In prior issues of the Big Story, Consensus partners Billy Busko, Betsy White and Abigail Hitchcock discussed the emergence of the metaverse as a new channel for brands, with gaming as an on-ramp to a future digital world anchored in blockchain technology. It’s relatively easy to imagine how fashion and lifestyle brands will capitalize on the metaverse, but CPG? Will consumers really need a virtual bar of soap or gallon of milk? Probably not, but that’s not the point. Forward looking CPG brands will find the Metaverse a lucrative place to engage.

Think of the Metaverse not as a single place, specific technology, nor unique platform but as a concept viewed through the lens of a consumer or a brand. For consumers, the Metaverse represents new ways to work, play, connect, transact and more – it’s the next evolution of how we integrate new technologies, virtual worlds, AR/VR/XR, NFTs, gaming, and blockchain (often referred to as Web3) into all aspects of our lives.

For brands, ​​the Metaverse represents new ways to target, engage, enable and transact. Interactions with consumers will be more experiential than traditional marketing, changing brand building and the path to purchase as consumers move from simply being receivers/viewers of information to participants, owners and creators.

So how does CPG activate? First, by understanding that experience, access, community, self-expression and ownership are core reasons why consumers are in the metaverse and then figuring out how to authentically engage.

Brands can enable consumers to have experiences that are new or better. If you’re into horse racing, now you can own and race your own digital horse as Stella Artois enabled consumers to do partnering with ZedRun. Brands can leverage NFTs to offer access in unique ways, unlocking products and rewards, as Clinique did with MetaOptimist in their effort to modernize loyalty. Brands can better engage with consumers by enabling them to be part of a community like Unilever’s Hellmann’s condiment brand did working with Animal Crossing: New Horizons to build a brand-sponsored island. Brands can help consumers self-express their identity, as Coca-Cola did with part of their Friendship Box supporting the Special Olympics. Purchasers of the NFT received a “custom-designed Coca-Cola Bubble Jacket wearable, illuminated with effervescent fizz, purposely featuring a futuristic look with subtle nods to Coke’s nostalgic delivery uniforms.” Finally, consumers can connect and make their voices heard in new ways. For instance, gmgn supply company is building a DAO (decentralized autonomous organization) of 100 community-based CPG brands, where members will be able to participate in and vote on decisions for product selection, branding, pricing, product development, and more.

Similarly to when brands added the internet to their existing marketing plans in the late 90’s, and then later added social/local/mobile, they are now going to need to add the metaverse and be thoughtful about concepts such as collaborations, community, interoperability, identity and co-creation. More traditional channels such as TV, print, in-store, social and more won’t go away, but as the next generation of consumers emerge, they will change. Not only in terms of their reach and effectiveness, but also in how they complement, drive, or take a back seat to experiential engagements that brands have with consumers in virtual worlds. Now is the time to learn what works for your brand(s).

About the Author: Jon Corshen is Co-Founder of Pilot44, one of today’s most sought-after corporate innovation studios helping world class brands such as P&G, Hershey’s, Diageo, Pepsi, Clorox and more implement new, more modern approaches to business and innovation.

Headlines of the Week

Blue Nile plans to go public through merger with SPAC Mudrick Capital

Blue Nile Inc. plans to become a publicly traded company following an agreement to combine with special purpose acquisition company Mudrick Capital Acquisition Corp. II. Mudrick Capital MUDS, +0.01% has traded as a SPAC on the Nasdaq since Jan. 29, 2021, and terminated, “by mutual agreement,” plans announced in April 2021 to merge with trading card company Topps Co. Blue Nile has sold fine jewelry and diamonds online since 1999. With an expected closing in the fourth quarter, the resulting company will be named “Blue Nile,” and retain Blue Nile Chief Executive Sean Kell and his management team. Blue Nile and Mudrick said the deal is expected to raise $450 million before expenses, with $50 million in new funds from Mudrick and $80 million from sponsors Bain Capital Private Equity, Bow Street, and Adama Partners.


Recycled cotton company Recover raises $100M in funding led by Goldman Sachs

Taking a step toward creating a more low-impact clothing industry, recycled cotton fiber company Recover has raised a $100 million minority equity investment led by Goldman Sachs Asset Management, according to a press release. Goldman Sachs has invested alongside majority shareholders Story3 Capital Partners. Recover, which creates recycled cotton fibers and blends for new apparel from textile waste, intends to use this investment for global expansion and increased production capacity. It currently works with companies such as Revolve, Lands’ End and Primark, per the release. Goldman Sach’s investment shows the increasing interest in dealing with a large environmental problem — post-industrial and post-consumer textile waste from the fashion industry — while still creating a way for businesses to produce.  The new capital values the company at $1.1 billion, according to multiple media reports.



Apparel & Footwear

Rent the Runway revenue doubles in Q1 as women dress up again

Surprising some analysts, Rent the Runway doubled its revenue in Q1, from $33.5 million last year to $67.1 million, according to a company press release. Its active subscriber base rose 82% to 134,998 by quarter’s end, a 17% increase from the previous quarter and its highest end-of-quarter count. Gross profit rose 178% to $22.5 million, as gross margin expanded to 33.5% from 24.2% a year ago. The company’s net loss widened from $42.3 million last year to $42.5 million. Before the pandemic, Rent the Runway had begun to expand its market by offering more office-appropriate options, but its momentum right now is being driven by special occasion dressing. During the quarter, Rent the Runway launched six new exclusive collections, with plans for almost 20 such partnerships this year — on track to becoming 60% of the company’s product acquisition mix this year. The company is aiming for those exclusive to become two thirds of its assortment, part of its plan toward free cash flow profitability.

After raising millions, Austin boot maker Tecovas is making changes at the top

After raising millions of dollars for expansion, Austin-based cowboy boot and western apparel company Tecovas is bringing in new leadership. Paul Hedrick, who founded Tecovas in 2015, will leave his CEO position this month and become the company’s executive chairman. The company’s new CEO will be David Lafitte, who is currently chief operating officer at Deckers Brands, which operates brands including UGG, HOKA, Teva, and Sanuk. In January, Tecovas raised $56 million to expand the company with new retail stores. Before opening its first location on South Congress Avenue in 2019, the company generated all of its revenue from online sales. Tecovas currently operates 20 stores in 10 states. With the new funding, the company plans to open 15 stores in the next 18 months. The company has raised $120 million to date. The most recent investment was led by Elephant, a venture capital firm founded by eyewear retailer Warby Parker co-founder Andy Hunt.

Forever 21 takes third crack at China with new bricks and mortar store

American fast fashion retailer Forever 21 is making its third tilt at the China market, with plans to open a physical store in the country later this month. The youth-focused, fast fashion retailer quietly re-entered the Chinese market last August, at first selling exclusively online via platforms such as Vipshop and Pinduoduo and later opening a store on Alibaba’s Tmall marketplace. More recently, Forever 21 began making more noise on social media, with an online campaign to advertise its offerings in the “618” festival, China’s major mid-year e-commerce sales event. The brand first entered the China market in 2008, before leaving a year later. Its second run at China’s growing fashion market began in 2011. Forever 21 had a network of 11 physical stores around the country – including flagship outlets in Shanghai and Beijing – which lasted till 2019, a year in which it left multiple markets including China and filed for bankruptcy. Forever 21 was acquired by Authentic Brands Group (ABG) in 2020. ABG signed a licensing agreement with Hong Kong’s Lasonic Electric Xusheng Co. Ltd. and its subsidiary, Xusheng Electrical (Shenzhen) Co. Ltd., to manage Forever 21’s China operations.

Old Navy struggles with demand planning due to supply chain delays

Old Navy is rebalancing its inventory mix after shipping delays impacted demand planning, leaving the company with excess product that is “out of sync” with consumer preferences. Lower-than-expected demand for the retailer’s size-inclusive line also exacerbated excess inventory levels. Old Navy will scale back its selection of inclusive sizes and has already “canceled a significant portion of extended sizes” for Q3, Gap CEO Sonia Syngal said. Old Navy had been working to place orders earlier with vendors to ensure on-time deliveries after port congestion caused lengthy delays and pushed the retailer to rely more on airfreight, executives said in November. But the retailer’s quest to lower freight costs and improve delivery times left it out of touch with current fashion trends. Old Navy expects to improve its inventory assortment in the fall and in time for the holiday season. But failing to capitalize on women’s fashion trends carries consequences for the rest of the business, which is a major retailer of kids and baby clothes.



Athletic & Sporting Goods

Fleet Feet to Acquire Marathon Sports

Fleet Feet, the largest franchisor of locally owned and operated running stores, announced that it has agreed to acquire New England-based running retailer Marathon Sports and its soundRunner and Runner’s Alley brands. The transaction, which includes Marathon Sports’ e-commerce business, is expected to close this July and coincide with the retirement of current Marathon Sports owners Colin and Penny Peddie.  Per the deal, Marathon Sports will remain a wholly-owned subsidiary and continue operating as a separate entity under the Marathon Sports, soundRUNNER and Runner’s Alley names, respectively. Marathon Sports’ leadership team will remain unchanged and continue operations out of its Waltham, Mass., headquarters. Each location will continue use of its current store name in all branding, marketing and community outreach efforts. Financial details will not be disclosed.


Adidas is suing Nike over its apps and Adapt sneakers

Although Adidas and Nike have been in and out of court several times over the years, Adidas has taken it to a new level.  The company filed its first federal lawsuit against Nike, alleging that its rival infringed on nine of its patents relating to smartphone apps and adjustable shoe tech.  Initially reported by Reuters and Complex, the lawsuit pertains to a number of Nike’s digital products. Adidas claims that the Nike Run Club, Training Club, and SNKRS apps infringe its patents related to features like audio feedback during workouts, GPS tracking, training plans, integration with third-party accessories like heart rate monitors, and the ability to reserve and buy limited-edition sneakers. These are basic features on several running and fitness tracking apps, and this isn’t the first time Adidas has gone to court over it. In 2014, Adidas sued Under Armour over its Map My Fitness app. The two companies eventually settled, with Under Armour agreeing to pay Adidas a licensing fee.

Core Health & Fitness Acquires Jacobs Ladder

Core Health & Fitness LLC, Vancouver, Washington, has acquired Jacobs Ladder, according to a June 7 announcement from Core Health. Financial terms of the transaction were not released.  This is the second acquisition for Core Health in 2022. It acquired Wexer in April.  Core Health & Fitness is a portfolio company of US-based private equity firm Gainline Capital Partners LP. Core’s brands include StairMaster, Schwinn, Nautilus, Star Trac, Throwdown and Wexer.  Jacobs Ladder makes ladder climbing fitness products, including Jacobs Ladder 2, Jacobs Ladder X, Stairway and Stairway GTL.  As consumers return to in-person workouts at gyms, Core is experiencing record year-over-year commercial fitness growth, according to Core President Jason Leone.

Full Stack Supply Acquires Snowboard Brand United Shapes

Full Stack Supply Co. (FSSC) announced the acquisition of the United Shapes brand from Chiller USA Outfitters. The terms of the deal were not disclosed.  United Shapes was founded in 2014 by Gray Thompson, Steven Kimura and Peter Sieper.  “We created United Shapes to bridge the space between snowboarding’s past and its future,” said Kimura. “We’re deeply grateful to everyone who ever set foot on our shapes.”  “This acquisition represents an opportunity to amplify the brand we love to a truly global audience while staying true to our core and bringing the grand vision of United Shapes to life,” said Gray Thompson, brand manager.”  As part of the acquisition, United Shapes will revamp its collection for 2023/24 with an early release of select snowboards for the season.

Cosmetics & Pharmacy

Revlon, beauty icon in crowded market, files for bankruptcy

Revlon, a cosmetics maker that broke racial barriers and dictated beauty trends for much of the last century, has filed for Chapter 11 bankruptcy protection. The company has been a mainstay on store shelves since its founding 90 years ago in New York City, overseeing a stable of household names, from Almay to Elizabeth Arden. But Revlon failed to keep pace with changing tastes, and was slow to follow women as they traded flashy red lipstick for more muted tones in the 1990s. In addition to losing market share to big rivals like Procter & Gamble, newcomer cosmetic lines from Kylie Jenner and other celebrities successfully capitalized on the massive social media following of the famous faces that fronted the products. Already weighed down by rising debt, Revlon’s problems only intensified with the pandemic as lipstick gave way to a new era in fashion, this one featuring medical-grade masks.

Brazil’s Natura announces restructuration plan and new CEO

After several harsh months in the stock market (the group’s shares have fallen by almost 77% in less than a year) Natura & Co wants to reorganize its structures. The Brazilian giant is set to increase the autonomy and accountability of its brands — Natura, Avon, The Body Shop, and Aesop — and transition to a simpler holding company structure. To this end, Natura has appointed Fabio Barbosa as its new CEO. He will be in charge of defining the new corporate structure over the next months. Roberto Marques, current Group CEO and Executive Chairman, is stepping down from these roles.

iBeauty Brands Acquires Luxury Hair Tools Brand Sultra

iBeauty Brands is expanding its portfolio through the acquisition of Sultra hair tools. Sultra was founded in 2008 by veteran hairstylist Dana Story, who brought the first clipless styling wand to market. Over the years, Sultra introduced a wide range of affordable hot tools designed with stylists and at-home users in mind. iBeauty Brands’ mission is to offer innovative hair tools and cutting-edge beauty technology that meet the demands of professionals while providing consumers with high-performance solutions that deliver results. The company’s current portfolio includes high-performance hair tool brand Sutra Beauty, luxury hair tool brand Adagio, and professional hair tool brand Soleil.


Discounters & Department Stores

Family Dollar to shutter distribution center FDA flagged as rodent-infested

Dollar Tree temporarily closed more than 400 of its Family Dollar stores after Food and Drug Administration regulators flagged an Arkansas distribution center as rodent-infested in February. The closures fueled a year over year dip in same-store sales for the Family Dollar segment, executives said on a May earnings call. Family Dollar issued a voluntary recall on Feb. 18 of products stored and shipped from its West Memphis, Arkansas, facility since Jan. 1, 2021, due to the presence of rodents and potential Salmonella contamination stemming from the infestation. Stores in six states closed temporarily “to permit the removal and destruction of inventory subject to the Recall,” Dollar Tree said in its quarterly report. Those stores have since reopened. The 30-year-old distribution center will be permanently closing as it is “no longer part of our go forward strategy,” President and CEO Mike Witynski said on an earnings call last week. “We are relocating stores to other DCs to fulfill the store deliveries and have sufficient capacity to serve all stores in our remaining fleet of distribution centers,” Witynski said.


Inflation-Battered Americans Get Chance to Go Bargain Hunting

A nationwide inventory glut has led to unexpected bargains for US shoppers, especially for goods that used to be hot sellers during the pandemic. The discounts stand out as Americans grapple with a 40-year high in inflation, which has raised prices from the gas pump to the grocery store. The likes of Walmart Inc., Target Corp. and Gap Inc. have slashed prices on non-essential items they stocked up on but shoppers are no longer clamoring for. Lower demand for big-ticket items contributed to US retail sales posting their first drop in five months on Wednesday. That means deals on furniture, televisions, home goods and some clothing. Walmart and Gap’s Old Navy are also trying to keep prices low on certain basic items so they don’t alienate shoppers with limited budgets. “If we think about the most value-conscious customer group, we’re watching that group,” Walmart Chief Executive Officer Doug McMillon told analysts in early June. “How is that group behaving and what do they need from us?”


Walmart launched a lot of apparel and home brands. Now, that strategy will be put to the test

Dressed-up mannequins. Eye-catching displays of sleek furniture and colorful swimsuits. And store signs that promote exclusive brands and nationally recognized ones. Walmart’s redesigned SuperCenter, located just 16 miles from its Northwest Arkansas headquarters, reflects the retailer’s ambitions to get more customers to turn to its stores and website to fill their closets and living rooms, along with their fridges. It is the retailer’s new model, and it will soon spread across the country. Walmart plans to open 30 more redesigned stores by late January and hundreds more in the following fiscal year, Chief Merchandising Officer Charles Redfield said. He said the locations will vary slightly and will have different elements of the pilot store. They’ll be used to test and learn before Walmart rolls out the look more widely, he said.



Emerging Consumer Companies

Magic Spoon, better-for-you cereal company, raises $85 million

Magic Spoon, the New York based cereal company launched in 2019 and sold 100% direct-to-consumer. Since then, the brand has landed on shelves at several national retailers, including Walmart and Target. This week, the company announced its $85 million Series B, led by HighPost Capital.  Coefficient Capital and Siddhi Capital, as well as several celebrity investors, including Shakira and Odell Beckham Jr., participated in the round.  Magic Spoon said it will use the funding on brand building, product innovation, and continuing to expand the brand’s retail presence.

Fellow, coffee brewing equipment brand, raises $30 million

Fellow, a California-based coffee brand, has raised a $30 million round. Bootstrapped until 2021, the company grew its roots on Kickstarter, launching its Duo coffee steeper on the platform in 2013, its Stagg electric pour-over kettle in 2016, and its Ode grinder in 2019. More recently, the company expanded its offering to include packaged coffee via an online marketplace. The $30 million round, led by NextWorld Evergreen, will enable the brand to expand its branded retail store portfolio and focus on product innovation.



Food & Beverage

Ferrero announces $214.4M second Illinois plant expansion

Eight months after announcing a 70,000-square-foot expansion to its manufacturing center in Bloomington, Illinois, Ferrero North America announced Monday an investment of up to $214.4 million to further expand the still-under-construction plant. The newer 169,000-square foot expansion will be dedicated to producing Kinder Bueno premium chocolate bars and will create up to 200 new jobs over a four-year period. The expansion will be one of the largest production lines Ferrero has built outside of Europe.

Beverage brand Cirkul hits $1 billion valuation on latest capital raise

Flavored-water cartridge and reusable bottle start-up Cirkul has raised US$70m in investment, as the beverage company seeks to tap into growing demand for sustainable hydration solutions.  The Series C fundraise – led by private-equity firm SC Holdings – values the company at US$1bn. The capital raised will be used to support Cirkul’s plans for growth, including recent nationwide launches in Walmart and Bed, Bath & Beyond retail outlets.  Cirkul’s product offer comprises a range of re-usable water bottles fitted with flavor cartridges that enable the drinker to adjust the strength of their drink on a sip-by-sip basis. The cartridges are available in 50 different flavors and contain zero sugar or calories. Cartridges can be ordered on a one-off or subscription basis, and the company claims its offer produces 84% less plastic use and 96% fewer carbon emissions from shipping than single-use, disposable beverage bottles.



Grocery & Restaurants

Marc Lore’s Wonder Raises Another $350M

Wonder, a truck-based restaurant delivery service started by founder Marc Lore, raised an additional $350 million through a Series B funding round led by Bain Capital just six months after launching the company. This latest investment follows previous investment rounds totaling more than $500 million dollars. Various media reports pegged the New York-based company’s latest valuation at approximately $3.5 billion after the latest infusion. As previously reported, Lore said his new businesses (Wonder and Envoy) combine aspects of food trucks, ghost kitchens, and delivery platforms like DoorDash and Uber Eats to create something new in the delivery space. Wonder allows customers to summon these food trucks to their houses through the app, where the trucks will cook food at the curb. In addition to Bain Capital Ventures, new Wonder investors include Forerunner, Amex Ventures, Yieldstreet, Harmony Partners and Watar Partners, among others. Existing investors also participated, including GV, NEA, Accel, General Catalyst and Alpine Group.

Cardenas Markets to merge with Tony’s Fresh Market in Apollo acquisition

Investment firm Apollo Global Management plans to buy Hispanic grocer Cardenas Markets and combine it with recent acquisition Tony’s Fresh Market to form a nearly $2 billion, ethnic-focused supermarket operator. Under the transaction, funds managed by Apollo affiliates have agreed to acquire Cardenas from investment funds affiliated with global investment firm KKR, New York-based Apollo said. Together, Cardenas and Tony’s generate revenue of about $1.8 billion from 78 stores in three Western states and the Chicago area, enabling them to benefit from greater scale and complementary capabilities in a larger operating footprint, Apollo noted. Apollo announced its acquisition of Itasca, Ill.-based Tony’s Fresh Market in April. The transaction is expected to close by mid-July.

Home & Road

Furniture declines in tough month for retail

Furniture and home furnishings posted a 0.9% decline in retail sales in May, part of a weak month overall according to advance estimates from the Department of Commerce. In May, furniture and home furnishings sales came in at $12.179 billion, down from April’s figure of $12.289 billion. However, the month’s figures were up 1.9% compared with May 2021’s $11.949 billion. The all-encompassing snapshot for retail sales came in at $672.874 billion in May, down 0.3% from April’s $674.674 billion. But much like furniture and home furnishings, the retail industry was up compared with a year ago. May’s sales totals were 10.6% greater than May 2021’s $622.523 billion.

O2C Brands acquires two companies

O2C Brands, formerly known as O2COOL, has acquired two sustainability minded brands — EcoVessel and U-Konserve — for an undisclosed sum. EcoVessel markets premium insulated stainless-steel water bottles, mugs, tumblers and growlers, while U-Konserve sells stainless-steel food storage containers. The company’s simultaneous name change reflects its corporate strategy of being “a synergistic operating company of multiple consumer brands,” it said. “O2C Brands is a better reflection of who we are and where we are headed as a business. We are much more than simply O2COOL, our heritage brand. The new name and corporate structure allow us to layer additional brands and product lines into our business,” said CEO Eric Lockwood. O2C Brands, which is owned by Chicago-based private equity firm Middleton Partners, markets products under these brand names: O2COOL portable cooling, hydration, and pool/patio/beach products; TREVA home comfort products, fans and humidifiers; LunchBots sustainable kids’ lunch solutions; and Bobble filtered water bottles and on-the-go coffee vessels. EcoVessel and U-Konserve expand the brand’s portfolio and will benefit from O2C’s retail placement and sales relationships across multiple channels, O2C Brands said.

Home Products International files Chapter 11

Home Products International – North America has filed for bankruptcy, citing rising resin and steel prices and an inability to sell the company, according to Crain’s Chicago Business. The U.S. manufacturer made plastic products for storage, home organization and laundry care, as well as ironing boards. “The debtors utilize resin to produce plastic storage products and steel to produce ironing boards. The price of resin and steel has been extremely volatile during the past two years, with resin prices doubling and steel prices tripling,” CFO James Auker said in one filing, according to Crain’s. “The debtors have had only moderate success passing along those price increases to its customer base.” Auker continued, “At this point, seemingly nothing will change the trajectory of the plastics and ironing board business lines. Neither resin nor steel prices are expected to moderate sufficiently in the near future. The supply chain crisis is not expected to change in the near future.”

Jewelry & Luxury

LVMH Luxury Ventures Takes Stake In Lab-Grown Diamond Company Lusix

LVMH Luxury Ventures, the conglomerate’s investment arm, has taken a stake in Lusix, the lab-grown diamond company headed and owned by Israeli billionaire Benny Landa. LVMH Luxury Ventures was the “most prominent,” though not necessarily the largest, investor in a $90 million funding round, Landa said during a press conference at the JCK Las Vegas show. Two Israeli funds, Ragnar Crossover Fund and More Investments, also participated.

Beryl Raff to Retire as Helzberg Chair and CEO

Beryl Raff, who has served as CEO and chair of Helzberg Diamonds since 2009, will step down as head of the 170-store chain on July 1, the company announced. Brad Hampton, Helzberg Diamonds’ chief financial officer and executive board member for the past five years, will take over as Helzberg’s new CEO. He will also serve as interim CFO until a successor is named. Julie Yoakum will become president and chief merchandising officer. Her current title is senior vice president, chief merchandising officer. Bruce Pryor, current senior vice president, e-commerce, will report to Yoakum.


Office & Leisure

The NPD Group: U.S. Toy Industry Sales Experience 1% Increase in the First Four Months of 2022

U.S. toy industry dollar sales increased by 1% or +$63MM for January-April 2022, according to The NPD Group. Unit sales declined 6% and the average sales price of $11.17 increased 7% during the period. Looking at the three-year compound annual growth rate from 2019 to 2022, toy industry dollars grew 13% year-over-year, driven by ASP growth of 11%, while units were up 1% over that period.  Five of the 11 supercategories tracked by NPD posted growth in 2022. Outdoor & Sports Toys continued to be the largest supercategory with $1.3 billion in sales. Plush had the largest dollar gain of $223 million and the fastest dollar growth of 43%.  The top ten properties for YTD April included: Pokémon, Squishmallows, Star Wars, Marvel Universe, Barbie, Fisher-Price, L.O.L. Surprise!, Hot Wheels, LEGO Star Wars, and Funko POP!. These top 10 grew +15% collectively, while the remaining market declined -0.5%.  Collectibles was a primary growth driver YTD April, growing 28% or $300MM.

Funko Buys Mondo, High-End Pop Culture Collectibles Vendor, From Alamo Drafthouse

Funko is popping cult-fave pop-culture brand Mondo into its merch mix. Under a deal with indie theater chain Alamo Drafthouse, Funko acquired Mondo, which creates and sells vinyl records and soundtracks, posters, toys, apparel, books, games and other collectibles. About 30 Mondo employees are joining Funko. Financial terms of the deal are not being disclosed, but it’s obviously not massive. Funko says it does not expect the Mondo acquisition to have a material impact on its financial performance in 2022. Mondo, based in Austin, Texas, was founded in 2001 by Rob Jones and Tim League and was previously a subsidiary of Alamo Drafthouse. Mondo has become best known for its limited-edition vinyl records and screen-printed posters, which focus on bringing art back to music and cinema through collaborations with acclaimed artists. Mondo’s comparatively niche-y offerings complement Funko’s vinyl figures, action toys and other products that it produces under licensing agreements with companies including Disney, Marvel, Lucasfilm, Warner Bros., NBCUniversal, Netflix, Epic Games, Blizzard Entertainment, the NFL and the NBA.

Playful Studios unveils Web3 game and raises $46M for The Wildcard Alliance

Playful Studios, the maker of Words With Friends and Lucky’s Tale, unveiled a Web3 game and raised $46 million for its The Wildcard Alliance division. The Wildcard Alliance wants to onboard “the next billion gamers” to Web3 with ease, accessibility, and fun at the forefront, said Paul Bettner, cofounder of Playful Studios, in an interview with GamesBeat. This company differs from some blockchain game companies because it has made a playable game before talking about its blockchain technology. And the team has been working on and off on this game for five years. Rather than go full tilt with multiple projects, the company made a decision in 2019 to scale down the large team and focus on one main project. Then the pandemic hit and it turned out that was the right thing to do for the company’s survival. The company has since brought many of those employees back.


Spirit Airlines says it will decide on competing JetBlue, Frontier bids before the end of June

Spirit Airlines said Tuesday its board will decide on competing offers from JetBlue Airways and Frontier Airlines before a shareholder meeting at the end of the month as the battle for the discount carrier heats up. “The Board expects to bring the process to a conclusion and provide an update to stockholders” ahead of its June 30 meeting, Spirit CEO Ted Christie said in a statement. Spirit postponed a meeting where shareholders would vote on the existing Frontier deal from June 10 until June 30 to review the bids. JetBlue made a sweetened offer to buy Spirit on June 6, raising a reverse break-up fee to $350 million should regulators not approve the acquisition. Spirit has had a merger agreement with fellow ultra-low-cost airline Frontier since February and is still bound by the terms of that cash-and-stock deal, it said. Frontier offered a $250 million reverse break-up fee. JetBlue’s included prepaying $1.50 a share from the break-up fee to shareholders to raise its offer from $30 a share to $31.50 in cash.

Technology & Internet

Apple workers in Maryland vote for company’s first unionized store in U.S.

Employees at an Apple store in Towson, Maryland voted to join a union, a significant achievement for organized labor. The Towson store is the first unionized Apple store in the U.S. The vote is a defeat for Apple, which has opposed unionization efforts, and could energize workers at the company’s other retail locations to move forward with organizing. The tally was 65 votes in favor and 33 opposed. Approximately 110 employees were eligible to vote to join the International Association of Machinists and Aerospace Workers. Voting started on Wednesday and ran through Saturday evening. The National Labor Relations Board still needs to certify the votes. That could take around a week. Apple is required to bargain with the union over working conditions after the vote is certified, according to the NLRB. The Towson store is one of several Apple locations that have publicly announced union drives and other retail organizers at other locations are watching its results closely. Two high-traffic, high-volume stores in New York, the Grand Central Terminal and World Trade Center locations, have signaled that they are unionizing, but have yet to advance to the stage of having an official vote.


Stolen goods sold on Amazon, eBay and Facebook are causing havoc for major retailers

Over the past year, large-scale robberies have swept through stores like Louis Vuitton in San Francisco’s Union Square and a nearby Nordstrom, which was robbed by 80 people. Law enforcement and retailers have warned the public that this isn’t traditional shoplifting. Rather, what they’re seeing is theft organized by criminal networks. Retailers say a total of $68.9 billion of products were stolen in 2019. In 2020, three-quarters said they saw an increase in organized crime and more than half reported cargo theft. Some big chains blame organized theft for recent store closures or for their decisions to limit hours. For the U.S. Government’s Homeland Security Investigations unit, organized retail crime probes are on the rise. Arrests and indictments increased last year from 2020, along with the value of stolen goods that was seized. While data is imprecise about the perpetrators, there’s growing consensus that an entirely different group should be held accountable: e-commerce sites. Amazon, eBay and Facebook are the places where these stolen goods are being sold, and critics say they’re not doing enough to put an end to the racket. The companies disagree.


Finance & Economy

Retail sales posted unexpected 0.3% decline in May as inflation hammers consumers

Retail sales turned negative in May as consumers pulled back spending while inflation surged, the Commerce Department reported.  Advance retail and food service spending fell 0.3% for the month, below the Dow Jones estimate for a 0.1% gain. Excluding autos, sales were up 0.5%, which fell short of expectations for a 0.8% increase.  The numbers are not adjusted for inflation, which increased 1% for the month on the headline number and 0.6% excluding food and energy.  Sales were well below the pace in April, which posted a downwardly revised 0.7% increase from the initial 0.9% estimate.  Spending for the month declined even though sales at gas stations increased 4% due to fuel prices that scaled new heights, with regular unleaded hitting $4.43 a gallon in May and now running around $5. That growth was offset by a 3.5% decline at motor vehicle and parts dealers.

Consumer sentiment plunges to record low amid surging inflation

Consumer sentiment slumped to a record low between May and June, according to preliminary survey data released by the University of Michigan.  Rising inflation continues to frustrate consumers, who are growing tired of shelling out more money — and they are becoming increasingly despondent in the process.  Record gas prices helped push down the consumer sentiment index from 58.4 in May to 50.2 in June — the lowest recorded level since the university started collecting consumer sentiment data in November 1952.  The preliminary reading is comparable to the trough reached during the 1980 recession, wrote Joanne Hsu, director of the university’s Surveys of Consumers. In May 1980, the sentiment reading hit 51.7, according to historical data.

Housing wealth gains a record $1.2 trillion, but there are signs the market is cooling

Homeowners are in the money, and it just keeps coming. Two years of rapidly rising home prices have pushed the nation’s collective home equity to new highs.  The amount of money mortgage holders could pull out of their homes while still keeping a 20% equity cushion rose by an unprecedented $1.2 trillion in the first quarter of this year, according to a new analysis from Black Knight, a mortgage software and analytics firm. That is the largest quarterly increase since the company began tracking the figure in 2005. Mortgage holders’ so-called tappable equity was up 34%, or by $2.8 trillion, in April compared with a year ago. Total tappable equity stood at $11 trillion, or two times the previous peak in 2006. That works out to an average of about $207,000 per homeowner.