On May 7, Colonial Pipeline, the operator of one of the nation’s largest fuel pipelines, announced it had been hit with a ransomware attack, wherein a criminal group locks up computer systems and holds data hostage until the victim pays a ransom. The company was forced to shut down its pipeline, which delivers nearly half of the gasoline used on the East Coast, causing drivers to engage in panic-buying and prices to surge. To regain functional technology, Colonial Pipeline is believed to have paid the extortionists about 75 Bitcoin, or nearly $5,000,000. The FBI announced that software from the hacking group DarkSide was behind the attack.
The ecosystem in which DarkSide operates is a complex enterprise. Like thousands of legitimate software-as-a-service, or SaaS, businesses, DarkSide provides backend tools (cloud-based malware and other software) to its clients who execute the “customer-facing” work (conduct the breaches, encrypt the data and extort the victims). DarkSide then takes a sizable portion of the ransom that victims pay to restore their systems.
This criminal activity is the evolution of the simpler hacks to which the world grew accustomed in the 2010s. In those cases, hackers would break into a company’s system, steal passwords and payment details while operating in the background and then sell this data to other criminals who use personal information for identify theft and fraudulent transactions. In the aftermath, the corporate target would patch its technological vulnerabilities, issue a public apology, suffer short-term media-shaming and offer credit monitoring to exposed consumers. Consumers were the real victims, and the targeted businesses were simply intermediaries. Among industries, retailers were particularly attractive and frequent targets as their e-commerce databases contain millions of consumer accounts and billions of financial transactions to mine.
In the current incarnation, hackers take down businesses’ ability to operate in a full-frontal assault – hitting a corporation’s pocketbook and demanding immediate attention. It is a more efficient and lucrative model for the criminals too – it is far easier to collect Bitcoin from corporations than it is to sell batches of credit card numbers on shady dark web platforms. In addition, the profile of attractive corporate targets has expanded. Instead of needing a broad and deep e-commerce customer file, any business that relies on computers (i.e., EVERY business) will do.
While dismantling anonymous, loosely organized, foreign-domiciled hacking networks seems an insurmountable goal, public pressure and appeals to their moral compass may be surprisingly productive. DarkSide and others like it prefer to operate in the shadows, discreetly squeezing their victims without attracting too much attention from law enforcement or media. However, in response to the fears, chaos, and resulting attention that the Colonial Pipeline hack caused, last week DarkSide released a statement that its motivation is economic, not political. DarkSide’s statement went on to say it would “introduce moderation and check each company that our partners want to encrypt to avoid social consequences in the future”. It is nice to know we are dealing with socially-just cybercriminals. I am sure that will go a long way within the Colonial Pipeline boardroom, at the FBI, and in the hearts and minds of corporate America.
Headlines of the Week
General Mills plans to acquire Tyson Foods, Inc.’s pet food business for $1.2 billion. As part of the acquisition, General Mills also will acquire a manufacturing plant in Independence, Iowa. Tyson Foods’ pet food business had sales of more than $240 million during the 12 months ended April 3, according to the company. General Mills said the transaction will provide an estimated tax benefit of $225 million, equating to an effective purchase price of $975 million. General Mills entered the pet food category in 2018 when it acquired Blue Buffalo Pet Products, Inc. for approximately $8 billion. “Pet food is a high-growth category, fueled by the humanization of pets, a trend that has only increased during the pandemic,” said Bethany Quam, General Mills group president, Pet segment. “By adding these trusted pet treat products to our portfolio, we are strengthening our position in this attractive category. This acquisition is highly complementary to our existing business, combining Blue’s leading position in natural pet food with Nudges, Top Chews, and True Chews strong portfolio of natural meat treats for pets.”
The private-equity parent of Smart & Final plans to sell the warehouse-style grocery chain to Bodega Latina Corp., a subsidiary of Mexican retailer Grupo Comercial Chedraui. Under the agreement, announced Thursday evening, Bodega Latina would acquire Smart & Final Holdings from funds managed by affiliates of New York-based parent Apollo Global Management in a deal valued at about $620 million, including the assumption of debt. Apollo had acquired Smart & Final in a $1.12 billion leveraged buyout in June 2019. Currently, Smart & Final operates 254 stores under the Smart & Final Extra! (198 locations) and Smart & Final (56 locations) banners in California, Arizona and Nevada. Smart & Final generated U.S. revenue of about $4.1 billion in its fiscal year ended Jan. 3, 2021, with roughly 70% of sales from household customers and 30% from business customers. Another 16 Smart & Final stores in northwestern Mexico are operated through a joint venture. According to Grupo Comercial Chedraui, the combination with Smart & Final would create a leading diversified chain in Mexico and a multiformat food retail platform in the U.S., with consolidated sales of over $11 billion.
Apparel & Footwear
L Brands said Tuesday it will spin off its Victoria’s Secret brand rather than sell it. The company said it received interest from multiple potential buyers, but its board concluded that separating Victoria’s Secret and Bath & Body Works into two separate publicly traded companies would be a better option. The spinoffs are expected to be completed by August. L Brands CEO Andrew Meslow will continue to hold his position and will also lead Bath & Body Works following the spinoff, the company said. Victoria’s Secret CEO Martin Waters will keep leading the stand-alone business following the separation.
A specialty women’s apparel and accessories brand is the latest retailer to enter the fast-growing market for secondhand goods. Vera Bradley, which has more than 140 full-line and factory stores across the United States, will utilize the Resale-as-a-Service (RaaS) program from fashion resale marketplace ThredUp. The retailer will offer ThredUp’s “Clean Out Kits” to its customers, both online and in-store. ThredUp will then pay the seller for re-sellable items in the form of a Vera Bradley gift card. Vera Bradley will pay a platform fee to license RaaS technology, software, and logistics. “We’re thrilled to power an easy and sustainable way for shoppers to earn credit towards Vera Bradley’s vibrant patterns and travel bags,” said Pooja Sethi, ThredUp senior VP of RaaS and retail partnerships.
Known as the first Chinese e-commerce platform for lifestyle brands, Onion Global on May 7 formally went public at the New York Stock Exchange under the ticker symbol “OG”, offering 12.5 million American depository shares (ADS) and achieving the maximum increase of more than 57%. Onion Global is a next-generation lifestyle brand platform that incubates, markets and distributes the world’s fresh, fashionable and future brands to young people, with a unique and innovative business model that leverages key opinion consumers (KOC) representing a total of nearly 700,000 social media accounts. The firm, founded in 2015, currently works with over 4,000 brands across 43 countries and regions through various partners and KOCs. The prospectus demonstrates that for 2020, the group recorded annual revenue of over 3.8 billion yuan ($591 million), with net profits in excess of 200 million yuan ($31 million), more than double that of 2019. The international e-commerce platform had completed five separate rounds of financing by the time of going public.
Ralph Lauren on Thursday announced the sale of its Club Monaco brand to private equity firm Regent for an undisclosed amount, a deal expected to close by the end of June. The apparel company acquired the upscale apparel brand in 1999 in a cash transaction with an equity value of about $52 million; Polo Ralph Lauren also paid in full some $35 million in Club Monaco Inc. debt, according to a filing with the Securities and Exchange Commission. As part of its turnaround strategy meant to sharpen its focus, Ralph Lauren has been weighing its options for Club Monaco. The sale to Regent, (along with last year’s decision to turn its lower-priced Chaps brand into a licensed business) “concludes this portfolio evaluation,” the company said.
Shares of Poshmark and ThredUp, two leaders in the secondhand retail space, tumbled Wednesday in extended trading, as widening losses overshadowed strong sales growth in a hot category — especially among Gen Z. ThredUp shares as of Wednesday had risen more than 42% since its IPO, bringing the company’s market cap to $1.9 billion. Poshmark shares have fallen more than 55% since it went public, giving it a market value of $3.3 billion. Both businesses are digital marketplaces for secondhand clothes, shoes and accessories, somewhat akin to eBay and Etsy. Younger consumers in particular have been leading a shift to places such as Poshmark, ThredUp, Depop, The RealReal and StockX — with some favoring these stores for the bargain prices and others seeing shopping there as a way to be more conscious about the environment.
Athletic & Sporting Goods
TaylorMade Golf is changing hands for the second time in the last four years. The Carlsbad, Calif.-based equipment manufacturer announced on Tuesday that current financial sponsor, KPS Capital Partners, has signed a “definitive agreement” to sell the company to Centroid Investment Partners, a Korea-based private equity firm. Even without knowing the final numbers of the transaction, KPS will walk away with a sizable return on their initial investment. Four years after the firm acquired TaylorMade from Adidas, in 2017, for $425 million — roughly $200 million in cash — it tapped Morgan Stanley to run the sale of the equipment manufacturer with a reported $2 billion valuation, or nearly five times its total initial investment.
Chinese sportswear manufacturers Anta Sports and Li Ning are said to be joining the bidding for Adidas’s sale of its Reebok brand, according to a report from Reuters. The German sportswear giant acquired Reebok for $3.8 billion in 2006 as part of its efforts to take on U.S. rival Nike. But the Boston-based brand has failed to deliver the results that investors had expected. It only contributed approximately 7.8% of Adidas’s net sales last year. The business is now reportedly valued at about $1.2 billion. Adidas CEO Kasper Rorsted had been seeking to revive the subsidiary since he took office in 2016. But in February, the company said it had decided to begin the formal process of divesting Reebok. It will report Reebok as a discontinued operation from the first quarter of 2021.
Cosmetics & Pharmacy
Revlon Inc. is expanding its restructuring efforts, again. The latest restructuring effort, called the Revlon Global Growth Accelerator, is meant to allow the beauty company to reinvest in its brands to drive sales and profit growth. Revlon said it would work to boost organic growth for its brands in order to deliver a mid-single compound average annual growth rate through 2023, reduce annual costs by between $75 million and $95 million through 2023, and enhance capabilities and employee skill sets in order to “promote agility and deliver transformational change.” The new plan — one of several restructuring efforts the company has unveiled in recent years — is meant to focus on the Revlon and Elizabeth Arden brands in key markets and channels, including mass and prestige in the U.S., Europe, the Middle East and Africa, and China, and the firm’s global e-commerce business. Debbie Perelman, Revlon’s chief executive officer, called the Global Growth Accelerator program a “holistic transformation program.”
Nuun, the hydration supplement brand, has entered into an agreement to be acquired by Nestlé Health Science. TSG Consumer Partners (TSG), the private equity firm that currently owns Nuun, announced the sale agreement. Terms of the transaction were not disclosed. Founded in Seattle, Nuun pioneered the separation of electrolyte replacement from carbohydrates with a loyal following of athletes and fitness enthusiasts over 16 years. Over the last several years, Nuun has continued to expand its product portfolio, with Immunity, Rest, Energy, and Instant products for everyday hydration and endurance hydration. “Over the past few years, our partnership with TSG has helped accelerate our mission to enhance the lives of millions of consumers who increasingly seek healthy fitness solutions,” said Kevin Rutherford, CEO of Nuun. The transaction is expected to close in the second half of 2021.
Prestige body care brand Maëlys has a new investor. The brand received an investment of an estimated $30 million from Norwest, the venture and growth investment firm. Norwest now holds a minority stake in the brand, and joins controlling shareholder Barinboim Group. Sonya Brown, general partner at Norwest, is also joining the company’s board. Brown said the investment would primarily go to scaling the business to meet the ensuing demand of triple-digit growth. “They are 100 percent direct-to-consumer on e-commerce today,” Brown said. “They have a very tiny bit of business from Sephora.com and Ulta.com. They’ve had such a d-to-c demand that they haven’t had as much inventory to provide to Sephora and Ulta,” Brown said, stressing that expanding distribution wasn’t the brand’s first priority. “Currently, the intent is to stay mainly d-to-c.” According to a statement from Maëlys, the brand has grown 400 percent year-over-year and is anticipating $100 million in sales for 2021.
Discounters & Department Stores
As online sales skyrocketed in the past year, Walmart is integrating a new virtual try-on feature to encourage more e-commerce sales in the future. The big-box retailer announced that it plans to acquire Zeekit — a female-founded startup based in Israel. The financial terms of the deal were not disclosed. The virtual try-on experience will be available at Walmart.com, said Denise Incandela, Walmart U.S.’s executive vice president of apparel and private brands. Consumers can upload their photos or pick a model that represents their body type, height and skin tone, with the option to share their outfits with friends. As part of the deal, the company welcomed Zeekit’s three founders — CEO Yael Vizel, Chief Technology Officer Alon Kristal and Vice President of Research and Development Nir Appleboim — to Walmart, according to the Thursday announcement.
Dillard’s posted a 73% year-over-year increase in retail sales, to $1.3 billion, for the first quarter. The company had a record performance on earnings and gross margin, the latter of which leaped to 41.7% from 12.5% last year, CEO William Dillard said in a press release. The retailer’s performance compares to a miserable Q1 2020 for the sector but still handily beat analyst expectations. Compared to the pre-pandemic period (2019), Dillard’s retail sales remain down nearly 9%, with comparable sales down 6%.
With expanded vaccine distribution in the U.S. and the number of cases in most areas waning, the consumer is venturing out, including to malls. Simon Property Group CEO David Simon this week was somewhat subdued in his discussion with analysts about the mall REIT’s first quarter report, noting that the company’s projections remain conservative. But he also said that among consumers in some areas, “there’s clearly some level of euphoria around” the end of lockdowns and the government’s pandemic aid.
Macy’s may be rethinking its overall store strategy, but last week the company revealed plans regarding the renewal of its flagship location at Herald Square in New York City, according to a press release sent to Retail Dive. The project involves a $235 million private investment in the neighborhood surrounding the store, including Herald Square’s infrastructure, with upgraded subway access and improved transit connections. The company will also build a commercial office tower above the store. Macy’s forecast that the plan will generate $269 million in yearly city tax revenues, support 16,290 jobs and deliver over $4 billion in economic output annually. The Herald Square location will be open throughout the project’s development.
Nearly half of the planned store openings in the U.S. are dollar stores. That’s according to a recent report from Coresight Research, a firm that aggregates store opening and closure data from company press releases and earnings reports. Dollar General is by far the leader, with more than 1000 new stores planned this year, according to the report. The Goodlettsville, TN-based company has expanded rapidly over the past few years and operates more than 17,000 stores in the U.S. Dollar General opened, remodeled, or relocated 2,800 stores last year, 200 more than the company planned. The company also is aiming for more groceries in the mix, with a new hybrid format it is calling Dollar General Plus with about 8,500 square feet of selling space — 1,200 square feet more than its traditional stores. By the end of the year, Dollar General plans to offer fresh produce in about 10 percent of its stores, but the company has rapid expansion in mind through a self-distribution strategy called DG Fresh.
Emerging Consumer Companies
Onda, the New York-based sparkling tequila brand co-founded by actress Shay Mitchell, announced a $5 million Series A financing led by Aria Growth Partners, with participation from beverage industry veteran, Clayton Christopher, and venture studio 25madison. The investment will support Onda in product development, marketing initiatives, building out its team, and expanding wholesale, retail and e-commerce distribution channels to reach consumers nationwide.
Liquid Death, the Santa Monica-based sparkling water brand, raised a $15 million Series C. Investors in the new round include Live Nation, Tony Hawk, Wiz Khalifa, Steve Aoki, Hulu president Kelly Campbell and Dollar Shave Club founder Michael Dubin. As part of the deal, Live Nation will only sell Liquid Death across its venues and festivals across the United States for a period of time. The Series C follows a $23 million Series B last fall and brings the company’s total backing to date to $50 million. The company’s products are now carried in 16,000 locations throughout the U.S., including bars, tattoo parlors, cafes, local liquor stores and “big box” stores like Whole Foods, Walmart and 7-Eleven.
Grocery & Restaurants
Private equity firm CapVest Partners has agreed to offload Dublin-headquartered Valeo Foods Group to Bain Capital Private Equity for an undisclosed sum. CapVest established Valeo Foods in 2010 when it acquired Irish food businesses Batchelors and Origin Foods. The company has since grown to become a producer of branded and private-label food products that serves customers across 106 markets. Valeo Foods’ diverse portfolio of brands include Jacobs, Rowse, Odlums, Barratt, Balconi and Kettle – which it acquired through the purchase of Campbell Soup’s European crisp business. Since its inception, Valeo Foods has acquired and integrated 16 businesses in the UK, Ireland and continental Europe. For the 12 months through to March 2021, Valeo Foods has reportedly grown its annual net sales to approximately €1.1 billion, from less than €200 million in 2010. The business now operates 24 manufacturing facilities and has more than 4,000 employees.
Bain Capital Private Equity has entered an agreement to acquire Dessert Holdings from Gryphon Investors. Desserts Holdings is a premium dessert company offering products under three brands: The Original Cakerie, Lawler’s Desserts and Atlanta Cheesecake Co. The Original Cakerie, founded in 1979, is a manufacturer of desserts with locations in Vancouver, BC, and London, Ont. Lawler’s Desserts, founded in 1976, is a manufacturer of gourmet cheesecakes, layer cakes, pies and other premium desserts based in Humble, Texas. Atlanta Cheesecake Co., founded in 1988, is a manufacturer of premium cheesecakes and fusion desserts based in Kennesaw, Ga. Together, the brands serve more than 250 customers in the United States, Canada, Mexico, the Caribbean, South America and Asia.
Home & Road
Direct-to-consumer retailer Casper Sleep reported a net loss of $21.2 million for the first quarter ended March 31, a $13.3 million improvement from the same quarter last year. North American revenue in the quarter climbed 20% to $127.7 million, compared with $113 million during the first quarter last year. Direct-to-consumer revenue, including Casper’s 70 retail stores and e-commerce channel, increased 11.1% over the prior year quarter to $93.2 million. First quarter revenue from retail partners increased 53.7% to $34.4 million. The company said its adjusted EBITDA loss improved by $12.3 million, or 54% to $10.6 million. “Casper delivered record first quarter financial results that exceeded our expectations, and that momentum has continued in the second quarter,” said Philip Krim, CEO. “Our third-party manufacturing model is enabling us to effectively navigate industry-wide supply chain challenges as we meet growing demand for our products. As a result, we continued outpacing the overall mattress industry, generating first quarter North American revenue growth of 20% year-over-year, including 54% growth in retail partnership revenue.
Lifetime Brands Inc. reported net income of $3.1 million for its first quarter, compared with a net loss of $28.2 million for the prior year period. Consolidated net sales for the quarter ended March 31 were $195.7 million, an increase of 34.9%, or $50.6 million, compared to net sales of $145.1 million for the prior year period. CEO Robert Kay cited the company’s investment in increasing inventory levels, improvement in its international business, and adding new products and expanding brands as among reasons for the quarter’s performance. “Lifetime Brands is off to an excellent start in 2021,” he said. “This represents the seventh consecutive quarter of year-over-year growth from our core U.S. business, which continues to lead our overall business.” Kay said the company would focus this year on strategic initiatives, including enhancing its digital capabilities, expanding its presence in food service, gaining foothold in new categories including barbecue, pet, storage and organization and others.
Jewelry & Luxury
Reduce, reuse, recycle. Even though nearly five decades have passed since the catchy slogan was coined at the dawn of the environmental movement, in the diamond jewelry trade, the recycling message has only recently gone mainstream. On some level, of course, diamonds have always been recycled (or, reused, as the diamond dealer Jared Holstein recently clarified in an interview with JCK). Throughout history, jewels have been dismantled and melted down when fashions changed or their owners needed a quick spot of cash. What’s new is that these stones are now being explicitly marketed as “post-consumer recycled” goods. Although verifying the ethical provenance of such stones is difficult, if not impossible, it’s clear that “from an environmental perspective, a reused diamond is the stone with the lowest environmental impact,” says Holstein. That’s one reason why designers are increasingly gravitating toward them.
Sid Keswani, who served as president of Pandora’s North American division starting in 2018, left the charm-maker at the end of April to become the president of Centric Brands, a lifestyle brands collective. “Sid handed over the market in great shape, and we are grateful for his contributions over the years,” Pandora spokesperson Johan Melchior tells JCK. “Work to find Sid’s successor is ongoing, and we will communicate on this in due time.” North America is Pandora’s largest market, and the United States accounted for 31% of the brand’s revenue in the first quarter of 2021. The U.S. market delivered a “very strong performance” in the quarter, particularly on Valentine’s Day, the company said recently.
De Beers’ Forevermark is rebranding itself as “De Beers Forevermark,” so that it will better align with its parent company. The brand will also more closely align itself with the De Beers retail chain, De Beers Jewellers (DBJ), which has three stores in the United States. The two will now share a website, and some DBJ lines will be sold wholesale. Whether DBJ will sell Forevermark “remains to be seen,” says Forevermark US president Charles Stanley. The diamonds will bear reports from the De Beers lab, which has been rebranded the “De Beers Institute of Diamonds.”
One year after the pandemic brought a halt to in-person shopping, crowds are lining up outside of Louis Vuitton stores to buy $4,000 handbags in the U.S. and abroad. If the restored hype is any indication, makers of luxury apparel are set to enjoy a lucrative year of post-Covid pent-up demand. LVMH Moët Hennessy Louis Vuitton—the 70-brand empire including Louis Vuitton, Christian Dior and Givenchy—just hit record sales this quarter. According to the luxury giant’s most recent earnings report, its Fashion & Leather Goods division revenue surpassed $8 billion. Citigroup analyst Thomas Chauvet predicted in a research note published March 26 that LVMH sales would grow this year “in light of strong luxury data points out of China and the U.S.”
Office & Leisure
Party City Holdco reported a smaller-than-expected first-quarter loss and sales that beat estimates even as social gatherings remained constricted. The party goods chain said its net loss totaled $14.1 million, or $0.13 a share, in the quarter ended March 31, compared to a loss of $541.5 million, or $5.80 a share, posted in the year-ago period. Total revenue rose 3.1% to $426.8 million, beating estimates of $405.0 million. Total retail sales increased 10.0%, driven by a 49.3% comparable sales increase in core categories versus last year. “Despite operating in a pandemic impacted environment with fewer in-person celebrations, brand comparable sales increased 0.4% versus 2019,” said CEO Brad Weston. “While social gatherings were suppressed for a significant portion of the quarter, we were very encouraged by first quarter results and sales momentum which continued into April. As we look to the second quarter, we are confident in our overall positioning heading into the summer and graduation season.”
A British private equity firm is making another U.S. acquisition. Elliott Investment Management has entered into a definitive agreement to acquire the assets and business operations of Paper Source Inc. The stationery and gift retailer filed for bankruptcy in March, with a plan to sell itself. The acquisition will allow Paper Source to emerge from Chapter 11 with the support of a well-capitalized owner committed to the development and growth of the business, according to a statement by Elliott. Following the Chapter 11 process, Paper Source will operate approximately 130 stores (down from 158 at the time of the filing) across the United States as well as its wholesale division, Waste Not Paper by Paper Source.
Mattel is giving parents a way to keep past-their-prime Barbies, castoff Matchbox cars, and unwanted Mega construction bricks out of landfills with a toy takeback program announced today. The program, Mattel PlayBack, promises to give unloved old toys a second life by recycling their plastic parts into new products. All of the Big Three toymakers—Mattel, Hasbro, and Lego—have launched sustainability efforts in recent years to address a top concern of the key customers they have to keep happy: millennial and Gen Z parents. Lego, in October, 2019, rolled out a pilot program in the United States that made it easy for parents to get rid of old Lego bricks by donating them to school programs. Hasbro in August, 2019 pledged to stop using plastic packaging by the end of 2022, and Mattel in December, 2019 set a goal for itself of 100% recycled, recyclable, or bio-based plastics in all of its products and packaging by 2030.
Technology & Internet
YouTube announced Tuesday a $100 million fund that will pay the most popular creators on its nascent TikTok competitor, Shorts. “The Shorts Fund is just the first step in our journey to build a long-term monetization model for Shorts on YouTube,” the company said in a blog post. YouTube added the fund will be launched in the coming months. The fund comes as Google-owned YouTube tries to grow its user and creator base for its short-form video product, which is the company’s answer to mobile-first social media competitors like TikTok, Snap and Instagram’s Reels. YouTube is the latest to use a designated creator fund to try and court influencers on its mobile platform. Alphabet CEO Sundar Pichai said on the company’s earnings call that Shorts is garnering 6.5 billion daily views globally. YouTube launched Shorts to all U.S. users earlier this month, after launching in beta at the beginning of the year.
PayPal is making another acquisition in the e-commerce space as it moves beyond payments and into physical and online retail. The digital payments giant announced a deal to acquire start-up Happy Returns on Thursday for an undisclosed amount. The 120-person Santa Monica-based company lets people return things they bought online, in person. “The post-purchase experience is something we’ve been looking into, since it’s such a pain point — people want to shop online and return in store, and vice versa,” Frank Keller, senior vice president of consumer in-store and digital commerce at PayPal, told CNBC in a phone interview. “For retailers, we’re providing more comprehensive services beyond payments.” The acquisition will help solve sometimes messy logistics of returning and shipping items for merchants, and help drive foot traffic to those businesses as the economy reopens, Keller said. Eventually, he expects the product to incentivize more merchants to sign up for PayPal products. Happy Returns has roughly 2,600 drop-off locations where shoppers can return products for an immediate refund or exchange.
Finance & Economy
Companies paid much higher prices to producers in April for everything from steel to meat in another sign of inflation in an economy rapidly recovering from the pandemic. The new data comes a day after a sharp gain in consumer prices sent the stock market reeling. A sharp jump in steel mill products contributed to the leap in producer prices in April, the Labor Department said. Prices for beef and veal, pork, residential natural gas, plastic resins and materials and dairy products also moved higher last month.
US retail sales came back down to Earth in April after stimulus checks sent Americans on a shopping spree in March. Month-over-month, retail sales were flat in April, the Census Bureau reported. Stripping out car and auto parts, sales actually declined slightly, by 0.8%. The massive March advance that came on the back of a new round of stimulus checks from the American Rescue Plan was revised up to 10.7%, from 9.7% reported initially. Even though April sales were slightly weaker than economists expected, total sales over the past three months are still up a whopping 27% compared with the same period a year ago. The consumer spending boom of the past few months is a good sign for America’s recovery because some two-thirds of the economy is driven by people spending money.