cutting 20% of its workforce. The news came as it reported first-quarter earnings that beat analyst estimates on both the top and bottom lines. Shares of Shopify closed up 23% on Thursday. CEO Tobi Lütke announced the job cuts in a memo to employees posted on the company’s website. He didn’t specify which units will be affected as a result of the layoffs. “I recognize the crushing impact this decision has on some of you, and did not make this decision lightly,” Lütke wrote. The cuts mark the second round of layoffs for the Canadian e-commerce company. Shopify last July laid off 10% of its workforce after Lütke said the company had misjudged how long the Covid pandemic-fueled e-commerce boom would last. Lütke said Shopify is slimming down as a company as it focuses on its core business, which is making tools for companies to sell products online. Shopify also beat Wall Street estimates for the first quarter. The company reported revenue of $1.51 billion, which was up 25% from a year earlier.


Finance & Economy

Fed increases rates a quarter point and signals a potential end to hikes

The Federal Reserve on Wednesday approved its 10th interest rate increase in just a little over a year and dropped a tentative hint that the current tightening cycle is at an end.  In a unanimous decision widely expected by markets, the central bank’s Federal Open Market Committee raised its benchmark borrowing rate by 0.25 percentage point. The rate sets what banks charge each other for overnight lending but feeds through to many consumer debt products such as mortgages, auto loans and credit cards.  The increase takes the fed funds rate to a target range of 5%-5.25%, the highest since August 2007.


Private payrolls surged by 296,000 in April, much higher than expected, ADP says

Hiring at private companies unexpectedly swelled in April, countering expectations for a cooling job market ahead, payroll processing firm ADP reported.  Private payrolls rose by 296,000 for the month, above the downwardly revised 142,000 the previous month and well ahead of the Dow Jones estimate for 133,000. The gain was the highest monthly increase since July 2022.  The surge comes despite Federal Reserve efforts to slow economic growth and in particular to tame a powerful labor market that has added more than 800,000 jobs this year by ADP’s count. An imbalance of demand over supply in the labor market has created strong wage gains that are reflected in persistent inflation pressures.

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