Story of the Week
Primo, Poland Spring owner BlueTriton agree to water merger
Primo Water and an affiliate of beverage company BlueTriton Brands are merging to create a diversified water giant with a presence in small portable bottles and large containers. BlueTriton’s brands include Poland Spring, Deer Park, Ozarka, Ice Mountain and Pure Life. The all-stock transaction will create a portfolio serving millions of consumers across different product formats, channels, price points and usage occasions. The new company expects to have combined net revenues of $6.5 billion. BlueTriton was formed in 2021 after Nestlé sold its North American bottled water business to private equity firms One Rock Capital Partners and Metropoulos & Co. for $4.3 billion.
Apparel & Footwear
Forever 21 seeks rent concessions as fast-fashion brand faces financial woes
Forever 21 is asking landlords for a break on rent as the legacy fast-fashion player’s sales decline and it struggles to keep up with savvier competitors, CNBC has learned. The retailer, which has more than 380 stores in the U.S., has asked some landlords to cut its rent by as much as 50%, people familiar with the matter told CNBC. While the company is facing financial difficulties, it has yet to hire advisors and isn’t considering a second bankruptcy protection filing, the people said. It’s working to restructure its many leases so it can cut costs, they said. Forever 21 faces a range of issues that have long plagued its business. It operates in the increasingly saturated fast-fashion market, the people said. They also added that the retailer struggles to manage inventory and understand and respond to its consumers.
Vince drives better profitability amid sales decline In Q1
Vince Holding Corp., continuing to advance its transformation strategy, generated improved profitability in the first quarter amid a sales decline. Net income for the quarter ended May 4, was $4.4 million, or 35 cents a diluted share, compared with a net loss of $400,000, or 3 cents, a year earlier. Adjusted net loss totaled $3.3 million or 26 cents per share, compared with adjusted net loss of $4.4 million, or 36 cents, which excludes transaction expenses, the gain on sale of the Parker brand intellectual property to Authentic Brands Group, and a tax benefit. Net sales decreased 7.6 percent to $59.2 million compared with $64.1 million a year ago, but the company said the decline was expected due to a reduction in promotional activity, which helped margins, as well as a pullback in the off-price business within the wholesale channel. Lower product and freight costs also helped the business.
FullBeauty snaps up plus specialist Avenue
FullBeauty Brands is expanding its portfolio of inclusive and plus-size apparel brands, announcing a definitive agreement to acquire U.S. plus specialist Avenue Stores. Terms were not disclosed. In 2019 Avenue shuttered all of its 220-plus stores as part of a Chapter 7 bankruptcy process. Months later Australian retail company City Chic Collective acquired its e-commerce business. Avenue and its brands, the company’s fourth acquisition in just over a year, will be added to FullBeauty’s digital mall, per a company press release.
Athletic & Sporting Goods
Nike, Converse sue 52 ‘counterfeiting networks’
Nike and Converse last week filed a lawsuit against 52 alleged counterfeit networks, which collectively operate 98 websites and 267 social media handles, over the sale of counterfeit goods, according to documents filed with the U.S. District Court for the Southern District of New York. All 98 websites either currently sell Nike or Converse counterfeits to U.S. shoppers, or have within the last twelve months, per the lawsuit. Nike said the majority of the networks it’s identified operate out of China, Malaysia or other foreign countries, but noted that it was “impossible” to figure out the identities and “exact interworking” of the counterfeit networks it is suing. “The Defendants, who have no affiliation with Nike or Converse, have attempted to capitalize on the popularity of the Plaintiffs’ Marks by manufacturing and marketing counterfeit products falsely labeled as ‘Nike’ or ‘Converse’,” the lawsuit reads.
EMS/Bob’s Parent Files for Chapter 11 Bankruptcy
In a bankruptcy court affidavit, David Barton, CEO of Mountain Sports LLC, the parent of Eastern Mountain Sports (EMS) and Bob’s Stores, said the company plans to close its primary distribution center and fulfill orders from its stores as an initial step towards reorganization. Barton noted in the filed document that Mountain Sports’ operations principally conducts business from its corporate headquarters and distribution center at 160 Corporate Court in Meriden, CT. Barton added, “As part of the debtors’ recent restructuring process, they have determined that they can vacate the distribution center and operate from their larger stores and remotely. Therefore, the debtors are in the process of vacating the distribution center.” The company provided few details on the company’s reorganization plans, including whether Mountain Sports would seek to reorganize around a smaller number of stores or sell the business.
Fifty 1 Labs, Inc Announces Acquisition of Drago Knives, LLC
Fifty 1 Labs, Inc., a leading company in the sports supplement, sports equipment, and health and wellness industries, is thrilled to announce the acquisition of Drago Knives, LLC, a Florida-based company specializing in innovative throwing knives. Founded by Dragan Zivotic, a former member of the Serbian Army and an expert in knife throwing, Drago Knives plans to make significant contributions to the sports and outdoor equipment sector with its patent-pending design for throwing knives. The acquisition of Drago Knives, LLC, marks a significant milestone for Fifty 1 Labs as it expands its portfolio into the growing market of throwing knives, an ancient practice with a rich history that dates back to prehistoric times. Historically, throwing knives have been used across various cultures for hunting, combat, and sport, evolving over centuries into a popular activity for enthusiasts and professional competitors alike.
Smith & Wesson stock gains 6% as earnings, revenue beat expectations in Q4
Smith & Wesson Brands, Inc., a prominent American firearms manufacturer, has reported a notable increase in its fourth-quarter earnings and revenue, surpassing analyst expectations. The company announced a fourth-quarter adjusted EPS of $0.45, which is $0.09 higher than the analyst estimate of $0.36. Revenue for the quarter reached $159.1 million, exceeding the consensus estimate of $156.8 million and representing a 9.9% increase from the same quarter last year. The company’s stock price surged by 6.7% following the announcement. Smith & Wesson reported a gross margin of 35.5% for the quarter, a significant improvement from the 29.0% margin in the comparable quarter of the previous year. The adjusted EBITDA margin also saw an increase to 22.6%, up from 20.9% year-over-year (YoY).
Cosmetics & Pharmacy
Beauty platform PCA Companies acquires U.S. wholesale division of Space NK
The PCA Companies has made its first retail acquisition. The global beauty platform has snapped up the U.S. wholesale division of Space NK, which entails roughly 600 points of distribution across Bloomingdale’s, Nordstrom, Nordstrom Rack, Hudson Bay and the company’s shop-in-shop collaboration with Walmart and Beauty SpaceNK. PCA Companies said that although the platform will be renamed in the U.S., it does not plan to touch the existing brand matrix or retail partnerships. Financial terms of the deal were not disclosed.
Natura & Co Launches Venture Capital Fund
Natura & Co has announced the launch of a corporate venture capital fund, dubbed Natura Ventures. The fund will be jointly managed by the Brazilian cosmetics manufacturer and impact investment firm, Vox Capital. According to a report published by Global Venturing, quoting Epoca Negocios, the fund has been endowed with an initial capital of R$50 million and is tasked with investing in some 15 start-ups focused on the circular economy, beauty and customer service technology sectors.
Kirin Holdings to acquire Fancl in $1.39 billion deal
Kirin Holdings Co. is set to acquire Japanese skincare and cosmetics brand Fancl for approximately ¥220 billion (US$1.39 billion). The acquisition involves an offer of ¥2,690 per share, representing a 40% premium on Fancl’s closing price before the proposal. This acquisition follows Kirin’s purchase of Australian vitamins maker Blackmores Ltd. for about ¥170 billion last year, as part of its broader strategy to diversify from its core beer business. Kirin aims to achieve ¥500 billion in annual health-care sales, contributing around 20% of its overall revenue.
Renee Cosmetics raises $12 million in Series B funding round
Renee Cosmetics has raised ₹100 crore (~$12 million) in a Series B funding round led by existing investors, Evolvence India and Edelweiss Group. The round places a valuation of ₹1200-1400 crore on the make-up brand, up 60 percent on the previous round. According to a report published by Entrepreneur, the brand has raised US$45 million in total to date. Ashutosh Valani, Co-founder and Director at Renee, told Entrepreneur, “This funding round will enable us to push the boundaries of beauty innovation and reach new heights in delivering products that encourage and celebrate diverse beauty.”
Care/of, known for its vitamin and supplement subscriptions, is shutting down. In a memo posted to the company’s website, Care/of said “[w]e unfortunately no longer have funding to operate in the way we have been.” As a result, the company is no longer accepting new orders and is canceling all subscriptions. “We are actively exploring options for the brand but do not have anything definitive to communicate at this time,” the company said. “We hope to be in a place to share more soon.”
Discounters & Department Stores
Big Lots issues ‘going concern’ warning
Trouble may be on the horizon for Big Lots. The closeout and discount retailer said in a filing with the U.S. Securities and Exchange Commission that it may fail to meet all of its credit and term loan obligations in the near future, a situation that “raises substantial doubt about the company’s ability to continue as a going concern.” Big Lots said the liquidity crunch is due to its net losses and use of cash in operating activities in 2022, 2023, and the first quarter of 2024. And due to macroeconomic factors, Big Lots said it expects additional operating losses. The warning comes as the retailer’s Q1 net sales fell 10.2% to $1 billion, down from $1.1 billion last year. Big Lots also posted a net loss of $205 million for the quarter, relatively flat from the prior year. Big Lots’ net liquidity rose to $289 million, up from $254 million in Q4, but the company’s debt load grew too, rising to nearly $574 million in Q1, up from about $502 million a year ago.
Dollar General names Walmart vet as chief marketing officer
Dollar General named seven people to new leadership roles on Thursday, according to an emailed press release. The leadership changes include three people who are new to or rejoining the company and four people who were promoted within the retailer’s ranks. Among those joining the company are Tony Rogers, who will serve as Dollar General’s chief marketing officer. Rogers most recently served as chief marketing officer at Signet Jewelers, and has held several senior executive roles including as chief member officer at Sam’s Club and chief marketing officer at Walmart. The retailer also named new leaders for asset protection, merchandising managers for health and beauty and holiday events, toys, and lawn and garden; and multiple leaders within store operations.
Target to roll out generative AI chatbot for store employees
Target plans to introduce a new generative artificial intelligence technology for its store employees at all of the company’s nearly 2,000 stores nationwide by August, the company announced Thursday. The company is launching an AI-powered chatbot tool, Store Companion, as an app on store associates’ handheld devices. The app is designed to help store associates answer process and procedure-related questions. It’s currently in pilot testing at about 400 locations ahead of a planned nationwide roll out. Target is also using gen AI to enhance product display pages to display personalized customer search results and summaries of product reviews. Target also began introducing guided search on its online store. Customer product searches can now return a broader selection of relevant items. The enhanced search experience will be available to all customers later this summer.
Emerging Consumer Companies
Italian footwear brand Golden Goose postponed its Milan IPO on the grounds that political turmoil in Europe has led to a “significant deterioration” in market conditions. The company, known for its worn-looking sneakers that have been made popular by celebrities such as Taylor Swift, was aiming for a market capitalization of up to $2 billion. The first day of trading was due to take place on Friday.
Stix rebrands as Winx Health, brings on Kerry Washington as investor and advisor
After five years in the game, Stix will now be known as Winx Health. Winx Health launched in 2019 with a pregnancy test and a strong mission of how women should be marketed to, especially when it comes to reproductive and sexual health tools. From there, the brand began expanding, launching UTI testing, a morning-after pill, supplements and an extensive educational platform called Real Talk that has more than 500 articles. This range that the brand now offers is what ultimately led to the rebrand. In addition to the rebrand, Winx Health has brought on actress Kerry Washington as an investor and health adviser. The team did not disclose the details of Washington’s investment.
Kaiyo, online furniture marketplace, turns to in-person sales
Kaiyo, an online furniture resale marketplace, is trying to sell more couches and chairs offline. This past weekend, Kaiyo held its first-ever in-person shopping event in New York City at Not-a-Normal Market, a pop-up marketplace for vintage goods and home decor. Kaiyo’s booth included an eclectic, modern mix of brightly colored chairs, lamps, artwork and couches. It sold 30% of what it displayed during the two-day event, and its biggest sale was a $2,000 red Ligne Roset Ploum sofa that can retail for $10,000 when new. Kaiyo is one of a number of digitally-native furniture platforms making the move to physical retail to appeal to younger shoppers, many of whom are furnishing their first apartments and prefer to buy big-ticket items in person. Kaiyo was founded in 2016 as a full-service furniture marketplace that handles everything from pickup to product photography.
Daydream, AI-powered search and discovery shopping platform, raises $50 million
Daydream, a new, AI-powered platform hoping to change the way people shop online, raised a $50M seed round co-led by Forerunner Ventures and Index Ventures with participation from GV (Google Ventures) and True Ventures. Launching in Beta this fall, Daydream will introduce its first shopping category, a highly personalized shopping experience powered by a built-in, superhuman search engine that offers a better way to find and discover women’s and men’s fashion. Daydream will also have the largest high-quality branded fashion catalog found anywhere. The company was launched by e-commerce tech and retail veteran Julie Bornstein along with co-founders Matt Fisher, Dan Cary, Lisa Green and Richard Kim.
Athletic Brewing buys second San Diego facility
Athletic Brewing announced it purchased a 107,000 square foot facility in San Diego across the street from its existing brewery for an undisclosed sum. The new manufacturing plant will help the company double its capacity to brew its nonalcoholic beer, both flagship and limited offerings. The brewer said the plant will be capable of filling 1,200 cans of its beer per minute, and that its new brewing technology will reduce water use. Athletic is also installing new packaging lines and enhancing its operations to meet food safety and quality requirements. The new facility will begin operating in late 2025.
Food & Beverage
DayDayCook Acquires Asian Food Brand, Omsom
DDC Enterprise, Ltd. (“DayDayCook,” “DDC,” or the “Company”), a leading multi-brand Asian consumer food company, announced it has acquired Omsom, the proud and loud Asian food brand that has quickly garnered a devoted following for its Cooking Sauces, Saucy Noodles, and bold cultural commentary. The acquisition, which consists of a combination of DDC’s cash and stock paid out over four years, is expected to accelerate new product innovation for Omsom, with R&D anticipated to take half the time from idea to aisle. Operational synergies between the two companies will also streamline processes and improve financial metrics. Further, the two companies share a mission and vision, and together with DDC’s expanding portfolio, are poised to become a leading force in the Asian food industry.
Katy Perry-backed food products firm Bragg explores sale, sources say
Bragg Live Food Products, which is backed by celebrities Katy Perry and Orlando Bloom, is exploring a sale that could value the maker of apple cider vinegar at more than $500 million, including debt, according to people familiar with the matter. The Santa Barbara, California-based company, which also counts investment firm Swander Pace Capital among its investors, is working with Bank of America to solicit interest from potential buyers, which include private equity firms, the sources said, speaking on condition of anonymity. Founded in 1912 by Paul Bragg, the company is known for its apple cider vinegar products, as well as its salad dressings, seasoning blends, olive oil, beverages and other food ingredients.
Plant-based startup Tender secures deal with fast food chain
Four-year-old food tech startup Tender is making its way to the food service arena after the Somerville, Massachusetts-based company secured a deal with Boston food chain Clover Food Labs. Tender was founded in 2020 and produces alternative proteins including beef short rib, pulled pork, chicken breast and crab. The company’s technology involves a process similar to that of the creation of cotton candy, where plant protein fibers, including soy proteins, are spun to create structured cuts of meat, according to CEO Christophe Chantre. Tender received $11 million in Series A funding led by Rhapsody Venture Partners and existing investors like Chris Sacca’s Lower Carbon Capital and Safar Partners. The company will use the funds to meet the demand of restaurant customers and to innovate with new products.
Grocery & Restaurants
Kroger cites Q1 pharmacy profit pressures as earnings dip
Kroger reported a decline in first-quarter earnings on Thursday amid margin pressures in its fuel and pharmacy businesses. For its first fiscal quarter, which ended May 25, the retailer said net income slipped 1.6%, to $947 million, relative to a year ago, while sales increased 0.2%, to $45.27 billion. Identical store sales, excluding fuel, rose 0.5%. Kroger said it expected pharmacy margin pressures to continue in the second quarter, which will lead to lower net income in Q2 as well. The company attributed the decline in part to lower margins on GLP-1 treatments and some unexpected regulatory restrictions that dove up its costs for some drugs. The company confirmed its overall sales and profit guidance for the full year, however. “Better than expected performance in grocery helped us manage fuel and health and wellness results that were behind expectations,” said Rodney McMullen, chairman and CEO, in a conference call with analysts. Kroger recorded increases in both household penetration and number of store visits during the quarter, he said. Higher-income customers have continued to spend more, especially in fresh departments, while lower-income customers are also showing some momentum, McMullen said, with growth in customer counts among that demographic group for the first time in more than a year.
Darden Beats on Earnings, Evan as Olive Garden Sales Drag
Darden Restaurants on Thursday reported mixed quarterly results as Olive Garden’s same-store sales fell for the second consecutive quarter. The company has faced a “consistently weaker consumer environment,” as well as increased discounting and marketing pressure from its rivals, CEO Rick Cardenas said on the company’s conference call. For fiscal 2025, Darden is forecasting that its same-store sales will grow just 1% to 2%. Darden’s overall same-store sales were flat for the quarter, dragged down by weaker-than-expected sales at Olive Garden and its fine-dining restaurants. Still, executives emphasized that their chains are outperforming the broader casual-dining segment. “We’re not going to do things to buy sales, even with the increased discounting our competitors are doing. … Our focus is on profitable sales growth,” Cardenas said. He added that consumers are concerned about inflation — and growing more anxious about the job market. Still, Olive Garden and LongHorn Steakhouse diners are more willing to spend on pricey entrees and alcoholic drinks than they had been over recent quarters, executives said. Olive Garden’s same-store sales fell 1.5%, despite a 1% rise in its menu prices compared with the year-ago period. estimates.
McDonald’s confirms $5 Meal Deal, launching a summer pricing battle
In February, McDonald’s CEO Chris Kempczinski said the battleground in the quick-service category is with the low-income consumer. We now know his company’s weapon of choice – a $5 Meal Deal. In a surprise to probably no one, McDonald’s confirmed that it is, indeed, launching the deal after weeks of speculation. The nationwide offer kicks off June 25 and includes the choice of a McDouble or McChicken sandwich, small fries, a four-piece Chicken McNuggets, and a small soft drink. It is available for a limited time. “We heard our fans loud and clear – they’re looking for even more great value from us, and this summer that’s exactly what they’ll get,” Joe Erlinger, president of McDonald’s USA, said in a statement. “Value has always been part of our DNA. We’re focused on living up to that legacy and offering delicious, affordable options customers can enjoy any time they walk through our doors, go through our drive-thru or place an order through our app.”
Home & Road
Beyond Inc. flattens leadership and merchandising structure
Just 4 months after appointing a CEO specific to the Bed Bath & Beyond business, Beyond Inc. is restructuring its org chart. The company announced it has eliminated the co-chief executive roles, eliminated the dual chief merchant roles, and expanded the role of executive chairman Marcus Lemonis. Chandra Holt, the former Walmart exec who was named CEO of Bed Bath & Beyond this past February, has left the company. Dave Nielsen has been appointed president, overseeing the marketing, merchandising, and supply chain functions for Beyond – which includes Overstock, Bed Bath & Beyond Zulily, and other online retail brands.
Aaron’s to be acquired by venture capital firm IQVentures
The Aaron’s Company, an omnichannel provider of lease-to-own and retail purchase solutions for appliances, electronics, furniture and other home goods, has entered into a definitive agreement to be acquired by fintech organization IQVentures for $10.10 per share in cash, or an enterprise value of around $504 million. The Aaron’s Company’s board of directors has unanimously approved the transaction, which is expected to close by the end of the year, pending shareholder and regulatory approvals, as well as other standard conditions. Financing is not a condition for the transaction. Once completed, The Aaron’s Company will become privately held, and its stock will no longer be traded on the NYSE.
La-Z-Boy expects modest growth after Q4 results outpace expectations
Sales at La-Z-Boy took a slight dip in the fourth quarter but shot up smartly compared with the pre-pandemic period in 2019. For the quarter ended April 27, sales hit $554 million, down 1% against a year-ago period that had gotten a boost from pandemic backlog deliveries. Compared with the fourth quarter of fiscal year 2019, sales jumped 22%. At company-owned La-Z-Boy Furniture Gallery Stores, sales nudged up 1% as the company added three new locations, two of them independent La-Z-Boy Furniture Galleries stores added by acquisition. The expanded revenue base more than offset lower same-store sales. Delivered sales in the Retail Segment fell 6% to $288 million, again, facing comparisons with the prior-year’s delivery of backlog orders. Compared with the fiscal 2019 quarter, delivered sales increased 50%.
Jewelry & Luxury
Claire’s CEO Ryan Vero Steps Down
The CEO of Claire’s Holdings LLC has stepped down, the company announced. Ryan Vero was named head of the accessories chain in 2019, joining Claire’s after serving as president of Party City Retail Group. The retailer did not give a reason for his departure, which was effective immediately. He also will vacate his position on the company’s board of managers. During Vero’s tenure, Claire’s worked to expand its reach by partnering with other retailers including Walgreens and Kohl’s. It overhauled its marketing and gave its piercing business a trendy makeover, all in an attempt to be more appealing to Gen Z and Gen Alpha consumers.
Signet Awaits Engagement Recovery as Q1 Sales Sink 9%
Signet Jewelers Ltd. posted declining sales in the first quarter but is expecting an engagement recovery ahead. The jewelry giant, which is the parent company of several large jewelry store chains including Zales, Jared, and Kay Jewelers, also reaffirmed its recent guidance boost. “Our results reflect notable acceleration from a sluggish February to the top half of expectations, with an even stronger May,” Signet Jewelers CEO Virginia C. Drosos said in a company press release. The May momentum showed up just in time for Mother’s Day sales. Drosos noted a 4 percent increase in engagement ring sales in North America in the quarter, not including sales at its digital banners, James Allen and Blue Nile.
Innovation Needed As The Luxury Goods Market Stalls In 2024
Bain and Company just released its Spring 2024 “Luxury Goods Worldwide Market Study,” and the news is not good. The personal luxury goods market declined between 1% to 3% year-over-year in the first quarter at current exchange rates. This follows a progressive slowdown in 2023. Luxury started the year strong with revenues rising 12% in the first quarter, followed by 8% in second quarter and a 3% drop in third quarter. It experienced a reprieve in the fourth quarter with the market up 2%, but the downward trend is clear. Personal luxury brands are in a moment of crisis amidst waning consumer demand, lead author Claudia D’Arpizio stated: “Many are navigating a momentary crisis, driven by macroeconomic pressures and a polarized customer base. As a narrative of resurgence and resilience emerges, luxury brands must rethink the way they build their value proposition to prioritize trust and connection with consumers.”
Office & Leisure
Embracer Group repays $300m to lenders
Embracer Group is a step closer to clearing its debts after paying SEK 3.2 billion ($300 million) on its revolving credit facility. The group told lenders that it had made the repayment towards the credit it has borrowed. The full repayment is due by May 2025, and Embracer reported this installment is “in accordance with [the] plan.” The May deadline was part of extension agreements Embracer secured on its credit and loans back in December. The repayment was made possible by the net proceeds Embracer has already received from the sale of Gearbox Entertainment to Take-Two Interactive. The $460 million deal was announced in March, and completed last week.
Six Flags and Schlitterbahn parent company to finalize $8 billion merger
Six Flags and Cedar Fair — the company that owns Schlitterbahn — will finally merge months after entering a definitive merger agreement. The two well-established theme park brands announced June 18 that the merger will be finalized on July 1. The transaction is one of the largest of its kind in decades, resulting in a combined company value of $8 billion. The company will operate under the name Six Flags Entertainment Corporation and will be headquartered in Charlotte, North Carolina. That means the Six Flags headquarters will leave Arlington in North Texas. Richard Zimmerman, president and CEO of Cedar Fair, will serve as president and CEO of the combined company. Selim Bassoul, president and CEO of Six Flags, will serve as executive chairman of the combined company’s Board of Directors.
Technology & Internet
FTC refers TikTok complaint to DOJ
The Federal Trade Commission said Tuesday that it’s referred its complaint against TikTok and Chinese parent ByteDance to the U.S. Department of Justice. The FTC began its investigation following a 2019 settlement with Musical.ly, the predecessor to TikTok, that was related to violations of the Children’s Online Privacy Protection Act (COPPA). The FTC was probing to see if TikTok violated a federal law that prohibits “unfair and deceptive” business practices. The regulator said it’s transferring the case to the DOJ because the investigation “uncovered reason to believe named defendants are violating or are about to violate the law.” “Although the Commission does not typically make public the fact that it has referred a complaint, we have determined that doing so here is in the public interest and that a proceeding is in the public interest,” the FTC said. A TikTok spokesperson said it’s been working with the FTC on the matter for over a year and is “disappointed” the agency decided to pursue litigation.
Apple stops offering buy now, pay later loans in U.S.
Apple said that it has stopped issuing loans through Apple Pay Later, its buy-now-pay-later program that launched last year. The move comes after Apple said it would start allowing installment loans later this year in its Apple Pay checkout process through third-party companies, such as Affirm, and credit and debit cards from issuers, such as Citigroup. Apple said it would no longer issue Apple Pay Later loans, which enabled customers to buy products online and pay in four interest-free installments, at prices up to $1,000. The discontinuation is a sign that not every new fintech feature or product that Apple launches becomes a success or fits in with the iPhone maker’s overall strategy. “Starting later this year, users across the globe will be able to access installment loans offered through credit and debit cards, as well as lenders, when checking out with Apple Pay,” an Apple spokesperson told CNBC. “With the introduction of this new global installment loan offering, we will no longer offer Apple Pay Later in the U.S.”
Finance & Economy
May retail sales rise 0.1%, weaker than expected
Retail spending was weaker than expected in May as consumers continued to wrestle with stubbornly higher levels of inflation. Sales rose just 0.1% on the month, one-tenth of a percentage point below the Dow Jones estimate, according to a Commerce Department report that is adjusted for seasonality but not inflation. However, the result was slightly better than the downwardly revised 0.2% decline in April. On a year-over-year basis, sales rose 2.3%. The sales number was worse when excluding autos, with a decline of 0.1% against the estimate for a 0.2% increase.
Mortgage demand flattens even as interest rates hit the lowest level since March
Consumers seemed unimpressed by the latest drop in mortgage rates. Total mortgage application volume rose just 0.9% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.94% from 7.02%, with points decreasing to 0.61 from 0.65 (including the origination fee) for loans with a 20% down payment. That is the lowest level since March. “Mortgage rates dropped last week following the latest inflation data and the FOMC meeting,” said Mike Fratantoni, MBA’s SVP and chief economist.
