Headline of the Week

Authentic Brands Group acquires Hunter IP; Batra and Marc Fisher to Be Licensees

Authentic Brands Group (ABG) has acquired the intellectual property of British footwear brand Hunter. Authentic Brands Group (ABG), the owner of Reebok, Ted Baker and Juicy Couture, will outsource Hunter’s designs and operations following the acquisition. Batra Group, a design, sourcing and distribution company, will become the core licensee in the UK and continental Europe, responsible for designing Hunter footwear, clothing and accessories and operating Hunter’s branded retail stores, wholesale distribution and ecommerce. ABG has also signed an agreement with US-based partner Marc Fisher Footwear, which will take on the brand’s footwear design, wholesale and ecommerce operations in the US. Jamie Salter, founder, chairman and CEO of ABG, said: “At the intersection of fashion and outdoor, Hunter introduces another elevated global brand to Authentic’s diverse lifestyle portfolio. We are also pleased to expand our relationships with two long-standing Authentic partners, Batra Group and Marc Fisher, each of whom has a proven track record of unparalleled expertise in product development across a range of categories and an established network of prominent retailers. We will look forward to working with them and our greater partner network to continue growing the Hunter brand.”

 

 

Apparel & Footwear

Wolverine Worldwide Promotes Chris Hufnagel to Company President, Names New Global Brand Presidents at Merrell & Saucony

Wolverine Worldwide announced several senior leadership changes on Wednesday as the footwear company looks to accelerate its global brand-building efforts. Among the major changes includes the promotion of Chris Hufnagel to president. According to the Rockford, Mich.-based company, Hufnagel will now be responsible for leading and driving strategy across the company’s portfolio of footwear brands, along with leading its consumer marketing and insights teams. He will continue to report to Wolverine’s CEO Brendan Hoffman. A 14-year veteran of the company, Hufnagel most recently served as president of the company’s Active Group, with responsibility for Merrell, Saucony, Chaco, Kids Group and global licensing.  Along with Hufnagel’s promotion, Wolverine has also promoted Janice Tennant to serve as global brand president of Merrell and Rob Griffiths to global brand president of Saucony. Tennant and Griffiths will both report to Hufnagel.

Qurate Retail Sells Zulily To Investment Firm

Regent, a Los Angeles-based investment firm with expertise in the retail and apparel sectors, has acquired online retailer Zulily, formerly a wholly-owned subsidiary of Qurate Retail, which also owns the QVC and HSN businesses and the owner of Cornerstone Brands. The divestiture aligns with Qurate Retail’s Project Athens strategy articulated in June 2022 to optimize its brand portfolio. “Zulily serves an important role for moms by offering a fun shopping experience with brand names and special finds at incredible prices. We are confident Regent is the right partner for Zulily to continue serving its customers while benefiting from Regent’s depth of operational and strategic expertise in the retail and apparel sectors,” said David Rawlinson, president & CEO of Qurate Retail. Regent is a global investment firm that owns and operates several international consumer brands, including Club Monaco, DIM Paris, La Senza, Escada, and DiamondBack. Based on the terms of the sale agreement, there is potential for Qurate Retail to receive an earnout in future years.

Patagonia Accuses Nordstrom of Selling Counterfeit Products in a New Lawsuit

Patagonia is coming after Nordstrom in a new lawsuit accusing the retailer of selling knock-off versions of its apparel. The department store retailer is selling “thousands of counterfeit Patagonia sweatshirts and t-shirts” via its Nordstrom Rack chain, alleges the suit, which was filed in a Los Angeles District Court on Tuesday. According to Patagonia, the sale of these copycat products, which bear fake Patagonia labels on them, hurts the outdoor brand’s brand reputation and misleads consumers about the quality of the merchandise they are receiving. Nordstrom used to have a deal with Patagonia to sell the brand’s apparel in stores. Patagonia recently decided to not renew the deal and discovered the counterfeit products in 2023, the brand said. Patagonia is suing Nordstrom for counterfeiting, trademark infringement, unfair competition, dilution and copyright infringement. Patagonia said it previously asked Nordstrom to recall the products before filing a lawsuit.

Caleres Beats Q1 Estimates Despite Overall Sales Decline

Caleres surpassed analyst expectations for Q1 despite an overall sales decline. Net earnings in the quarter were $34.7 million, or earnings per diluted share of $0.97, compared to net earnings of $50.5 million, or earnings per diluted share of $1.32 in the first quarter of 2022. The company beat analyst estimates for the quarter. The St. Louis-based parent company to Famous Footwear, Allen Edmonds, Sam Edelman and more brands reported overall sales in the first quarter fell 9.8 percent to $662.7 million compared to the same time last year. Jay Schmidt, president and CEO of Caleres, said in a statement that Caleres delivered “solid financial performance” at the upper end of its earnings per share guidance driven by record quarterly profit from the Brand Portfolio and despite a challenging operating environment at Famous Footwear.

Authentic Brands Finalizes Acquisition Of Vince Intellectual Property

Authentic Brands Group has completed the acquisition of the intellectual property of the Vince fashion brand. Through the agreement, Vince Holding Corp. has contributed the Vince intellectual property to a newly formed Authentic subsidiary, ABG Vince, of which Authentic owns a majority stake of 75%, while VNCE retains 25% ownership. In connection with the acquisition, Authentic has also completed an exclusive, long-term agreement with VNCE, which is now the licensing partner for the brand’s core categories, and will manage its 60-plus retail stores, current wholesale accounts and e-commerce operations.

 

 

Athletic & Sporting Goods

Lululemon shares surge after reporting 24% sales growth, raising full-year guidance

Lululemon reported earnings that beat Wall Street’s estimates on the top and bottom lines and raised its full-year guidance, bolstered by improvements in China and freight costs. Here’s how the retailer did in its fiscal first quarter compared with what Wall Street was anticipating, based on a survey of analysts compiled by Refinitiv: Earnings per share: $2.28 vs. $1.98 expected Revenue: $2 billion vs. $1.93 billion expected. The company’s reported net income for the three-month period that ended April 30 was $290.4 million, or $2.28 per share, compared with $190 million, or $1.48 per share, a year earlier. Total comparable sales in the quarter were up 14%.

 

Adidas begins selling off Yeezy brand sneakers, 7 months after cutting ties with Ye

Adidas has begun selling off sneakers that were created in partnership with the artist Ye (formerly Kanye West) before the German sportswear company cut ties with the celebrity.  Adidas says a “significant amount” of money made from its remaining inventory of the “Yeezy” brand sneakers will be donated to organizations that are fighting antisemitism, racism and hate, including the Anti-Defamation League and the Philonise & Keeta Floyd Institute for Social Change, founded by George Floyd’s brother.  Adidas ended its partnership with Ye in October, after he made a string of antisemitic remarks.  It’s still unclear whether Ye will receive any profits from the shoes, which currently range in price from $70 to $260 a pair.

BDT Buys $100M Worth of Under Armour From Kevin Plank

Byron Trott — who enjoys a reputation as Warren Buffett’s favorite banker — is apparently also pretty high on Kevin Plank’s list of people.  Plank, executive chair of Under Armour Inc., sold Trott’s BDT Capital Partners about 16 million Class C shares of the active wear company.  The company said the stock is valued at about $100 million — out of the firm’s current market capitalization of $3.1 billion. Under Armour described BDT as “an affiliate of BDT & MSD Partners, a merchant bank built to serve the distinct needs of business owners and strategic, long-term investors.” The group already owned an undisclosed number of Under Armour shares before the transaction.

Cosmetics & Pharmacy

Ulta Beauty Sales Grow 12.3% Although Theft Is A Serious Concern

Ulta Beauty CEO Dave Kimbell discussed the company’s first-quarter results, with sales up 12.3% compared to last year. Same-store sales were up 9.3% over the previous year. While many retailers have been pulling back and are concerned with a slowdown in consumer demand, Ulta Beauty continues to have strong growth in sales, store traffic, and membership to its loyalty program.  Store transactions were up 11%, while the average transaction value decreased slightly.  The company has experienced higher levels of theft and is challenged to address the issues collaboratively. Retailers in other sectors have similarly raised concerns about increased organized retail crime (ORC) — professional, large-scale theft conducted as a business with goods resold on the black market for financial gain. The National Retail Federation (NRF) reported that the annual merchandise shortage (shrink) amounted to $94.5 billion, and nearly half of the shrink is attributed to ORC. The NRF showed that, on average, retailers experienced a 26.5% increase in ORC compared to last year.

Debut Raises $34 Million in Series B Funding Led by L’Oréal To Create Next Generation of Active Ingredients

Debut, a vertically-integrated synthetic biology company that is spearheading the creation of innovative and novel high-performing active ingredients in beauty, has raised $34 million Series B in a funding round led by Bold, the venture capital fund of L’Oréal.  According to Crunchbase, Debut has now raised a total of $60.2m.  Additional participating investors in the Series B include Fine Structure Ventures, Material Impact, GS Futures, Cavallo Ventures, Cultivian Sandbox Ventures, ACVC Partners, and others.  As part of the strategic partnership with L’Oréal’s venture capital fund Bold, Debut will develop a wide variety of novel ingredients and beauty and personal care products using its proprietary cell-free and biotechnology model, with a view to accelerating the commercialization of this technology across the entire beauty industry.

Virtue Labs Inks New Funding Round, Hires CEO

Hair care brand Virtue Labs has tapped Jose Luis Palacios as chief executive officer at the same time as it has raised a new financing round led by Clearasil and Just for Men owner Combe, its majority shareholder.  Virtue Labs haircare brand offers Alpha Keratin 60ku, a human protein born from regenerative medicine, and has raised $73.5m to date. Palacios takes the reins from Virtue Labs founder Melisse Shaban, who launched the brand in 2017. Shaban, the former CEO of Strivectin Operating Company and Frédéric Fekkai will continue to serve as an adviser to the CEO and the board, according to the company.  Palacios joins Virtue after a long career in the consumer brands industry, including global leadership positions at Procter & Gamble, Coty Inc., and most recently, Google, where he worked in the consumer product goods division.

Talm Raises Investment From Caudalie Founders

Talm ­— the premium French skin care brand for use before, during and after pregnancy — has raised its first round of funding to help bolster expansion.  Mathilde and Bertrand Thomas, cofounders of Caudalie, took a minority stake in the high-end dermocosmetics brand for mothers-to-be and moms. Financial terms of the deal were not disclosed.  Talm is an acronym for “to all the mamas.” It was launched in September 2021 by Kenza Keller, a luxury beauty executive who recently served as Byredo’s international marketing director. Prior to that, she worked at Hermès International in Paris and Guerlain in London.

 

Discounters & Department Stores

Citing progress in Q1, Kohl’s will open new stores, avoid closures

Kohl’s on Wednesday said Q1 net sales fell 3.3% year over year to $3.4 billion, with comps down 4.3%. Inventory declined 6% from a year ago. Gross margin expanded by 67 basis points to 39%, and net income remained flat at $14 million, according to a filing with the Securities and Exchange Commission. The department store opened two stores in the period — one of which was a relocation — and plans another five this year. CEO Tom Kingsbury told analysts Wednesday that all stores are profitable and the company has no closure plans.

Big Lots reports ‘disappointing’ quarter, plans store leasebacks

Big Lots reported a quarterly loss of $206.1 million. The retailer’s net sales fell 18.3% to $1.1 billion compared to $1.38 billion last year. Comp sales were down 18.2% year over year, which the company attributed to the macroeconomic and vendor disruption. CEO Bruce Thorn said the retailer is “being very aggressive in how we are managing our business.” Those tactics include identifying $100 million in SG&A savings and making sure the company retains enough liquidity to weather the current economic climate. Big Lots plans to close four forward distribution centers as a cost-saving measure. The retailer is also leasing back a number of properties, including its headquarters and owned stores.

 

Macy’s slashes outlook after weak Q1

Macy’s Q1 net sales fell 6.8% year over year to $5 billion, with brick-and-mortar sales down 6% and e-commerce down 8%. Overall comps, including concessions, fell 7.9%. By brand, Macy’s comps fell 7.9%, Bloomingdale’s comps fell 4.3% and Bluemercury comps rose 4.3%. Merchandise inventory was down 7% year over year and 16% versus 2019, “reflecting ongoing disciplined inventory management,” per a company press release. Gross margin rose to 40% from 39.6% last year and 38.2% in 2019. Net income fell 45.8% to $155 million. Citing consumer pressures, the department store slashed its guidance. Macy’s now expects net sales to reach $22.8 billion to $23.2 billion, down from its previous expectation for $23.7 billion to $24.2 billion, and comparable sales to fall 6% to 7.5%, worse than its previous expectation for a 2% to 4% decline.

Nordstrom gains steam in Q1, especially in off-price

Nordstrom Q1 net sales fell 11.6% year over year to $3.1 billion as it exited Canada. E-commerce fell 17.4%, in part due to the closure of apparel box service Trunk Club. Full-line department store net sales fell 11.4%, with the wind-down of its Canadian business siphoning 270 basis points. At off-price Rack, net sales fell 11.9%, with the elimination of store-based fulfillment of digital orders hurting sales by about 600 basis points. Gross margin expanded by 110 basis points to 33.8%, reflecting a focus on inventory productivity, according to a company press release. Ending inventory was down 7.8%. The company swung to a $205 million loss, from net income of $20 million a year ago.

Dollar General cuts guidance, shareholders OK safety audit

Dollar General on Thursday reported its first-quarter net sales rose 6.8% to $9.3 billion, up from $8.8 billion in the same quarter last year. But operating profit slid down 0.7% to $740.9 versus $746.2 million year over year. Net income fell 6.9% to $514.4 versus $552.7 last year. The company lowered its full-year guidance, citing a challenging macroeconomic environment that “is having a significant impact on customers’ spending levels and behaviors” The retailer now forecasts net sales of 3.5% to 5% down from 5.5% to 6%, and lower same-store growth and capital expenditures. Shareholders on Wednesday also voted to create an independent audit into worker safety. The Occupational Safety and Health Administration has hit Dollar General with $21 million in fines for worker safety violations since 2017.

 

 

Emerging Consumer Companies

Neat Burger raises $18 million for US expansion

Plant-based food group Neat Burger, backed by Lewis Hamilton and Leonardo DiCaprio, has raised $18 million in a Series B fundraise ahead of its US expansion. The successful fundraise reflects Neat Burger’s progress as a leading plant-based food company, with Formula One champion Hamilton and Chimera Capital reinvesting. The round was led by B-Flexion, a private institutional investment firm founded by Ernesto Bertarelli. Neat Burger’s first US restaurant in New York has beaten sales expectations and is the best performing store in the group’s estate. The company plans to expand further internationally, with restaurants set to launch in Italy and the Middle East.

Passenger secures funding for international growth

Outdoor clothing brand Passenger has secured £15 million ($18.5 million) in funding from Growth Partner and former Gymshark CEO Steve Hewitt to support its international growth plans. The company, which makes products for the outdoors that blend style, quality and sustainability at an attainable price point, has achieved triple-digit growth year on year since 2019 and is on track to achieve £50 million in sales this year. Passenger plants a tree for every order it receives and over 90% of its product range is made with responsibly sourced materials.

Amazon invests $20M in Indian kids fashion brand, Hopscotch

Indian kids fashion brand Hopscotch has raised $20m in a funding round led by Amazon, with participation from existing investors including IIFL Seed Venture Fund, RPG Ventures, Lionrock and Techpro Ventures. The Mumbai-based startup, which competes against the likes of FirstCry, Babyhug and LuvLap, plans to use the funds to expand its offerings and reach with the latest trends in the kids’ fashion category. To date, the startup has raised $71 million.

 

 

Food & Beverage

VC funding for food and beverage plunging amid challenging environment, data shows

Venture capital funding for food and beverage upstarts during the last four quarters — both the amount of money raised and the number of deals —  is down significantly from the same period the year before, according to data provided to Food Dive by PitchBook.  In the first quarter of 2023, there were 1,030 transactions that raised roughly $1 billion, compared to 1,349 deals totaling $1.3 billion in the first three months of 2022. The fourth quarter of 2022 saw an especially profound drop, with 785 deals raising $800 million. At the same time in 2021, 2,316 deals raised $2.3 billion.  The decline comes as challenges in the global economy, rising interest rates and the ongoing war in Ukraine weigh on young companies looking to raise money.

Bacardi Nears Deal To Buy Ilegal Mezcal

Spirits group Bacardi is close to an approximately $200 million deal to purchase Ilegal Mezcal, according to reporting in Bloomberg Finance. The group bought an unspecified minority stake in the major mezcal brand in 2017, granting it national distribution. Alongside private equity firm L Catterton, Bacardi is engaging in conversations to purchase the brand from founder John Rexer.  As well as Bacardi, Ilegal’s existing backers include private-equity firm VMG Partners.  Ilegal has become a major player in the mezcal scene since debuting in 2005. The brand’s identity has leaned into its contraband and bohemian-friendly history, producing a music series as well as launching political campaigns around immigration and LGBTQ+ rights.  The possible deal signals the continued rise of agave spirits. With tequila driving spirits sales, other major spirit groups have brought mezcal and sotol brands into their portfolios. But Ilegal would be Bacardi’s first mezcal, joining tequilas Patrón, Cazadores and Corzo.

Sweeter Than Sugar: Incredo Rebrands and Raises $30M

Israeli food tech ingredient business Incredo LTD, formerly DouxMatok, announced it has closed a $30 million funding round this week which it will use to expand its research, development and commercialization strategy, as well as accelerate commercial partnerships across the U.S. and Europe. Alongside the raise, the company announced it has rebranded in order to bring its flagship Incredo Sugar product front and center.  The round was led by dsm-firmenich Venturing and Sienna Venture Capital with participation from new investor Teseo Capital and existing investors Pitango and BlueRed Partners. The round also saw participation from chocolate and confectionery corporation Ferrero, which is now a “strategic commercial partner” and currently evaluating its ability to use Incredo Sugar in new innovations.  Incredo sugar is made by binding cane or beet sugar to “natural carriers” of sweetness on a molecular level through a proprietary process which results in a clean-label, low sugar ingredient that retains the same level of sweetness as a full-sugar product. According to the brand, Incredo Sugar delivers between 30% to 50% sugar reduction in food applications.

Campbell Soup sells Emerald nuts business to Flagstone Foods for undisclosed amount

Campbell Soup sold its Emerald nuts business to private label CPG manufacturer Flagstone Foods.  Financial terms of the deal were not disclosed.  Campbell acquired Emerald nuts as part of its $4.9 billion purchase in 2018 of Snyder’s-Lance — the largest in the company’s history. The brand generated net sales of $66 million in fiscal 2022 and $46 million for the nine-month period ended April 30, 2023.  The nut brand was an outlier in Campbell’s broader snacking portfolio and made up a small portion of the $8.6 billion in net sales the company recorded in its 2022 fiscal year.

 

 

Grocery & Restaurants

Panera names a new CEO as it prepares to go public

Panera Brands announced that José Alberto Dueñas will be the company’s CEO, effective July 1, as the company prepares for its IPO. Dueñas is currently the president and CEO of Einstein Bros. Bagels, which merged with Panera Bread, along with Caribou Coffee, in August 2021. With this announcement, Panera’s current CEO Niren Chaudhary will move into the chairman position. An IPO will bring Panera back to the public market for a second time. The company was public until 2017 when it was bought by JAB Holdings. The 3,852-unit global company said it generated $4.8 billion in revenue in 2022, most of which came from digital sales, which account for 53% of the company’s mix. Its loyalty program includes 53 million members, while its Unlimited Sip Club program accounts for 25% of all Panera transactions. Dueñas was named president and CEO of Einstein Bros. Bagels in 2019 and has led the company through an operating model simplification strategy that it says has improved the guest experience, unit-level economics and margins. Previously, he served as chief brand officer for Sonic Drive-In and also held leadership positions with Darden Restaurants.

With New Investor, Pinstripes Says it’s Growing Again

Eatertainment chain Pinstripes on Wednesday announced it secured an investment from Granite Creek Capital Partners. The bowling and bocce brand, which focuses on Italian-American cuisine, operates 13 locations. Pinstripes had 10 stores in fall 2019 when it sold a minority state to Simon Property Group. That deal marked the Chicago-based brand’s second strategic partnership in six months following a similar multi-lease/minority equity investment transaction with Brookfield Properties in April. Combined, Pinstripes noted then the agreements represented six future restaurants and $15 million in minority equity. COVID-19, however, stalled an eventful stretch. But Pinstripes, founded in Northbrook, Illinois, in 2007, by Dale Schwartz, who grew up in Cleveland, wanted to open a bowling alley, and owned the Pinstripes name since 1988, said Wednesday’s announcement will kickstart expansion again. Six stores are under construction, the company said, and all project to open within the next 12 months. It will use proceeds from the Granite Creek deal to finance growth.

Why Taco John’s sales have jumped in the past week

Taco John’s trademarked Taco Tuesday in 1989. Taco Bell wants to cancel that. The news of Taco Bell’s petition to do so went viral last week and caught Taco John’s a bit off guard. But the company responded swiftly with an extended Taco Tuesday deal and has no plans of budging on its claim to the phrase. The company has even gone so far as to call Taco Bell a bully. It has become a bit of a David and Goliath situation between the Wyoming-based chain with less than 400 units and the Yum Brands-owned global behemoth. And it’s provided quite a tailwind for Taco John’s, which perhaps wasn’t Taco Bell’s intention. “It’s been really exciting. We think we’re doing some really, really cool things with this and frankly this movement from Taco Bell has given us the opportunity to tell the brand story in a way we couldn’t have imagined,” Taco John’s CMO Barry Westrum said during an interview on the show floor of the National Restaurant Association Show this week in Chicago. In less than a week, the small brand has garnered over 1 billion media impressions globally, for instance. Brand sentiment is now 95% positive, the company has experienced a “significant improvement” in same-store sales growth and traffic in the last week and the app has experienced a 25% increase in downloads.

Home & Road

Pandemic-era highs prove too steep for RH to match in first quarter

While it still posted revenues and net income in the multi-millions, Top 100 retailer RH couldn’t keep pace with numbers from post-pandemic demand. Gary Friedman, chairman and CEO of the Corte Madera, Calif.-based retailer, said revenues of $739 million and an adjusted operating margin of 14.9% exceeded RH’s financial outlook for the quarter. He attributed the slippage to rising mortgage rates, the possibility of continued economic tightening to fight inflation and uncertainty regarding the recent regional banking crisis. “…(W)e expect the luxury housing market and broader economy to remain challenging throughout fiscal 2023 and into next year,” Friedman wrote in an executive statement accompanying the earnings report. For the three months ended April 29, RH posted net revenues of $739.162 million, down 22.79% from $957.292 million over the same period in 2022. Net income for the quarter came in at $41.890 million or $1.76 per diluted share, a drop of 79.13% from 2022’s $200.711 million, or $7.22 per diluted share.

Williams-Sonoma Eyes Renewed Growth After Q1 Hit By Soft Furniture Demand

Erosion in demand for high-end furniture helped drive declines in sales and income at Williams-Sonoma but adjusted earnings per share managed to beat a Wall Street estimate.  Net earnings were $156.5 million, or $2.35 per diluted share, versus $254.1 million, or $3.50 per diluted share, in the year-previous quarter. Adjusted for one-time events, Williams-Sonoma diluted earnings per share were $2.64 per share while the year-before figure remained at $3.50 as the company made no adjustments, the company noted. An analyst consensus estimate published by Yahoo Finance called for adjusted diluted earnings per share of $2.37 and sales of $1.79 billion. Comparable sales slipped 0.4% at Pottery Barn, 15.8% at West Elm, 4.4% at Williams Sonoma, 3.3% at Pottery Barn Kids and Teen, and 6% for the company overall.

Lowe’s Q1 Beats Wall Street Despite Lower Comps

Tough spring weather and weaker lumber prices contributed to a mixed quarter at Lowe’s Cos., yet one in which the company managed to exceed Wall Street expectations.  Net earnings were $2.26 billion, or $3.77 per diluted share, versus $2.33 billion, or $3.51 per diluted share, in the year-prior quarter, the company reported. Adjusted for one-time events, diluted earnings per share came in at $3.67 with no adjustment taken in the year-earlier quarter. Lowe’s beat a Yahoo Finance-published analyst consensus estimate on adjusted diluted earnings per share, pegged at $3.44, and revenues, set at $21.6 billion. Comparable sales slipped 4.3% under pressure from lumber price deflation, unfavorable weather and lower do-it-yourself discretionary sales, the company pointed out.

Ikea stores owner Ingka acquires supply chain software firm

Ingka Investments, the investment arm of Ikea’s franchisee Ingka Group, has acquired Made4net for an undisclosed sum, the retailer announced Wednesday.  Ingka Group will deploy Made4net’s technology across its stores to update its fulfillment and omnichannel operations. With Made4net’s technology, Ikea can speed up its deliveries, accurately fulfill orders and better manage its supply chain, according to the press release. Made4net will continue to operate as an independent subsidiary from its New Jersey headquarters and six international offices. CEO Duff Davidson and the company’s leadership team will remain on staff. Ingka’s Made4net acquisition appears to be part of Ikea’s efforts to streamline its supply chain. In April, the company announced plans to invest more than $2.2 billion in its U.S. omnichannel growth strategy. That funding will go toward strengthening its fulfillment network as well as opening eight new stores, nine plan and order stations and 900 pickup locations.  The investment in its omnichannel strategy could better position it to compete with home decor rivals like Wayfair.

E-commerce a highlight in otherwise challenging Q1 for Conn’s

While it reported declines in revenues and same store sales and a net loss, Top 100 retailer Conn’s HomePlus found e-commerce to its liking during the first quarter of FY2024. The Woodlands, Texas-based retailer reported its figures for the three months ended April 30 and noted that online sales increased 24.6% to a first quarter record of $22.7 million while credit applications increased by 9.7% year-over-year, the first quarter of application growth in 16 months. “After last year’s successful e-commerce platform conversion and recent enhancements to our application process, e-commerce sales increased 24.6% during the first quarter,” said Norm Miller, interim president and CEO. “We also launched our new in-house lease-to-own offering during the first quarter. This positive momentum gives us increasing confidence that the strategies we are pursuing will return the company to growth and profitability. “While we expect a challenging economic landscape to continue throughout the year, we believe we are on the right track to emerge from this period as a stronger, profitable company that is well-positioned to serve the growing needs of our core credit-constrained customers.”

Jewelry & Luxury

Canada Goose to open 3 new US stores

Expanding its footprint, luxury apparel brand Canada Goose is opening three new permanent U.S. stores during the next several weeks, according to details emailed to Retail Dive. Canada Goose will open a location at the Shops at Crystals in Las Vegas on Friday, marking its second store in the city. Additionally, the brand will open a store in Bellevue, Washington, on June 24 — which follows its pop-up in the city in December 2021 — and its first store in Los Angeles on June 30. The West Coast locations arrive as the brand expands its warm-weather product offerings including apparel, lightweight down and footwear. Each store will feature art from the Canada Goose Art Collection, which the brand says is the largest retail collection of Inuit art globally.

De Beers’ Lightbox Brand Opens First “Concept Shop”

On May 25, De Beers’ lab-grown diamond brand Lightbox opened its first concept shop, as a store-within-a-store at House of Showfields in Williamsburg, Brooklyn. It is one of 20 shops within Showfields, an “experiential lifestyle store,” and plans to stay in the space until November. Lightbox—which will have its first-ever booth at the JCK Show in Las Vegas next month, in the lab-grown pavilion—has done pop-up stores in the past.

Movado Sales Slip in Q1 Amid Inflation Woes, Tough Comps

Movado Group had a rough start to its fiscal year 2024 with first-quarter sales down double digits. The New Jersey-based company said it faced a “challenging macro environment” and tough comparables after a record first quarter last year. “Despite this backdrop, our teams continued to execute against our strategic priorities to maximize the power of our brands with exceptional innovation,” said CEO Efraim Grinberg in a statement.

Office & Leisure

Online pet goods retailer Chewy surges on sales forecast lift, Canada foray plans

Shares of Chewy Inc rose nearly 20% in premarket trading on Thursday after the online pet supplies retailer raised its annual revenue forecast and said it would enter the Canadian market. The company posted a surprise profit for the first quarter as its sales benefited from strong customer loyalty, prompting at least two brokerages to raise their price target. In its earnings call, Chewy said it would expand into Canada in the third quarter, as the retailer looks to capture international growth in the fast-growing pet health care market. “Canadian marketplace represents upwards of $15 billion in annual pet sales and is ~10% points underpenetrated online vs. the U.S.,” said Roth MKM in a note. Chewy, co-founded by activist investor Ryan Cohen, was one of the major gainers in the sector after the pandemic triggered a rise in pet ownership. But the demand has normalised from its pandemic-led peak and has also taken a hit from high inflation. The company now expects its full-year revenue between $11.15 billion and $11.35 billion, compared with its prior forecast range of $11.10 billion to $11.30 billion.

LEGOLAND New York Resort Opens LEGO City Water Playground

LEGOLAND New York Resort has unveiled its newest attraction, the LEGO City Water Playground.  The Water Playground allows families to cool off, build and race a LEGO boat, splash on water slides and be doused by a giant 318-gallon water bucket. A nearby changing area allows guests to dry off and continue exploring the Park’s seven LEGO-themed lands. Families can splash and play into the evening at the LEGOLAND Hotel pool, which is also open for the season.

T.I. and Tiny Lose Their Copyright Infringement Lawsuit Against L.O.L Surprise Toy Maker

T.I. AND Tiny have lost their copyright infringement lawsuit against the L.O.L. Surprise! doll maker MGA Entertainment, as a jury ruled in favor of the toymaker on Friday. The rapper (real name Clifford Harris) and Tiny (Tameka Cottle) initially sued MGA Entertainment for allegedly stealing the name, likeness, and trade dress of OMG Girlz — the pop trio Tiny founded in 2009 — when the company launched its “L.O.L. Surprise OMG” dolls in 2019. The case first went to trial in January, but a mistrial was declared after T.I. and Tiny’s lawyer accused MGA of “racist cultural appropriation.” The $100 million lawsuit went back to trial this month, and after arguments related to 31 potentially infringing dolls were made, the jury ultimately needed less than two hours to rule in favor of MGA Entertainment, Legal Affairs and Trials reported. Following the verdict, MGA CEO Isaac Larian called T.I. and Tiny’s lawsuit a “shakedown.”

Technology & Internet

Best Buy shares rise on earnings beat, even as CEO says shoppers are showing ‘recessionary behaviors’

Best Buy on Thursday topped Wall Street’s quarterly earnings expectations, but its sales missed estimates and it reiterated expectations for weaker spending on consumer electronics this year. The retailer affirmed the outlook it shared in March. It expects full-year revenue of between $43.8 billion and $45.2 billion, a decline from its most recent fiscal year, and a comparable sales drop of between 3% and 6%. On a call with analysts, CEO Corie Barry said as shoppers face higher prices for housing, food and fuel, they are making trade-offs by buying some items and skipping others. “We’ve been seeing a consumer who is — whether or not you call it a recession — exhibiting some recessionary behaviors,” she said. But Barry said the Minnesota-based retailer expects the calendar year to be “the bottom for the decline in tech demand.” She said sales will bounce back because households now have far more connected devices than pre-pandemic. The debut of innovative products and the aging of items that customers have at home will spark replacements or new purchases, too, she said.

 

Why Apple’s headset could become first VR success story

On Monday, Apple is expected to announce its first new major product line since the Apple Watch in 2014. During Apple’s software-focused developer conference, WWDC, it could release its first mixed-reality headset, according to analyst research, media reports, and increasingly, vague references from Apple itself. Apple is launching its headset as the broader virtual reality industry sifts through what’s been called a trough of disillusionment. Apple’s headset is expected to be more powerful than what’s out there — even current $6,500 VR headsets. It’s expected to have a 4K resolution screen for each eye and a powerful Apple-designed chip, according to TFI Securities analyst Ming-Chi Kuo. It could also be pricey, retailing for as much as $3,000, according to a note from TD Cowen analyst Krish Sankar, and could only sell in the hundreds of thousands in the first year. By way of comparison, the Apple Watch sold millions in its first year. But many people in the industry believe Apple’s announcement will energize consumers and software developers and bring the technology closer to its ultimate promise: a headset you wear daily, as you go about your business, or perhaps a pair of lightweight glasses, helping you with contextual information. Here’s why Apple could succeed where everybody else has failed.

 

Finance & Economy

Payrolls rose 339,000 in May, much better than expected in resilient labor market

The U.S. economy continued to crank out jobs in May, with nonfarm payrolls surging more than expected despite multiple headwinds, the Labor Department reported.  Payrolls in the public and private sector increased by 339,000 for the month, better than the 190,000 Dow Jones estimate and marking the 29th straight month of positive job growth.  The unemployment rate rose to 3.7% in May against the estimate for 3.5%, even though the labor force participation rate was unchanged. The jobless rate was the highest since October 2022, though still near the lowest since 1969.

 

Mortgage rates are shooting up again, raising homeownership costs

Mortgage rates are climbing again, raising the cost of a home loan to its highest level in seven months.  The average rate on a typical 30-year mortgage is now 6.91%, up from 6.69% a week ago, the Mortgage Bankers Association (MBA) said. The average rate on a 15-year home loan increased to 6.41% from 6.15% a week ago.  Mortgage costs are rising largely because the Federal Reserve’s year-long campaign to tame prices by lifting its benchmark rate has yet to bring inflation close to the central bank’s 2% target, suggesting that more hikes may be necessary.  Home prices are also rising. The median list price grew to $430,000 in April, up from $406,000 at the beginning of the year, according to Realtor.com.

U.S. consumer outlook dims as upscale retailers, discounters slash forecasts

Weak profit forecasts from department store chain Macy’s to discounter Dollar General underscored the fragile health of the U.S. consumer as persistent inflation curbs spending.  Several U.S. retailers said sales have ebbed as consumers react to higher prices for food and other essentials. Broadly, U.S. consumer spending trends showed resilience in the face of high inflation, but big-ticket purchases suffered.  Upscale retailer Macy’s said the U.S. consumer pulled back more than anticipated and slashed its annual sales and profit forecasts for the year. Macy’s and lingerie brand Victoria’s Secret & Co are resorting to more discounts to clear out excess inventory.