The Big Story

Gaming Levels-Up in Lockdown; Esports Left Behind

Alex Martinage

While COVID-19 has forced the closure of many aspects of normal life, a number of articles and outlets have pointed out that several areas are benefiting from the “new normal.” One such subsector is video gaming. The gaming world can be broken down into two sections, the traditional gaming industry (what used to be called “video games”) and Esports. The traditional gaming industry is expected to be worth nearly $160 billion by the end of 2020 and represents the majority of the global video game market including developers, hardware, streaming services, and games. The other side of gaming is Esports: organized competitive leagues and competitions that parallel traditional sports leagues. The Esports market is expected to break $1 billion by the end of this year. While gaming and Esports are similar, the effects of COVID-19 on the two industries have been anything but. Traditional gaming has surged as more people turn to video games for entertainment during the lockdown. Esports, however, has suffered the same fate as many traditional sporting leagues, postponing or even canceling their seasons.

With the world stuck in lockdown, traditional gaming platforms and streaming sites have seen impressive user growth. In March, the gaming platform “Steam” hit an all-time high of 26.2 million concurrent players. During the coronavirus outbreak and lockdown in Europe, Amazon’s recently acquired streaming service Twitch saw first-time app downloads increase at an average 40% week over week. By April, Twitch accounted for 1.5 trillion out of the nearly 4 trillion hours of gaming watched across all streaming platforms. This strong performance does not come as a surprise, however, as companies and brands such as DraftKings, NASCAR, and NBA teams have taken to gaming and streaming to facilitate interaction with fans during the pandemic.

Other areas of the video gaming industry have seen similar success. Game developer studios have taken advantage of the lack of live entertainment with recent game launches, such as Activision Blizzard Inc.’s free Call of Duty: Warzone. The game has taken the world by storm, hitting 50 million players at the end of its first month and millions more watching online. Before the pandemic, developers like Activision Blizzard had been shifting their business models toward a recurring revenue model, utilizing their active user base to increase revenue with in-game transactions. This method has come to fruition with the closing of game retailers and factories as users are spending more money in-game. As a result, Activision Blizzard beat first-quarter earnings expectations and has seen its stock price increase by almost 35% since January.

However, parts of the gaming world are not completely immune to the coronavirus. Esports, which like traditional sports is reliant on a live audience, have had to postpone many of their planned tournaments. League of Legends, one of the largest Esports leagues, canceled their European Championship, despite having signed numerous commercial partners for the 2020 season. To put the potential loss of revenue into perspective, in 2019, League of Legends saw 44 million viewers during their World Championship stream. Other notable Esports titles such as Dota 2 and Call of Duty have been forced to postpone their events as well. As some Esports leagues attempt to adapt by moving online, they have received backlash as competition over the internet introduces new variables that in-person events eliminate such as cheating, connection speed, and time zone issues.

The pandemic has resulted in unprecedented changes, and gaming and Esports have consequently benefitted and suffered, respectively. Gaming’s momentum continues to build with so much of the world still in varying states of lockdown, while tournament cancellations have hamstrung Esports’ growth. With the explosion of interest and participation in video gaming during quarantine, it is likely that Esports will enjoy a much broader fan base in the post-pandemic world. But until then, COVID-19 has pushed Esports’ pause button.



Headlines of the Week

JDE Peet’s raises $2.5 billion in IPO

Pure play coffee and tea group JDE Peet’s BV priced its initial public offering at €31.50 ($35.01) per share, valuing it at €15.6 billion ($17.3 billion) and making it one of the biggest IPO’s of the year so far. The company, which has a portfolio of more than 50 brands, including Peet’s Coffee, Jacobs, L’Or, Senseo, Tassimo and Ti Ora, raised €2.25 billion ($2.5 billion) in the Amsterdam listing. It sold approximately 71.4 million shares, or 14.4.% of the company, including 22 million newly issued shares for €700 million ($772.7 million).  Existing shareholders Acorn Holdings and Mondelez International, Inc. sold an additional 40 million and 9.6 million shares, respectively, for a combined €1.55 billion ($1.7 billion). Acorn Holdings, the investment firm behind Panera, Krispy Kreme and Keurig Dr Pepper, will own 62% of JDE Peet’s after the listing. Mondelez’s stake in the coffee and tea company will be approximately 23%, and it will retain two seats on the company’s board.


American spending collapsed by a record 13.6% in April

American consumer spending ground to a halt during the coronavirus lockdown, and that is a massive problem for the spending-addicted US economy.  April’s personal consumption data showed a 13.6% drop in consumer spending, according to a Bureau of Economic Analysis report. That’s equal to $1.89 trillion.  About two-thirds of America’s economy runs on consumer spending, so this doesn’t bode well for the start of the quarter. The steep drop in spending is just the latest sign of an economy in a dire, pandemic-linked recession.



Apparel & Footwear

Luxury fashion brand DVF Studio enters administration

DVF Studio, the UK business of fashion designer Diane von Furstenberg, has gone into administration and has announced the permanent closure of its flagship store on Bruton Street, Mayfair. In a letter to UK clients, von Furstenberg cited the pressure that coronavirus lockdown had taken on the business. Along with its Mayfair store, the company has points of service at several prestigious UK department stores and operates an e-commerce platform. In a statement, DVF Studio’s Finance Director Andrew Stokoe said: “DVF is resetting its business model and that, unfortunately, has resulted in a decision to close our store in Mayfair, London. We are continuing to invest in e-commerce and the platform and remain committed to support our loyal customers in addition to our global network of franchise partners and wholesale accounts.”

Fashion retailer Boohoo buys out stake in Pretty Little Thing

Boohoo has bought out a minority stake in its Pretty Little Thing brand for more than £260m just days after criticism over a potential deal. The online fashion specialist said it was paying an initial £269.8m – potentially rising to £323.8m – for the 34% stake in Pretty Little thing owned by Umar Kamani, the son of Boohoo’s chairman and co-founder Mahmud Kamani, and business partner Paul Papworth. The company said the acquisition would create “significant value for the group’s shareholders” and was an “important further step towards achieving its vision to lead the fashion e-commerce market globally by accelerating full ownership of a brand that is in high growth with enormous growth potential ahead of it”. The deal appears to be an attempt to draw a line under criticism from the hedge fund investor ShadowFall, which this week published a note suggesting that a recent £200m fundraising effort by Boohoo could be handed over in dividends or buyout costs to Umar Kamani. Shares in Boohoo had slumped about 12% since publication of the note.

Shoe retailer Clarks hunts investors to step in

Clarks, the 195 year-old shoe retailer, is in talks about a share sale that would dilute its family shareholders’ controlling stake in the company. Sky News has learnt that the company has approached several private equity firms about a deal, which would involve raising between £100m and £200m from external investors. Sources said the discussions were at a preliminary stage, with the exact sum to be raised and the combination of debt and equity some time from being finalized. If successfully concluded, however, the talks are likely to lead to the Clark family’s 85% shareholding being reduced. News of the discussions comes the day after the company unveiled a strategy – dubbed ‘Made to Last’ – that will aim to steer it into its third century of operation. The plans will involve 900 job losses, with 200 new roles being created.

China’s Apparel Market Expects US$60 Billion Contraction in 2020

More than 75 percent of Chinese consumers reduced or postponed purchases on apparel and footwear and their total spending decreased by 45 percent in the first quarter of 2020, according to Oliver Wyman’s latest survey. The survey also found that there was little retaliatory spending in April and May. The largest apparel market is expected to see a 15 percent contraction in 2020, equivalent to about US$60 billion in market value. On the bright side, the survey found that consumer spending would probably return to its 2019 level in the second half of 2020. “It is going to be a turbulent year, with structural and longer-term shifts in the apparel and footwear market in China,” said Imke Wouters, Partner of Oliver Wyman, who led the survey. “Despite the industry downturn, we are seeing the further growth of e-commerce, with an accelerated penetration into sub-segments, such as high-income customer groups. The post-COVID market is expected to be more polarized across income levels and city tiers.”


Athletic & Sporting Goods

Northland Fishing Tackle Acquires Bagley Bait Company

Northland Fishing Tackle CEO Gregg Wollner announced the acquisition of Bagley Bait Company. The acquisition will grow Northland’s line of product offerings into new markets and product lines. Bagley Bait Company will transition operations to Northland’s headquarters in Bemidji, Minnesota.  Along with Bagley Bait Company, legendary lure designer Jarmo Rapala now joins the team at Northland.


Hudl acquires funding from Bain Capital, plans aggressive investment

Hudl, the Lincoln-based industry leader in sports video analysis, announced an investment from Bain Capital Tech Opportunities.  Financial terms of the investment were not announced; however, Bain is raising $1.1 billion to invest in growth-stage technology companies, according to CNBC.  Hudl CEO David Graff said the infusion of capital will “continue to allow us to accelerate.” Its product is currently used by more than 6 million coaches and athletes in 139 countries. It cut its teeth with high school football but has expanded to dozens of other sports.

Cosmetics & Pharmacy

Pandemic lockdowns mean ugly quarter for Ulta Beauty

Ulta Beauty has reported a fiscal first-quarter loss of $78.5 million as it shuttered its stores and relied on online sales during the coronavirus pandemic. On a per-share basis, the Bolingbrook-based company said Thursday it had a loss of $1.39. Losses, adjusted for asset impairment costs, were $1.12 per share. The results did not meet Wall Street expectations. The average estimate of 12 analysts surveyed by Zacks Investment Research was for earnings of 44 cents per share. The beauty products retailer posted revenue of $1.17 billion in the period, also missing Street forecasts. Ten analysts surveyed by Zacks expected $1.2 billion. Ulta closed all of its stores March 19 and switched to an online-only sales channel. On April 23, it launched a buy online and pickup at curbside format in 70 stores across nine states.

Givaudan to Expand Bio-Engineering Capabilities with Alderys Acquisition

Givaudan has announced the future acquisition of Alderys as part of its long-term strategy to expand its capabilities in bio-engineering technologies. Founded in 2009, Alderys is an innovative French biotechnology company headquartered in Orsay, France, employing 30 people. Alderys develops innovative approaches to the biological engineering of valuable compounds from renewable feedstock. The projects developed by Alderys are aimed at the chemical and cosmetic industry sectors as well as nutrition. They are recognized for offering innovative technological industrial solutions with high sustaina­bility standards. Maurizio Volpi, president of Givaudan’s fragrance division said: “The acquisition of Alderys aligns with our long-term strategy for active beauty and more specifically, their expertise in biotechnology is fully complementary to our fragrance and active beauty businesses.”


Discounters & Department Stores

Nordstrom Q1 loss exceeds half a billion dollars

Nordstrom on Thursday reported that first quarter net sales fell 40% from last year, with all stores temporarily closed beginning March 17 due to the COVID-19 pandemic. Year over year, full-line sales fell 36%, off-price Rack sales fell 45%, and e-commerce rose 5% to $1.1 billion, with new online customer growth of more than 50%, according to a company press release. The retailer experienced loss before interest and taxes of $813 million, from earnings in that metric of $77 million in the year-ago quarter, due to lower sales volume from temporary closures, increased markdowns and $280 million​ in COVID-19-related charges. Nordstrom swung to a net loss of $521 million, including after-tax COVID-19 charges of $173 million, from net earnings of $37 million a year ago.

Fitch downgrades Macy’s on pandemic fallout into next year

Fitch Ratings on Tuesday said it has downgraded Macy’s long-term issuer default ratings to ‘BB’ from ‘BB+’. Fitch’s outlook on the department store giant is negative, according to a press release emailed to Retail Dive. Fitch also said that Macy’s sales this year could decline nearly 30% to $17.6 billion and EBITDA could decline to about $200 million from $2.2 billion, “assuming store closures through mid-May and a slow recovery in customer traffic for the remainder of the year.” While EBITDA “should significantly rebound” next year, that will be undermined somewhat “given Fitch’s expectations of a likely downturn in discretionary spending that could extend well into late 2021,” analysts said.

Walmart says its thousands of tech employees will continue remote work — even when pandemic subsides

Walmart is the latest company to announce that tech workers, who have been working remotely during the coronavirus pandemic, don’t have to return to the office anytime soon — or potentially, ever. In an internal memo sent Thursday, Walmart’s global chief technology officer, Suresh Kumar, told the tech team that office space “will be used primarily for collaboration, to sync up and strengthen camaraderie.” The big-box retailer has about 10,000 tech employees, including many who are based in the Silicon Valley.



Emerging Consumer Companies

Cookware brand Caraway raises $5.3 million seed round

Caraway, a new cookware brand, announced that it has raised $5.3 million in seed funding. The new funding comes from more than 100 investors, including Bonobos co-founder Andy Dunn and PopSugar co-founder Brian Sugar. Caraway has launched with non-toxic, eco-friendly pots and pans. It sells a four-item cookware set that comes with pot and lid holders for $395.

SoftBank slashes WeWork valuation

SoftBank has again lowered its valuation Of WeWork, this time to $2.9 billion, a sharp fall from WeWork’s private valuation of $47 billion in 2019. Later that year, the company lowered its valuation to $10 billion as it delayed its initial public offering. The company said that it has paid rent at 80% of its locations for April and May, and that it has collected rent from 70% of its tenants. While WeWork has kept its offices open, most of WeWork’s tenants are unable to make use of the space due to local restrictions on nonessential workers. The company laid off around 200 employees last month, and is asking employees in more than 800 of its locations to reapply for their jobs under a reorganization effort.

Former Stitch Fix CEO launches The Yes

Former Stitch Fix COO Julie Bornstein has launched The Yes, a women’s shopping platform that she believes will create tailor-made experiences for each user, courtesy of its sophisticated algorithms. Bornstein previously spent four years at Stitch Fix and before that spent years as a C-level executive at Sephora. The company raised $30 million in funding last year from Forerunner Ventures, New Enterprise Associates and True Ventures.

Rent the Runway shakeup

Rent the Runway continues to undergo management changes. The company’s chief technology officer, Josh Builder, will leave at the end of May to go to a healthcare technology company. He had been with the company for four years. Rent the Runway’s president, Maureen Sullivan, left after nearly five years at the end of March.



Grocery & Restaurants

Albertsons to sell company stake to Apollo

Just over two months after filing for an initial public offering (IPO), Albertsons Cos. plans to sell a more than 17% stake in the company to private equity firm Apollo Global Management. Albertsons said Wednesday that funds managed by Apollo affiliates have agreed to buy $1.75 billion of its convertible preferred stock. After the repurchase of a portion of common stock owned by current shareholders, Apollo will hold about 17.5% of pro forma common shares outstanding in Albertsons on an as-converted basis. The transaction is expected to be completed by June 15, pending customary closing conditions, Albertsons said. The grocer is owned by an investment group led by private equity firm Cerberus Capital Management.

Imperfect Foods secures $72 million in Series C funding

Imperfect Foods has raised $72 million in a Series C funding round, to expand its salvage and grocery delivery operations for aesthetically imperfect produce. Founded in 2015, the San Francisco-headquartered company aims to reduce food waste by ‘rescuing’ imperfect or excess products, including vegetables, dairy, shelf-stable goods, meat and seafood. These are then distributed to consumers via its grocery delivery service. The company’s latest financing round, which brings Imperfect Foods’ total funds raised to $119 million, was led by Insight Partners. The round was also supported by existing investors, including Series B lead Norwest Venture Partners. According to Imperfect Foods, the funds raised will be used to support the continued expansion of its delivery service across the US, increase the company’s fulfilment centre capacity and extend its product range. Additional capital will be used to enhance the technology that supports the brand’s mission of eliminating food waste.

Chuck E. Cheese and Applebee’s are delivering food under different restaurant names

Restaurants across the country have tried innovative ways to keep business going amid the coronavirus pandemic. Recently, some eagle-eyed delivery app users thought they were ordering pizza and wings from a new local spot — but were shocked to find that the food was all from a Chuck E. Cheese. Since April, dozens of Grubhub listings for Pasqually’s have been popping up on third-party delivery apps in the Midwest, the South and even in California. They all share an address with a Chuck E. Cheese restaurant. Chuck E. Cheese isn’t the only eatery getting in on the rebranding action via food delivery apps. Social media users have also been reporting that various Applebee’s locations have been delivering under the name Neighborhood Wings.

Home & Road

E-Commerce Sales Aid Lifetime Brands’ Earnings Results

A strong performance from some of its key retail customers and the surge in e-commerce sales resulted in what Lifetime Brands CEO Rob Kay called “solid results” in the company’s first quarter. Consolidated net sales for the three months ended March 31, 2020, were $145.1 million, representing a 3.2% decrease compared to the prior-year period. The company posted a net loss of $28.2 million, compared to a net loss of $4.9 million in the corresponding period in 2019. Adjusted net loss was $5.7 million in 2020 and $4.0 million in 2019. “Lifetime delivered solid results in our core business in spite of the risk of supply chain disruptions early in the quarter and the mid-March closure of several of our customers,” said Kay in a statement accompanying the company’s earnings results. “We achieved these results with strong performance from several of our major omnichannel customers as well as a significant increase in e-commerce sales. When many retailers began to close brick-and-mortar stores in mid-March we did experience a drop off in demand, which was largely offset by increased e-commerce sales as well as increased sales to customers who remained open.”

AutoZone Q3 tops Street amid ‘most extreme fluctuations’ in sales in its history

AutoZone, whose stores remained open during the pandemic, reported third-quarter profit and sales that easily beat expectations helped by stimulus checks that fueled sales late in the quarter. Net income fell to $342.9 million, or $14.39 a share, for the quarter ended May 9, from $405.9 million, or $15.99 a share, in the year-ago period. Analysts had expected earnings of $13.75. Sales inched down 0.1% to $2.779, beating estimates of $2.69 billion. Domestic same-store sales fell 1.0%. “During the third quarter, we experienced the most extreme fluctuations in sales, both negative and positive, in the company’s more than 40-year history,” said Bill Rhodes, chairman, president and CEO. The retailer said the quarter was best described in three, four-week segments.  The first four weeks were strong as both retail and commercial performed well, up mid-single-digit same-store sales. Over the next four weeks, during which COVID-19 had its first impact on business, same-store sales were down materially. During the last four weeks, as federal stimulus checks began to flow through the economy, same-store sales turned “meaningfully” positive.

Comp brand revenue up 2.6% for Williams-Sonoma in first quarter

Williams-Sonoma reported total comparable brand revenue growth of 2.6% in its first quarter ending May 3. The company saw positive comparable revenue growth in almost all brands, including Pottery Barn Kids and Teen at 8.5%, Williams Sonoma at 5.4% and West Elm at 3.3%. Net revenues of $1.235 billion were relatively flat to last year, despite stores being temporarily closed for most of the quarter, and were driven by a significant acceleration in e-commerce revenue growth to more than 30%. “In this highly disrupted environment, we are proud to deliver 2.6% comp growth in the first quarter, despite having all of our 616 stores closed for more than half of the quarter,” said Laura Alber, president and CEO.

Tuesday Morning files for bankruptcy

Off-price retailer Tuesday Morning has filed for Chapter 11 bankruptcy protection—a result, the company said, of an “immense strain” caused by the COVID-19 pandemic. The company, which has secured $100 million in debtor-in-possession financing, said it hopes to emerge from bankruptcy this fall. As required by the DIP agreement, the company is required to obtain a commitment for up to $25 million of additional financing, which the company said it is negotiating. The petition was filed in the United States Bankruptcy Court for the Northern District of Texas – Dallas Division. “The prolonged and unexpected closures of our stores in response to COVID-19 has had severe consequences on our business,” said CEO Steve Backer in a statement. Under bankruptcy protection, Tuesday Morning will close stores and improve its product assortment by focusing on the highest performing stores in its most productive markets, and by sending “the best deals to a smaller number of stores.” It plans to close approximately 230 of its 687 in a phased approach over the summer. It has asked for court approval to close at least 132 underperforming locations in a first phase and, eventually, the company’s distribution center in Phoenix that supports those stores.

Jewelry & Luxury

U.S. Customs Now Says Some Congo Gold Is OK

U.S. Customs and Border Protection (CBP) has modified a September order that said that any gold found to originate from the Democratic Republic of the Congo (DRC) would be automatically held at the border. The CBP said it was making an exception for DRC gold imported by the Chambers Federation. Any gold imported by the group is now admissible at all U.S. ports of entry, effective Thursday. The Chambers Federation is an impact investment firm based in Royal Oak, Mich., that supplies gold to Richline and Signet. Founder Matthew Chambers tells JCK he first applied for the exemption in October and is happy that it has finally been granted. It hasn’t imported any DRC gold since last year, but now plans to brand DRC gold jewelry under the name I Am Origins. “We were able to demonstrate how we’re sourcing, where we are sourcing,” he says.

Rolex, La Californienne Try to Settle Trademark Suit

Rolex and La Californienne, a Los Angeles–based company that has won widespread plaudits for its candy-colored “reimaginings” of watches from Rolex and other brands, have tried to settle a copyright infringement suit brought by Rolex last year, though a California federal court has rejected their first attempt. The two parties’ proposed settlement, presented to the court on May 21, was denied without prejudice by Judge R. Gary Klausner the next day for not fully addressing the two parties’ claims. The proposed settlement seemingly allows La Californienne to continue to sell its souped-up Rolexes, but it forbids the company from publicly identifying the watches as former Rolexes, unless asked, or using any of the symbols or trademarks associated with the Swiss watch giant.

Dominion Diamond Agrees to Sell Assets Back to Owner

Meet the new owner. Same as the old owner. Dominion Diamond Mines, which filed for protection from insolvency in Calgary, Alberta, Canada, court in April, has reached an agreement that would sell its assets back to its most recent owner, Washington Companies. Under the deal, Washington would pay $126 million for substantially all of Dominion’s assets—which include 90% of the Ekati diamond mine, 40% of the Diavik diamond mine, and the Lac de Gras diamond project, all of which are located in Canada’s Northwest Territories. It would also assume Dominion’s operating liabilities and provide Dominion up to $60 million in short-term debtor-in-possession financing. That price is far less than the $1.2 billion Washington paid for Dominion in 2017, which included $550 million in secured debt.


Office & Leisure

Las Vegas is reopening in one week

Detailed housekeeping checklists. Half-empty casinos. Reservations-only dining. No shows, nightclubs or sporting events. These are just some of the realities that travelers can expect when Las Vegas reopens for tourist traffic next week. Put simply, Vegas will be back as of June 4, but it won’t look like the destination we know and love. Like much of the country, the city effectively has been shut down to visitors since mid-March, an effort on the part of casino companies and local officials to slow the spread of Covid-19. Now, after more than 70 days of locked resorts, shuttered restaurants, lap-less lap dances and a deserted Las Vegas Boulevard, Sin City is gearing up to lean into sin again — at least, as much debauchery as one can experience wearing a face mask, sanitizing hands regularly and standing or sitting six feet from everyone else.

Disney World sets reopening date

Disney World will reopen its gates, ending a multi-month closure of the park that left the Walt Disney Company reeling. The Disney theme park, which employs some 70,000 people, plans to begin a phased reopening on July 11 for its Magic Kingdom and Animal Kingdom parks and July 15 for EPCOT and Hollywood Studios, the company said on Wednesday. Walt Disney World as well as Disney’s Disneyland resort in Anaheim, California, closed in mid-March because of the coronavirus pandemic. Disney is implementing several measures to reopen safely and prevent the spread of the coronavirus at its parks. Employees and guests will be required to wear face coverings and undergo temperature screenings before entering the parks. Disney will reduce capacity at the parks and the resort will temporarily suspend parades, fireworks and other events that create crowds.

Canada’s Quebec provides $200 million aid to hard-hit Cirque du Soleil

Cirque du Soleil, its spotlight dimmed by the coronavirus pandemic, will receive $200 million in aid from Canada’s Quebec province, an official said on Tuesday, as part of broader efforts to revive and keep the hard-hit international entertainment group based in Montreal. Quebec Economy Minister Pierre Fitzgibbon said the province has an agreement in principle that would give it the option to buy a majority stake in Cirque if shareholders TPG and Chinese conglomerate Fosun International Ltd decide to pull out. The heavily indebted Cirque was exploring bankruptcy protection in March and laid off almost all of its staff after social distancing due to the coronavirus pandemic forced it to cancel shows. “The arrangement is that when the following shareholders, namely Fosun, the Chinese partner and TPG want to sell, we want the option to buy,” Fitzgibbon told reporters in Quebec City.

A Florida toy importer braces for retail upheaval

Most U.S. states have begun to reopen their economies, but Jay Foreman, chief executive of Basic Fun, said he’s more worried than ever. The Boca Raton, Florida importer sells toys to retailers like Walmart Inc, Target Corp, Inc, TJX Cos Inc, and J.C. Penney Co Inc, many of which were forced to temporarily shutter their stores because of the pandemic-induced lockdown.  About 30% of his customers are still closed. Some U.S. customers have been unable to pay past bills to Basic Fun, but Foreman said his bigger concern is their worsening financial health. “We are worried less about what they owe us today and more about what they won’t buy from us tomorrow,” Foreman said. Foreman expects his sales to fall 20% this year from 2019’s $150 million – an extraordinary reversal from estimated double-digit growth at the beginning of the year.

Technology & Internet

Best Buy’s earnings fall in first quarter, after initial sales surge during pandemic

Best Buy said Thursday that its revenue and earnings fell in the first quarter, despite an initial surge of shopping as customers set up their home offices and prepared for kids to attend school remotely during the pandemic. The retailer’s sales were also affected later in the quarter, as it decided to shut stores to customers and switch to only curbside pickup outside of them. It also temporarily suspended all in-home installations and repairs. Best Buy CEO Corie Barry touted the company’s ability to adapt and keep serving customers, even as it shuttered its stores. She said it retained about 81% of last year’s sales during the last six weeks of the quarter “even though not a single customer set foot in our stores.” “The strong sales retention is a testament to the strength of our multi-channel capabilities and the strategic investments we have been making over the past several years,” she said in a news release.


Mark Zuckerberg announces Facebook Shops, making it easier for businesses to list products for sale

CEO Mark Zuckerberg on Tuesday announced Facebook Shops, which will make it easier for companies to list their products on Facebook and Instagram. Facebook Shops, which is free, will let businesses set up product listings on their Facebook Page, Instagram profile, Stories or in ads, the company announced. In the future, Facebook Shops will also allow businesses to sell products to customers through the chat features of WhatsApp, Messenger and Instagram Direct. They’ll also be able to tag products during Facebook and Instagram livestreams, so customers can click on the tags and be taken to a product ordering page. The company has previously let businesses list products on Facebook and Instagram, but Facebook Shops lets them upload their catalogs once to make them accessible across Facebook’s various apps.


Amazon triples its private‑label product offerings in 2 years Inc. has dramatically increased the number of products it offers from its in-house brands and is expanding aggressively in categories outside of apparel and accessories, according to a new study by retail advisory firm Coresight Research and ecommerce data-gathering firm DataWeave Pvt. Ltd. Amazon now sells 22,617 items from 111 of its own brands, more than triple the 6,825 private-label products it sold in June 2018, the study says. Apparel, accessories and footwear products account for 12,222 of the Amazon-brand products, or 54%. Those categories accounted for three-quarters of Amazon’s own products two years ago, suggesting the online retail giant is expanding its house brands rapidly into new types of merchandise. Among the other categories with large numbers of Amazon private-label products are home and kitchen (3,409 items), grocery and gourmet food (1,820) and home improvement (1,104).

Alibaba sales growth slows as the coronavirus impacts China’s economy

Alibaba Group Holding Ltd. forecast slower revenue growth this year, reflecting the impact of a Chinese economic contraction on the country’s largest online marketplaces. The Chinese ecommerce leader forecast growth in revenue this year of at least 27.5% to more than 650 billion yuan ($91 billion), a deceleration from the previous year’s 35% and below analysts’ estimates. It also reported a better-than-expected 22% rise in March quarter sales to 114.3 billion yuan, but it marks the slowest-ever pace of revenue expansion. Online shopping began to bounce back from March, executives said Friday. But the tepid results demonstrate the world’s second-largest economy has yet to fully shake off COVID-19, with consumers still hesitant about spending on big-ticket items. Alibaba has lost more than $40 billion of market value since the coronavirus first erupted in January, and now has to grapple with not just an uncertain global economic environment but also any potential fallout from U.S.-Chinese financial tensions.


Finance & Economy

Mortgage demand from homebuyers shows unexpectedly strong and quick recovery

It’s not as if the coronavirus pandemic has gone away, but after a sharp pullback, homebuyers are now piling back into the housing market much faster than expected.  Mortgage applications to purchase a home rose 9% last week from the previous week and from a year earlier, according to the Mortgage Bankers Association’s seasonally adjusted index. It was the sixth straight week of gains and a 54% recovery since early April.  The gain mirrors an unexpectedly strong sales pace just reported for newly built homes in April. They were forecast to fall 22% but instead rose nearly 1% for the month, according to the U.S. Census. Buyers are rushing into the new home market, as the supply of existing homes keeps falling to new record lows.


Consumer confidence stabilizes in May after sharp plunge in prior month

The closely followed index of U.S. consumer confidence rose slightly to 86.6 in May from a revised 85.7 in the prior month, the Conference Board reported. This follows rapid declines in the index in March and April. The big picture here is that the net drop in confidence in recent months has been only about three-fifths the size of the collapse before/during/after the crash of 2008, even though the hit to the labor market has been much bigger. We’re guessing that this is partly because people believe the pandemic will pass relatively quickly, and partly because stimulus checks and greatly enhanced unemployment benefits have shielded many people – for now – from the financial consequences of the disaster,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.