We are beginning to count down the months and weeks until the return of the Consensus Great Brands Show (September 13th, at the New York Times TimesCenter in Manhattan, CGBS Website). CGBS is returning for the 10th time, after a pause for COVID, and we are bringing the show back bigger and better than ever.
This summer, we plan to use this space each week to profile a different company that will be taking the stage in September. However, this week, we are previewing an exhibition track that will be brand new to the event, and about which we are very excited.
The Future of Better Living Expo
A new feature of CGBS will be The Future of Better Living Expo in The Great Hall, downstairs from the TimesCenter auditorium. With our recent launches of banking practices in Food & Beverage and Beauty & Personal Care at Consensus, we are using this Expo to highlight emerging brands in these categories that are at the forefront of the Better Living Movement.
The Expo will kick-off with a keynote address by Jason Karp, one of the leading figures in the Better Living movement and founder and CEO of HumanCo. Prior to forming HumanCo in 2019, Jason founded healthy snack brand Hu Products, which he later sold to Mondelez. HumanCo is a leading investment firm backing mission-driven companies that help consumers live healthy, better lives. Recent investments have included True Food Kitchen (wellness-driven dining), Snow Days (frozen snacks) and Against the Grain (grain-free bread and pizza). We are excited to have Jason as part of the CGBS.
The Expo will showcase a number of emerging, on-trend brands in food, beverage and beauty. Attendees will have the opportunity to meet the entrepreneurs behind these brands and sample their products. We also plan to host some interactive events including a demo from a celebrity-led haircare brand and a cooking presentation highlighting up and coming culinary talent. Look for more details on these events later this summer.
We have a few spots left at the Expo for brands wishing to exhibit. If you are aware of brand who may be a good fit, please reach out to me at firstname.lastname@example.org.
Apparel & Footwear
After four years operating in the U.K., Stitch Fix is exploring whether to leave the market in its next fiscal year. This year from the U.K. the company will see $50 million in revenue, about negative $15 million in EBITDA, and about $35 million in SG&A expense, CFO David Aufderhaar told analysts Tuesday. The apparel box e-retailer also said it will close two distribution centers. The company won’t renew its lease in Bethlehem, Pennsylvania, when it comes up this year, and next year will close its Dallas center. That will garner annual savings of $10 million to $15 million, Aufderhaar said. The strategic shifts come as sales continue to fall. Stitch Fix said Q3 net revenue fell 20% year over year to $395 million, as its number of active clients fell 11% to 3.48 million. Net revenue per active client fell 9% to $502. Net loss narrowed to $21.8 million from last year’s $78 million net loss.
Despite newness flowing regularly to its assortment, women’s apparel retailer J. Jill said in a Wednesday earnings announcement that its customers remain “increasingly discerning” with spending decisions. That contributed to first quarter net sales falling 4.9% to $149.4 million versus $157.1 million a year ago. Total company comparable sales — which include comparable store and direct-to-consumer sales — fell by 2.7%. J. Jill’s DTC sales, which represent 45% of company sales, were down 7.7% during Q1. The retailer’s net income fell to $4.6 million from $14.4 million a year ago. J. Jill also said it refinanced its long-term debt, reducing the principal outstanding by about $50 million. Now, the company is focused on investments, like the rollout of a new point-of-sale system. J. Jill expects to complete the new POS launch by the end of fiscal 2023. The new POS system will enable “more seamless transactions across channels and positions us to further enhance our omnichannel capabilities over time.”
Halston is joining the G-III Apparel Group family of designer brands through a 25-year master licensing deal with Xcel Brands Inc. It’s an extended family of big names at G-III — and one that’s going through some big transitions. G-III owns Karl Lagerfeld and Donna Karan, among others and, for now, licenses Tommy Hilfiger and Calvin Klein. But after PVH Corp. decided last year to take back the Tommy and Calvin businesses by 2027, G-III has become intent on controlling its own destiny (and is not keen to put any partner in a position to walk away with what was about half of its revenues again). Enter Halston, which along with a reworked Donna Karan business and a new license for Nautica is part of G-III plans to build for a new future. G-III has the right to buy Halston at the end of the license, which involves an upfront cash payment, future guaranteed minimum royalties and minimum net sales requirements. The company has the right to sign subleases for goods it doesn’t produce, driving royalty revenues.
Esprit is doubling down on its return to brick-and-mortar in the United States. Following the brand’s reintroduction to North America with the opening of a long-term pop-up in New York City’s SoHo neighborhood, the fashion brand has opened a summer pop-up at The Grove in Los Angeles. The 2,360-sq.-ft. store is designed to allow shoppers to fully immerse themselves in Esprit’s “playful, modern, and cool attitude,” the company said. Esprit, a brand that defined California cool in the late 1980s and 1990s before losing momentum, closed all its U.S. stores more than 10 years ago. Esprit was founded in 1969 by Doug and Susie Tompkins (who previously founded The North Face) and Jane Tise. In 1996, they sold their interest to their Hong Kong partner and the company’s headquarters moved from San Francisco to overseas. Esprit has a presence in more than 30 markets around the world and has been listed on the Hong Kong Stock Exchange since 1993.
The parent company of DSW Designer Shoe Warehouse reported profit and revenue that missed estimates and cut its full-year earnings guidance, but said it made progress in its key growth target. In April, Designer Brands said that its owned brands would be the key driver of growth during the next five years, and that it plans to double sales of the brands by fiscal 2026. The company is targeting revenue of $4 billion and earnings per share in the range of $2.75 to $2.85 in fiscal 2026, which ends Jan. 30, 2027. (For the year ended Jan. 29, 2022, net sales totaled $3.2 billion.) In a statement, Doug Howe, who succeeded 17-year company veteran Roger Rawlins as CEO on April 1, said that the company has made “significant operational progress” on its goal of doubling sales of its owned brands by 2026 over 2021, “with our recent acquisitions of Keds, Le Tigre, and Topo Athletic helping to further expand and diversify our brand portfolio.” Owned brand penetration in the first quarter grew to 26.7%
Athletic & Sporting Goods
Nike is reversing course after cutting wholesale ties with several stores and sellers years ago. On Thursday, Designer Brands CEO Doug Howe announced that Designer Shoe Warehouse (DSW) — a company Nike pulled back from in 2021 — is re-entering its partnership with the retailer, beginning in October. DSW will sell a wide variety of Nike products (men’s, women’s and kids’) across its physical and digital channels, Howe said at the earnings call. Under a shift announced in 2017, Nike significantly slashed its number of retail partners to better focus on direct-to-consumer (DTC) sales. As of September 2021, Nike had “exited about 50%” of its retail partners, Nike finance chief Matthew Friend said at the time.
Following the initial launch last October, Lululemon is introducing more digital workouts from Xponential Fitness, the owner of multiple fitness franchises like YogaSix, Pure Barre and Club Pilates, the company announced. Xponential Fitness will release more workouts from Pure Barre, Rumble, AKT and YogaSix on the Lululemon Studio platform. So far, the Lululemon Studio subscribers can access more than 10,000 classes, but the partnership will allow them to access more content from Xponential Fitness brands’ experienced instructors, per the press release. As part of the collaboration, subscribers will also receive discounted rates at the physical Pure Barre, Rumble, AKT and YogaSix locations in the U.S.
Cosmetics & Pharmacy
GetHarley, a London-based telehealth platform connecting consumers with skincare professionals and related products, has successfully raised $52 million in a funding round led by Index Ventures, an existing investor of the company. The platform offers online consultations at a cost of £40 ($50) for a 30-minute session or patients can opt for a more senior-level consultant dermatologist at a fee of £150 ($186). Prior to this funding round, GetHarley had secured approximately $15 million in earlier investments. In the four years since its inception, the company has attracted around 100,000 active users and grown its team to 70 employees. GetHarley anticipates doubling its workforce over the next year.
The partners of the Valencian drugstore chain Druni and the Portuguese distribution group MC Sonae have closed an alliance through which they will create a new giant in the retail sale of perfumery and cosmetic products in Spain with the union of Druni and the Arenal chain. The new group will control close to 450 stores in Spain and will have a business of approximately 800 million euros. After the operation, Druni will be the head of the new group resulting from the integration. It will be 50% owned by a holding company controlled by MC Sonae, in which the founding shareholders of Arenal will have a minority stake; while the remaining 50% will be owned by the Casp family, which controls Druni. The corporate headquarters of the group will be located in Carlet (Valencia). Bernardo Casp will be the CEO of the group resulting from the operation, and as such, he will lead this new stage together with his brother José Casp. Rafael Márzan Vázquez, CEO of Arenal, will also join the management team.
Walgreens opened a redesigned store in a downtown Chicago neighborhood where most of the merchandise is intentionally kept out of sight. The store, located on 2 East Roosevelt Road, at one point offered a typical Walgreens shopping experience – multiple aisles stacked with daily essentials, cosmetics, packaged snacks, health care needs and an in-store pharmacy. Walgreens says it’s a digital-first experimental store to benefit customers. It’s not designed to deter theft, Walgreens says. But retail experts say keeping all merchandise out of reach sure is an effective way to combat rising incidents of shoplifting in America.
Discounters & Department Stores
Macy’s net sales are falling at a time when the company plans to invest heavily in technology over the next three years. Net sales fell 6.8% year over year, according to the Q1 2023 earnings call for the period ending April 29. The retail company slashed its full-year guidance, citing consumer pressures. In March, during the Q4 2022 earnings call, executives laid out a capital spending plan to invest $1 billion in 2023 and up to $3 billion over the next three years, primarily focused on digital and technology projects. CEO and Chairman Jeff Gennette told analysts last week that a cost savings plan devised six months before had been accelerated. The retailer identified another $200 million of cost savings for 2023 and about $300 million to $350 million for 2024, and reduced this year’s CapEx budget by about $50 million, he said.
Neiman Marcus Group on Thursday said it met its own expectations for Q3 and has made progress since before the pandemic. But due to a highly promotional environment and its own excess inventory, “gross margins are challenged,” a spokesperson said by email. Comp sales in both Q2 and Q3 rose 11% compared to 2019, though in Q3 they dropped year over year as the department store “lapped the pent up demand coming out of the pandemic last spring,” the spokesperson said. The luxury retailer said in Q3 it achieved “strong cost management,” double-digit adjusted EBITDA margin and liquidity above $1 billion. Sales of the retailer’s top 50 brands rose 39% from 2019, with luxury customers most engaged and online-only customers less so, the company said.
Walmart’s startup incubator, Store No.8, has teamed up with Outlier Ventures, a Web3 investment firm and accelerator, to launch the Store No.8 dCommerce Base Camp accelerator, according to a Tuesday press release emailed to Retail Dive. The accelerator seeks a cohort of startups that are building Web3 tools to improve the retail and commerce experience. The program will last 12 weeks starting mid-August. Chosen founders will receive mentorship from Outlier Ventures and Store No.8’s team and network, education and seed funding.
Walmart Connect, the retailer’s U.S. advertising division, is beta testing new in-store advertising formats as consumers resume brick-and-mortar shopping “en masse,” according to details shared with Marketing Dive. The big-box store is broadening the availability of in-store demos, which allow marketers to set up product sampling stations to help drive brand discovery and conversion. Walmart called out omnichannel capabilities, like adding a QR code to carts that can link out to custom Walmart.com landing pages. The Walmart Radio Network, a station that broadcasts in stores, is also introducing ads for the first time, letting buyers target their upper-funnel messages to specific locations and markets. Richer in-store offerings follow rivals that are similarly deepening the ways in which brands can engage consumers in the aisles.
Emerging Consumer Companies
Global cookware company Meyer Corporation has acquired New York-based kitchenware brand Great Jones. The women-run company, founded in 2018, is known for its patented designs, including its enameled cast-iron Dutch oven, The Dutchess. Great Jones CEO and co-founder Sierra Tishgart will remain in her role and take on the expanded role of Meyer’s Executive Creative Director. The entire Great Jones team will stay on board, leveraging Meyer’s operational support for product expansion and international retail development.
Candy Funhouse lands Giannis Antetokounmpo
Two-time NBA MVP and NBA Finals MVP, Giannis Antetokounmpo, has announced his equity partnership with Canadian content and confectionary brand, Candy Funhouse. The Milwaukee Bucks All-Star has joined as a shareholder of the brand and will play a significant role in the ongoing expansion of the online candy company. This deal follows on the heels of Candy Funhouse launching their US website, giving American fans the opportunity to indulge in some of Giannis’ favorite candy from around the world.
Bond, livestream shopping platform, launches with 50 brands
Bond, an inspiration-driven shopping platform that focuses on creator influence, launched with over 50 brands and 65 creators, with those initial creators having an audience reach of over 35 million. Traditional marketplaces have creators sharing their story on social media and then selling on separate platforms. With BOND, creators can engage with consumers via either live content or prerecorded content that continues to sell as long as the product is available. Shoppers can check out creator profiles and product discovery. BOND receives a small take rate from brands on each product sold on the platform, a portion of which goes to the creators. The launch follows a $2 million pre-seed investment that closed earlier this year. Nordstar led the round that included participation from Day One Ventures, Nomad Capital and a group of individual investors, including Daniel Gutenberg, Intermix founder Khajak Keledjian, Magic Mind founder James Beshara and Mint House CEO Christian Lee.
Food & Beverage
TreeHouse Foods is spending $100 million to purchase a Northlake, Texas, coffee facility and non-direct store delivery coffee business from Farmer Brothers Company. The transaction is expected to close within the next 60 days. The facility, built in 2017, brings roasting, grinding, flavoring and blending capabilities to TreeHouse Foods, which will complement its existing single-serve pod and ready-to-drink coffee businesses, the private-label food maker said. Along with adding brands, food and beverage makers have been acquiring factories and production capacity to help them expand existing product offerings and meet future increases in demand.
Thesis, a New York-based DTC supplements brand, has raised $13.5 million. The total includes a $5.1 million seed round, which was previously raised but not announced, and a recently closed Series A of about $8.4 million. Investors in the Series A included Unilever Ventures, Redo Ventures, Alive VC, Break Trail, NBA player Kevin Love and model Kate Bock. Proceeds will go toward funding clinical trials, building out the executive team and partnerships, and creating content and a community around the brand.
MyForest Foods Co. has raised $15 million in Series A-2 funding. The funding will enable the company to grow its product MyBacon, which is a mycelium-based meatless bacon product, to more consumers on the East Coast. The company is planning to use the funds to primarily support retail growth and foodservice presence. The funding round was led by MyForest Foods’ parent company, Ecovative Design. In addition to raising $15 million, the company has hired Greg Shewchuck to lead as the new chief executive officer. MyForest Foods Co. started in the alternative meat market in 2020 with MyBacon. MyBacon is a meat-free bacon analogue made with mycelium, the vegetative part of fungus consisting of branching fibers.
Grocery & Restaurants
How much bigger can the world’s largest restaurant company by unit count get? Apparently, much, much bigger. Yum Brands CEO David Gibbs presented at Bernstein’s 39th annual Strategic Decisions Conference Thursday, outlining the company’s growth potential, which he said was “in its infancy.” That’s quite a statement coming from the leader of a company that counts over 55,000 restaurants across four brands in 155-plus countries and territories around the world. But hear him out. Gibbs said Yum is “unique” in that its massive scale creates a virtuous cycle – more stores mean more consumers which means more sales. More sales mean more marketing dollars to woo more consumers. And so forth. How does Yum continue achieving that virtuous cycle in the U.S., specifically? Gibbs said there is a lot of potential for Taco Bell’s breakfast and lunch dayparts, while Pizza Hut’s individual meal occasions and KFC’s extension of handhelds like sandwiches and nuggets are resonating with swiftly changing consumer preferences. Staying connected to consumers and their changing pace, “all sets up nicely for the continued acceleration of growth,” he said. It’s worth noting that Yum’s ambitious algorithm may not only come from just building new restaurants in markets with a lot of white space, but also from additional acquisitions similar to the company’s deal to add The Habit Burger Grill in 2020. “Five years from now, we’ll have a lot more restaurants because we’re going to build a lot more. We’ll probably also have another acquisition or two along the lines of what we did with The Habit,” Gibbs said.
SSCP Management Inc., which owns Cicis Pizza Buffet and Roy’s Restaurants and franchises Applebee’s Neighborhood Bar & Grills and Sonic Drive-Ins, is the lead bidder at nearly $15 million in the bankruptcy court auction for the 138-unit Corner Bakery Café, court documents indicate. The Delaware Bankruptcy Court judge has scheduled a final hearing on the proposed sale of Corner Bakery’s assets for Tuesday, but June 1 court documents said that debtors, in consultation with the official committee of unsecured creditors, “selected SSCP Restaurant Investors LLC as the successful bidder and Corbak Acquisition LLC as the backup bidder.” Dallas-based SSCP has been adding its own brands to what had been a portfolio of franchised concepts. SSCP partnered with Gala Capital Partners to buy the CiCis Pizza brand in a bankruptcy auction in March 2021. SSCP purchased the Roy’s Restaurant brand from Bloomin’ Brands Inc. in 2015.
Subway, the sandwich restaurant, has entered into a master franchise agreement with Shanghai Fu-Rui-Shi Corporate Development Co., Ltd. to expand its presence in mainland China, calling for nearly 4,000 restaurants over the next 20 years. The agreement, funded by a consortium of private investors that include Asia Investment Capital, is the largest master franchise agreement in Subway history, the company said from its Miami offices this week. Under the partnership, Fui-Rui-Shi will grow Subway’s current footprint in the market by more than seven times, the company said. The group will also acquire the exclusive rights to manage and develop all Subway locations in mainland China. “This agreement is a significant milestone in Subway’s international growth strategy as we continue to focus on strategically expanding our footprint and maintaining our position as one of the world’s largest restaurant brands,” said John Chidsey, Subway global CEO, in a statement. “China is a key market with significant long-term growth opportunity, and we look forward to bringing the Subway experience to even more guests in the region.”
California-based Flynn Restaurant Group, the largest franchise operator in the world, has entered into an agreement to acquire Pizza Hut Australia. The deal includes the master franchise license for the country, which has been held by Sydney-based private investment firm Allegro Funds. It also marks the first international investment for Flynn, which counts 2,400 restaurants in 44 states and generates $4.2 billion in sales. This acquisition will add nearly 260 Pizza Hut restaurants on top of its existing 945 U.S. Pizza Huts and is expected to add $300 million in sales. “This is an incredibly exciting moment for Flynn Restaurant Group,” Founder/CEO Greg Flynn said in a statement. “We spent our first 12 years growing in Applebee’s, and then the next 12 years diversifying as a domestic franchise operator. In this next chapter, we’re layering on international expansion, and the growth potential is essentially unlimited.” Terms of the deal were not disclosed. In addition to Pizza Hut, the Flynn portfolio also includes Applebee’s, Taco Bell, Panera, Arby’s, and Wendy’s.
Home & Road
About six years after being founded, luxury candle brand Otherland has been acquired by Curio Brands, according to a press release shared with Retail Dive. Terms of the deal were not disclosed. Otherland joins Curio’s portfolio of other branded fragrances, which includes Capri Blue and Thymes. Otherland — which will remain headquartered in New York City — in 2019 raised about $2.7 million in seed funding. While Otherland has a strong DTC presence, its new owners are not strangers to wholesale. Curio sells its brands through over 11,000 retail locations, including major retailers, independent specialty stores, as well as on Amazon and DTC websites. Otherland also sells through retailers such as Sephora, Nordstrom and Anthrologie, with most candles starting at $36.
RH (formerly known as Restoration Hardware) is moving forward with its ambitious expansion plans even as it reported a decline in first-quarter earnings. The luxury home furnishings and hospitality company’s net income dropped to $41.9 million in the quarter ended April 29, from $200.7 million in the year-ago quarter. Revenue fell to $739.2 million from $957.3 million. “As previously mentioned, it’s times like these that businesses tend to move in herds, pursuing broadly adopted short-term strategies that lead to mostly similar outcomes,” wrote RH CEO Gary Friedman in his quarterly letter to shareholders. “It’s also times like these that present opportunities to pursue long-term strategies that can create strategic separation and significant value creation for those teams willing to take the road less traveled and pursue their own unique path.” Under Friedman’s watch, RH has expanded from a luxury home furnishings retailer with immersive destinations into a growing luxury player in the restaurant and lodging business. It also has a yacht available for charter in the Caribbean and Mediterranean. Customized Gulfstream G650 and G550 planes are also available for charter.
The U.S. Bankruptcy Court for the Southern District of Texas has confirmed Serta Simmons Bedding’s reorganization plan, and the company said it expects to emerge from Chapter 11 in the “near future.” The company, which filed for Chapter 11 protection in January ahead of the winter Las Vegas Market, said it expects to emerge with reduced secured debt from $1.9 billion to $315 million and a lowered annual cash interest expense by more than $100 million. “With the court’s confirmation of our plan, SSB will emerge with the financial resources and flexibility to continue to drive forward our strategic growth initiatives and further bolster our leadership position in the market,” said Shelley Huff, CEO. “Throughout the process, we advanced our strategic priorities by introducing new products, investing in marketing, strengthening retail partnerships, operating a high-performing supply chain and making critical additions to our executive leadership team.
Home furnishings retailer Lovesac saw net sales increase by 9.1% to $141.2 million for its first fiscal quarter of 2024, and comp sales increase by 15.1%. “Despite dampening consumer spending and higher interest rates, Lovesac’s relative outperformance reflects success executing our highly differentiated, customer-centric business model, the loyalty commanded by our Designed For Life product platforms and our stellar operational platform,” said Shawn Nelson, CEO. “While we expect unfavorable macro-economic conditions to continue in the coming quarters, Lovesac continues to operate from a position of strength with a debt-free balance sheet and a proven track record of cost discipline and rigor,” he said.
After a full year of month-over-month declines, furniture has somehow climbed to the top of the U.S. manufacturing sector. The sector as a whole however, continues to sag. The Institute for Supply Management’s May report measured the manufacturing sector at 46.9%, 0.2 percentage points lower than April and the sixth month in a row of contraction. The sector remains in one of its weakest positions since May 2020, which measured 43.1%. “The U.S. manufacturing sector shrank again, with manufacturing index losing a bit of ground compared to the previous month, indicating a faster rate of contraction,” said Timothy R. Fiore, ISM chairman. “The May index reading reflects companies continuing to manage outputs to better match demand for the first half of 2023 and prepare for growth in the late summer/early fall period. However, there is clearly more business uncertainty in May.
Jewelry & Luxury
Signet Jewelers announced it would close as many as 150 locations after its comps fell 13.9% in the first quarter of its 2024 fiscal year (ended April 29). On a conference call following the release of its financial results, Signet’s chief financial, strategy, and services officer Joan Hilson said it was targeting “underperforming” stores, mostly in mall locations. Overall, Signet’s sales fell 9.3% from the same quarter last year, to $1.7 billion. Operating income was $101.7 million, up from $200,000 last year. Signet CEO Gina Drosos blamed the drop on “macroeconomic headwinds that worsened late in the quarter” and an anticipated decline in people getting engaged, due to less dating during the COVID-19 pandemic. But she said that trend should reverse itself by next year.
Citizen Watch America is opening its first multi-brand flagship in North America, setting up shop in New York City’s famed Rockefeller Center. The company is best known for its accessibly priced watches, with Citizen, Bulova, Accutron, Frederique Constant, and Alpina filling out its brand portfolio. The new store will be located at 605 Fifth Avenue, one of Manhattan’s top shopping streets, sharing the avenue with fellow watch brands TAG Heuer, Cartier, Rolex, Omega, Hublot, and Breuget. “New York City is a cultural epicenter bringing together all citizens of the world, and the ideal backdrop for Citizen Watch America to introduce our first U.S. based, multi-brand flagship,” said Jeffrey Cohen, president of Citizen Watch America. “Celebrating the spirit of Citizen Watch’s DNA and expertise in horology while translating the company’s rich heritage through experiential retail, we are proud to bring our brands to life in a new way for all watch wearers of the world.”
“I wish you well.” Gwyneth Paltrow may have had the last word at the conclusion of her ski accident trial in March, but it was her head-to-toe “old money” look that is still echoing through society today. Also buoyed by the elite world depicted in HBO’s “Succession” and Kim Kardashian’s monochrome mega mansion, the “quiet luxury” trend has quickly caught on, even though, these days, most Americans are more likely to live paycheck to paycheck. What is quiet luxury? Marked by expensive materials in muted tones, quiet luxury, also known as stealth wealth, is “the complete lack of logos and anything too conspicuous,” said Thomaï Serdari, professor of marketing and director of the fashion and luxury program at NYU’s Stern School of Business. “Luxury brands rely on the quality of the materials, and they have techniques that are very particular to them,” she said, such as the cut, stitching or other small details only recognizable to those who are very familiar with a particular item. “That becomes a differentiator for those in the know,” Serdari said.
Office & Leisure
A new tenant that happens to be America’s fastest-growing sport is moving into vacant retail spaces in the nation’s shopping centers. Pickleball — a cross between tennis, badminton and table tennis — has seen explosive growth in the U.S., with a growth rate over the last three years of 158.6%, according to a report by JLL. With a setting that often includes food offerings, pickleball is proving to be a fun — and potentially lucrative — “eatertainment option,” the company said. In addition, its large footprint (as high as 80,000 sq.ft.), positions pickleball to be an attractive option for backfilling empty mall anchor space, JLL noted. Malls aren’t the only ones getting aboard the pickleboard train. Robert Thompson, founder of Punch Bowl Social, is planning a new concept called Camp Pickle.
Joann reported a tough first quarter as consumers cut back on discretionary purchases. The sewing and arts-and-craft retailer posted a net loss of $54.2 million, or $1.31 a share, compared with a loss of $35.1 million, or $0.86 a share, in the year-ago period. Net sales declined by 4.0% to $478.1 million, missing estimates of $480.6 million. Total comparable sales also fell 4.0%. E-commerce sales were down 1.0% compared to last year and accounted for 11.8% of revenue in the first quarter, a 30-basis point increase in the penetration rate over last year. Joann is on the hunt for a new CEO following the retirement of Wade Miquelo in May. While the board searches for a replacement, Chris DiTullio, executive VP and chief customer officer, and Scott Sekella, executive VP and CFO, are leading the “interim office of the chief executive officer.”
GameStop CEO Matt Furlong has been terminated and Ryan Cohen has been appointed executive chairman of the board. Furlong — who was not mentioned by name in a company press release Wednesday — had served in the chief executive role since June 2021. GameStop’s 10-Q filing with the Securities and Exchange Commission on Wednesday says Furlong was terminated Monday. Cohen’s executive chairman responsibilities include capital allocation and overseeing management. The investor and Chewy founder joined GameStop’s board of directors in January 2021 after cutting a deal with Cohen’s investment firm RC Ventures. The gaming company canceled its quarterly earnings call Wednesday, instead referring stockholders to its SEC filing. GameStop reported its first quarter net sales decreased year over year from $1.38 billion to $1.24 billion. Meanwhile, its net loss dropped from $157.9 million to $50.5 million.
Omnichannel dog brand Bark, known for its BarkBox and Super Chewer pet subscription boxes, reported fourth quarter net losses narrowed to $14.2 million from $36.7 million last year. Total revenue for the quarter decreased 2% year over year to $126 million, $5 million ahead of the company’s guidance, according to a company press release. For the full year, the company saw revenue increase 5.5% year over year to $535.3 million. Net loss for the year narrowed by nearly 10% to reach $61.5 million. Founded by CEO Matt Meeker in 2012, Bark had been in expansion mode since being acquired by Northern Star Acquisition Corp. and going public in 2021. Meeker left his role as CEO in 2020 but returned 16 months later in early 2022 after the company’s bottom line suffered with excess inventory and the pains of expanding too quickly to meet the needs of an industry that had mushroomed during COVID.
Technology & Internet
Apple’s new Vision Pro headset has sparked a resurgence of interest in head-worn computers that immerse users in a virtual world. Engineers have been dreaming about virtual reality since 1968 when a professor at the University of Utah built the first 3D VR headset, and since then some of the most powerful consumer electronics companies have released headsets, including Nintendo, Microsoft, Meta, Google, and Sony. None have been a hit. Now Apple’s at the table and virtual reality experts and developers say it has a chance to succeed where others haven’t. “When people ask me what’s really special about this announcement, in one word, it’s Apple. The largest tech company in the world and also the most responsible,” said Ori Inbar, co-founder of Superventures and the CEO of Augmented World Expo, an industry conference. “They always put everything behind every product they put out there. And that’s exactly the message they’re sending to the XR industry, but also to everyone else out there.” Apple’s reputation and record afford it the benefit of the doubt when it comes to genuinely new technologies, and many consumers already own and like Apple’s products.
Amazon is in talks with several wireless carriers about launching a mobile service for Prime members, according to a report from Bloomberg. The e-retailer is negotiating with Verizon, T-Mobile and Dish about the possibility of reselling their mobile services to its Prime members at low cost or potentially free, Bloomberg reported. The discussions have been going on for six to eight weeks and have also included AT&T, but it could be several more months before a plan materializes, according to the report. “We are always exploring adding even more benefits for Prime members, but don’t have plans to add wireless at this time,” Amazon spokesperson Bradley Mattinger said in a statement. Amazon has previously experimented in the mobile category, launching its ill-fated Fire Phone in July 2014 before scrapping it a year later. More recently, it has focused on high-speed internet through its Kuiper program, which aims to build a network of 3,236 satellites in low Earth orbit. A mobile plan could serve as an attractive hook for Amazon to lure in more Prime subscribers. Launched in 2005, Amazon Prime members pay $139 a year for access to free two-day shipping, access to exclusive movies and TV shows, as well as newer benefits like generic prescription discounts and Grubhub delivery perks.
Finance & Economy
Despite a rise in consumer spending, U.S. container imports are expected to be 22% lower in the first half of 2023 compared to the same period last year, according to the latest Global Port Tracker report released by the National Retail Federation (NRF) and Hackett Associates. The report highlights disruptions occurring at West Coast ports, although these incidents have not yet had a widespread impact on nationwide data. NRF earlier this week issued a statement calling on the Biden administration to intervene following reports of disruptions at terminals at the Ports of Oakland and Long Beach. The disruptions have come as the International Longshore and Warehouse Union and the Pacific Maritime Association have failed to reach a new labor agreement after more than a year of negotiations.
U.S. consumer confidence declined in May amid pessimistic views of the current and future economic situation. The Conference Board’s consumer confidence index fell to 102.3 in May from an upwardly revised 103.7 in April. The Present Situation Index, which measures consumers’ outlook on current business and labor market conditions, fell to 148.6 from 151.8 in April. The percentage of respondents who said current business conditions are “good” was up to 20 percent from 19 percent in April, while those who said conditions were “bad” decreased, down to 17 percent from 18 percent.