Headline of the Week

L Catterton mulls IPO for Birkenstock at more than $6 billion valuation, Bloomberg reports

L Catterton, a private equity firm backed by LVMH, is considering strategic options for Birkenstock including an initial public offering, which could value the German sandal maker at more than $6 billion, Bloomberg News reported on Thursday. L Catterton is working with advisers that include Goldman Sachs and JPMorgan on a potential U.S. listing that could happen this year or the next, the report said, citing people familiar with the matter. Birkenstock sold a majority stake to L Catterton in 2021 and the transaction at the time valued the company at about 4 billion euros ($4.35 billion). Financiere Agache, the family office of French billionaire and LVMH boss Bernard Arnault, also participated in the purchase of the German sandals maker alongside L Catterton. In July 2021, Reuters reported that L Catterton held discussions with investment banks to evaluate potential options, including an initial public offering or a SPAC merger.

 

 

Apparel & Footwear

Clothing retailer Kit and Ace bought by company co-owned by Joe Mimran

Kit and Ace Technical Apparel Inc. has been bought by a company co-owned by Canadian fashion designer and entrepreneur Joe Mimran. The price paid for the clothing retailer by Unity Brands Inc., which is owned by Mimran and veteran retail executives David Lui and Frank Rocchetti, was not disclosed. Under the deal, Lui will become CEO based at the company’s head office in Vancouver. Meanwhile, Kit and Ace’s product design and development will relocate to Toronto where it will be managed by Mimran’s creative design centre. Kit and Ace was founded in 2014 by Shannon and J.J. Wilson — the wife and son of Lululemon Athletica Inc. founder Chip Wilson. George Tsogas acquired the retailer from Wilson’s family in 2018. He will remain with the company and assume the role of chief operating officer.

Avery Baker Steps Down as President and Chief Brand Officer of Tommy Hilfiger Global

Tommy Hilfiger Corp. confirmed Tuesday that Avery Baker, president and chief brand officer, has resigned. Baker had been in the role since November 2020, and was with the company for 24 years. “We can confirm that Avery Baker, president and chief brand officer of Tommy Hilfiger Global, has decided to leave PVH Corp. to pursue other opportunities,” said PVH Corp., parent of Hilfiger, in a statement. “Martijn Hagman continues to oversee the brand as chief executive officer of Tommy Hilfiger Global and PVH Europe.” The company had no comment on a successor at this time. In a post on LinkedIn on Monday, Baker wrote, “After a great deal of soul searching, I have decided it is time to end my journey with Tommy Hilfiger after 24 year to start a new chapter in my life.” Since joining Hilfiger in 1998, Baker held numerous roles over the company’s global offices, including executive vice president, global marketing and communications, chief marketing officer, and chief brand officer and head of brand management.

Chico’s announces $100M stock repurchase program

Chico’s FAS announced that it has initiated a new share repurchase program for up to $100 million of the company’s common stock. As part of that move, the company said it has canceled the remainder of an earlier $300 million share repurchase program, which it announced in 2015. Chico’s said it “completed all but $35.4 million of its previous share repurchase authorization.” Under a share repurchase program, a company buys back its shares from the market or offers its shareholders the option of tendering their shares to the company at a fixed price. The move is intended to boost stock value by reducing the number of outstanding shares. Chico’s was trading around $5.40 just after the opening bell Monday. The company’s market capitalization was about $664 million. The company reported $534.7 million in total net sales for the first quarter, down from $540.9 million a year ago. The company said its gross margin rose to 42.1% up from 40% a year ago. The company’s operating income was $53.3 million and its customer count, spend per customer and multi-channel customer count all rose over the last 12 months.

 

 

Athletic & Sporting Goods

EGYM, the Munich-based smart fitness startup, raises $225M from Jared Kushner’s Affinity Partners

The technology industry at large might not be in the best of health at the moment, but health and fitness startups appear to be alive and well. EGYM, the Munich-based “smart workout solution” business, has agreed to a monster equity investment of €207 million ($225 million) on the back of a very strong year of growth, led by the investment firm started by Jared Kushner.  The company’s business includes both a line of connected hardware (its own gym equipment); software (apps and diagnostics to measure and optimize how people work out on EGYM’s and other connected fitness equipment); a corporate health network operation called Wellpass with more than 2.5 million users; and a mission: to improve healthcare outcomes by focusing on “the shared economy of a gym,” in the words of CEO and co-founder Philipp Roesch-Schlanderer.

Aqualung, Apeks sold to Barings investment

The Aqualung Group, one of the world’s largest manufacturers of scuba diving and watersports equipment, is to be bought by Barings investment group for an undisclosed fee, according to a press release from the company’s Valbonne, France-based headquarters.  The Aqualung Group, founded in 1943 with the development of the ‘Aqua-Lung’ by Jacques-Yves Cousteau and Émile Gagnan, the group also contains the Apeks, Omer, Aquasphere, Stohlquist, and US Divers brands.  Barings, one of the world’s leading investment managers – most famous among the general public for the 1995 collapse of Barings Bank – has entered into exclusive discussions to acquire 100 per cent of the Aqualung Group.

Cosmetics & Pharmacy

Walgreens is closing 450 locations

Walgreens expects to close 150 locations in the United States and 300 locations in the United Kingdom, Walgreens Boots Alliance CFO James Kehoe said in the company’s earnings call last week.  The pharmacy chain reported lower earnings on Tuesday compared to the same quarter last year – $118 million, or 14 cents a share, compared to $289 million, or 33 cents a share, a year ago. The company is facing muted consumer spending and a pullback in demand for Covid vaccines.  CEO Rosalind Brewer said the company was increasing its cost-savings efforts to $4.1 billion and “taking immediate actions to optimize profitability for our US healthcare segment.”

Croda Completes Solus Biotech Acquisition

Croda International Plc has completed the acquisition of Solus Biotech, a global leader in premium, biotechnology-derived beauty actives.  The move will enhance the company’s current synthetic ceramides portfolio delivered by Sederma, drawing on Solus’ existing biotech-derived ceramide and phospholipid technologies, officials said. Located in South Korea, Solus will expand Croda’s Asian manufacturing capability and create a new biotechnology R&D hub in the region, working in synergy with Sederma’s R&D center in LePerray, France.  Transaction details were not disclosed.

HALF MAGIC Closes Investment Round Led by ACG

HALF MAGIC, a vegan, cruelty-free, and transformative makeup brand from the imagination of Donni Davy, the renowned head makeup artist from HBO’s Euphoria, announced the closing of its investment round led by Alliance Consumer Growth, with significant participation from A24, Imaginary Ventures, and Access Entertainment. Funds will be allocated toward supporting notable growth year over year, including fueling expansion via the brand’s inaugural debut in brick-and-mortar retail set for later this year. Full transaction details were not disclosed.

 

Discounters & Department Stores

Christmas Tree Shops plans to liquidate if it can’t find a buyer

Christmas Tree Shops plans to liquidate and close all of its stores if it can’t find a buyer, according to court filings last week. The home decor and discount gift retailer sought Chapter 11 protection in May with plans to stay in business after closing about 10 stores. Christmas Tree Shops received a $45 million bankruptcy loan, but acknowledged that it defaulted on the loan. The lenders notified Christmas Tree Shops of the default on June 21 and planned to cut off access to funding on June 28. The company’s lenders said they would provide limited financing if Christmas Tree Shops was able to enter into an asset purchase agreement by Wednesday and secure a $5 million deposit by Thursday. A sale process is ongoing, but the company does not believe any interested parties will be able to meet that deadline. If they don’t, the company plans to liquidate its approximately 70 remaining stores.

With prices remaining high, former Walmart CEO predicts Target will struggle

Former Walmart CEO Bill Simon says that, though inflation has started to moderate, he doesn’t see prices coming down anytime soon. Simon was on CNBC’s “Squawk on the Street” yesterday and added that the shoppers “are going to have to get used to” the higher prices. “We often see the habits that they develop in a difficult time stick until something else changes…it could get worse or it could get better,” he told CNBC. “As long as the macro issues of the economy stay the same it is expected that a lot of this will be sticky.” With the wage growth rate and employment rate remaining high, Simon does not see prices going down until there is a drop in one or the other.

Kohl’s Rolling Out New Store Format With Key Partner

Kohl’s has been plagued by disappointing sales over the last few years, which brought the retailer to the table with Franchise Group as a buyer for the company. Kohl’s pulled out of the deal citing a volatile market. Since the failed buyout, Kohl’s has been working to reinvent itself as a fashion forward organization. Kohl’s launched a section of its store to create this new awareness of fashion and good faith acts called Discover @ Kohl’s. This section of the store is dedicated to partnerships with brands that promote inclusivity in different groups of people who are often left behind, such as serving differently abled customers and youth needing gender neutral clothing.

 

 

Emerging Consumer Companies

Everytable raises $25 million in funding, attracts impact investors focused on food as medicine

Everytable, a mission-driven food company, has raised $25 million in funding in its Series C-2 preferred stock financing round. The investment was led by the Dohmen Company Foundation (DCF) through the Dohmen Impact Investment Fund, with participation from existing investors. The funding will be used to expand Everytable’s retail stores and food services business in Southern California, the Bay Area, and New York City. Everytable aims to make fresh, nutritious food accessible and affordable for all. The company plans to open up to 25 additional stores by the end of 2023.

Aperitif brand Haus acquired by The Naked Market

Aperitif brand Haus, which previously struggled with funding, has been acquired by CPG incubator The Naked Market. The San Francisco-based company raised $27.5 million in Series A funding in 2021 and plans to reintroduce Haus as an on-shelf alcohol brand. The Naked Market operates several brands using a data-driven approach to CPG product development, and Haus will be its first brand not launched in-house. The acquisition was facilitated through an ABC process, and The Naked Market aims to expand Haus into multiple categories.

DTC sleepwear startup, Lunya, files for Chapter 11 bankruptcy

Direct-to-consumer sleepwear startup Lunya has filed for Chapter 11 bankruptcy in an effort to reorganize its business. The filing was made under the subchapter V provision, which is designed to help small businesses with unsecured debts of up to $7.5 million. Lunya’s revenue peaked at $50 million in 2020 and 2021 but fell to $35 million in 2022. The company attributed its decline to Apple’s iOS 14 changes, which affected its ability to target advertisements effectively. Additionally, expensive retail leases and increased inventory levels also contributed to the company’s financial troubles.

 

 

Food & Beverage

Mars Enters Agreement To Buy Kevin’s Natural Foods

Mars, Inc. has signed an agreement to acquire Kevin’s Natural Foods, adding the ready-to-eat meal business to its portfolio of better-for-you brands. The acquisition is expected to close during the third quarter of 2023.  Financial terms of the deal were not disclosed but a representative of Kevin’s said that the purchase includes the company’s California production facility.  Following the sale, Kevin’s will operate as a standalone business within Mars’ Food & Nutrition segment.  The sale will also enable an exit for the brand’s minority partners, investment firms TowerBrook Capital Partners L.P. and NewRoad Capital Partners.  Kevin McCray launched Kevin’s as meal kit company Chef’s Menu in 2012, which evolved both its name and business model in 2019 alongside investment partners Dan Costa and Kelsie Costa-Olson of Innov8 Partners. The concept was inspired after McCray changed his own diet as a result of an auto-immune disorder. All of Kevin’s Natural Foods products are keto- and paleo-certified as well as dairy-, gluten- and soy-free.

Health and wellness company acquires Jenny Craig

Omnichannel health and wellness company Wellful, Inc. has acquired the Jenny Craig brand.  The Jenny Craig brand will be managed as an independent brand within Wellful.  Jenny Craig has provided weight loss food products and plans for more than 40 years and plans to return this fall with a direct-to-consumer delivery model with the same food and personalized coaching, according to the company.  “The Jenny Craig brand is a wonderful addition to Wellful’s collection of proven health and wellness brands,” said Brandon Adcock, chief executive officer of Wellful, Inc. “Over the last 40 years, Jenny Craig has been committed to helping people lose weight and live healthier lives, and this acquisition not only reaffirms, but strengthens, that commitment. The Wellful platform is comprised of brands that help consumers achieve clinically validated outcomes.” Wellfull, Inc. was created after Nutrisystem, Inc., and Adaptive Health LLC merged in 2021.  Wellfull, Inc. features a portfolio of vitamins, supplements, and its weight loss brands include Nutrisystem, Peptiva, Instaflex, Nugenix, Super Beta Prostate, and Dr. Sinatra.

Tattooed Chef to file for bankruptcy, plans to sell assets

Tattooed Chef plans to file for Chapter 11 bankruptcy protection and pursue a sale of all its assets.   Sam Galletti, its chairman and CEO, said the plant-based food company continues “to be impacted by a challenging financing environment and an inability to raise additional capital.” The company said it will continue operations during bankruptcy.  Tattooed Chef is the latest company in a once thriving plant-based food sector that has seen sales slow and growth struggle to reach the once lofty ambitions predicted just a few years ago.

 

 

Grocery & Restaurants

Alibaba expands Freshippo grocery stores in China ahead of unit’s IPO

Alibaba’s grocery unit Freshippo expanded its number of physical stores in China, the company said on Friday, as the business prepares to spin off from its parent company and go public. Freshippo, known as Hema in China, plans to open 12 new stores across mainland China in major cities including Beijing, Shanghai and Guangzhou. Groceries have become a battleground for China’s two biggest e-commerce firms: Alibaba and JD.com. Last week, JD set up a new business unit to house its grocery business 7Fresh, and appointed a company veteran to lead the division. Alibaba’s Freshippo attempts to blend the company’s strength in e-commerce and logistics with the more traditional shopping experience. Users can order online and get groceries delivered, but can also head to the physical stores known for their fresh produce such as lobsters. The expansion comes three months after Alibaba split itself into six separate business units in a bid to get the company back to growth. These units can raise outside capital and go public. However, Freshippo is a separate, independent business under Alibaba, not one of the six business groups. Last month, Alibaba greenlit an initial public offering for Freshippo, but did not give a timeline. Freshippo has more than 300 stores in China across 27 Chinese cities.

Pinstripes plans to go public in Banyan SPAC deal

Pinstripes Inc., the large-venue dining and entertainment brand, plans to become a public company in a special purpose acquisition company deal with Banyan Acquisition Corp., a blank-check firm. Northbrook, Ill.-based Pinstripes, which has 13 units open in eight states and Washington, D.C., said it expects the SPAC deal to be completed by the end of 2023. The transaction values the combined company at about $520 million at $10 per share and includes an upfront equity investment of more than $20 million directly in Pinstripes by Middleton Partners, a Chicago-based investment firm, the companies said. Besides the condition of the Middleton investment, the closing of the deal depends on at least $75 million in gross cash proceeds to the combined company. Upon closing of the transaction, existing Pinstripes shareholders will receive shares of the surviving public combined company.

GEN Korean BBQ House owner makes IPO debut

GEN Restaurant Group Inc., which owns the 34-unit GEN Korean BBQ House concept, began trading Wednesday in its initial public offering, joining a small list of brands seeking funds in the public markets this year. The Cerritos, Calif.-based casual-dining company offered 3.6 million shares at $12 each, the high end of its $10-$12 range, and they began trading Wednesday at $18 a share and closed at $15.34. The company’s upsized offering was expected to raise about $43.2 million. The GEN Restaurant Group IPO was a further test of the public-market appetite for restaurant stocks after Washington, D.C.-based Cava Group Inc., parent to the 263-unit fast-casual Mediterranean brand, made its successful public market debut in mid-June. GEN Korean BBQ was founded in 2011 in Tustin, Calif., by Jae Chang and David Kim. Kim was the owner of Baja Fresh Mexican Grill and La Salsa Fresh Mexican Grill, which he sold to and bought back from The Wendy’s Co. over a four-year period. In 2016, Kim sold both brands to the MTY Food Group Inc., a Montreal-based restaurant operator, in a $27 million deal.

Home & Road

Hooker Furnishings expands portfolio with acquisition of Atlanta-based manufacturer

Hooker Furnishings has acquired BOBO Intriguing Objects, a lighting, décor and furnishings manufacturer that offers a variety of one-of-a-kind designs. The move allows Hooker to expand its portfolio into lighting, accessories, textiles, and décor. BOBO’s management team and employees will continue to serve its customers from its headquarters in Atlanta, a release said. Financial terms of the acquisition were not disclosed. BOBO will officially launch as a division of Hooker at High Point this October, with a new location inside Hooker’s showroom.

Serta Simmons emerges from Chapter 11 bankruptcy, taps Eitel for new board

Serta Simmons Bedding has completed its financial restructuring and emerged from Chapter 11 five months after filing for protection under the U.S. Bankruptcy Code in January. The company said today that the move is a “critical step in the company’s turnaround effort.” The bankruptcy court ruled earlier this month that the company’s plan could move forward. At the time of its filing, the company included a plan to emerge quickly with financing in place. As part of the go-forward plan, the company has put together a board of directors that includes a familiar bedding executive: former chairman and CEO of Simmons Bedding, Charlie Eitel. Mark Genender, managing partner of Bristol Growth Capital and also an alum of the Simmons board, has been appointed chairman. Under the plan, the company says it has “ample liquidity and a more flexible capital structure” to execute its turnaround plan. Through the bankruptcy process, Serta Simmons reduced its debt from $1.9 billion to $315 million, lowering its annual interest expense by more than $100 million. In addition, the company has secured a $100 million revolving credit facility.

Tuesday Morning Converting Bankruptcy to Chapter 7

Tuesday Morning has chosen to convert its Chapter 11 bankruptcy filing to a Chapter 7 status and is going out of business.  The company filed for Chapter 11 bankruptcy protection in February. In a court filing with the United Bankruptcy Court for Northern District of Texas, Fort Worth division on June 30, Tuesday Morning and parties involved in the Chapter 11 proceeding filled a motion to convert to Chapter 7 bankruptcy. The filing maintained: The debtors have sold substantially all of their assets. Secured creditors hold competing, unresolved liens against the sale proceeds. They have filed numerous pleadings setting out their alleged entitlement to payment. Either the parties will reach a settlement, or the court will decide these disputes. But neither outcome will leave behind any sale proceeds for unsecured creditors.

Home goods retailers find new homes in outlet centers

Post-COVID, outlet centers aren’t just about apparel and footwear anymore. Some 18 months ago, Tanger Outlets’ leasing department laid out a strategy to put high-level home goods and furniture brands in many of their centers, and it has paid off quickly and big. The nation’s largest outlet center chain has created long-term channel partnerships with Williams Sonoma, Crate & Barrel, and Le Creuset. Other home goods chains taking up residence in select centers such as Tanger San Marcos and Tanger Riverhead include Pottery Barn, RH, and Serena & Lily. “A lot of our centers are in tourism locations in the Southeast, but they’re also places where people live, work, and dine,” said Justin Stein, Tanger’s executive VP of leasing. “After COVID hit, a lot of people with secondary residences in these communities made them their primary residences. So we set out on a diversification strategy and the number of home goods retailers in our centers has skyrocketed over the past several months.”

Wayfair Starts Construction on First Namesake Physical Store

The first Wayfair-branded physical store is under construction with planned completion by next spring.  While the store will be the first under the Wayfair banner, the company previously opened physical stores under its specialty nameplates, such as AllModern. The forthcoming store, to be the first Wayfair flagship location, is set to open in the Wilmette, IL, Edens Plaza development during the spring of 2024. Construction has begun, and Wayfair has released external renderings of the building and surroundings in the construction phase. The store will feature interactive experiences to engage shoppers in 19 different departments ranging from furniture and decor to outdoor and home improvement. The store also will feature Wayfair’s first restaurant. As Wayfair advances its omnichannel sales strategy, the store will outsize any physical retail location that Wayfair has in operation.

Jewelry & Luxury

Canada Goose debuts first sneaker

Expanding its footwear offerings, luxury apparel brand Canada Goose will release its first sneaker on July 18, according to a press release shared with Retail Dive. The Glacier Trail sneaker is meant to combine functionality with luxury, with features including a breathable waterproof interior membrane, a protective rubberized leather wrap and a multi-directional heel tread. The sneaker has a variety of color options including black, tan and white, and is available in a high-top version. Canada Goose’s new Glacier Trail sneaker is priced at $450 and the Glacier Trail High costs $550. The sneaker will be available on the brand’s e-commerce website and at select brick-and-mortar stores, as well as through Shopbop.com, Saks Fifth Avenue stores and Saksfifthavenue.com in the U.S.

 

Alex and Ani closes 20 stores

Alex and Ani’s store closures come as the brand has been reworking different aspects of the company during the past few years. “From moving our assembly operation, relocating our warehouse and updating our ERP system, we are collectively working towards a strategic omni-channel environment that supports shifts in retail and consumers’ wants and needs,” Burger said. “Throughout this process, we must make difficult decisions that ultimately support this journey.” Burger added that Alex and Ani “will continue to explore all options that support our refreshed business model,” which could include opening new stores in the future. The news comes after Alex and Ani secured a $17.5 million loan in August 2022 in order to help fund its working capital needs and operations. The financing demonstrated an “affirmation of the resiliency of the reorganized Alex and Ani brand,” according to a statement from Burger at the time.

TAG Heuer Getting New Leader, Report Says

Julian Tornare, head of LVMH-owned watch brand Zenith, will take over sister company TAG Heuer, currently headed by Frédéric Arnault, says a report in Swiss newspaper Neue Zürcher Zeitung. Arnault, son of LVMH chairman Bernard, will move to Bulgari in an unspecified senior role, according to the newspaper report, which cited “well-informed sources.” Tornare has headed Zenith since 2017, while Frédéric Arnault has headed TAG Heuer since 2020.

New Botswana Deal Means De Beers Could Have Less to Sell

Following an often-bitter public squabble that both riveted and unnerved the diamond trade, De Beers and Botswana have reached an agreement in principle that includes a new 10-year sales deal and a 25-year renewal of the company’s diamond mining licenses when they expire in 2029. The new pact increases the amount of diamonds that state-owned Okavango Diamond Company (ODC) can sell from Debswana, the mining company jointly owned by De Beers and the Botswana government. Currently, ODC can sell up to 25% of Debswana’s production. The new framework calls for ODC’s share of Debswana’s production to immediately jump to 30%, increase to 40% in four years, and hit 50% by the contract’s final year, in 2033. Paul Rowley, De Beers’ executive vice president of diamond trading, tells JCK the contract is a “win-win.”

 

Office & Leisure

BrightPet Nutrition Acquires Raw Pet Food Processing Company

BrightPet Nutrition, manufacturer of private label and co-manufactured pet foods, has acquired Raw Advantage Processing, a family-owned frozen raw pet food manufacturer based in Salem, OR. BrightPet, Lisbon, OH, said it has increased its capacity to provide freeze-dried and frozen raw pet food with the move. By integrating Raw Advantage’s expertise, BrightPet expands its product offerings and capacity, catering to the growing demand for premium freeze-dried and frozen raw pet food and treats. The acquisition also strengthens BrightPet’s position as a trusted and innovative provider of pet nutrition products. This is the third acquisition for BrightPet. In October 2022, the pet food processor acquired Bravo! Pet Foods; in January 2021, it acquired MiracleCorp; and in 2018 it purchased Phoebe Products.  Alvarez & Marsal Capital Partners (A&M), a middle-market private equity investment fund that is part of the A&M Capital platform, acquired a majority interest in BrightPet in October 2020.

Better Collective acquires Playmaker HQ for $54m

Better Collective has acquired American sports media company Playmaker HQ for $54m (£42.6m/€49.5m). The sale will consist of $15.0m in cash upfront, $1.0m in deferred payments and up to $38.0m in performance-based earnout payments over a three-year period. For 2023, Playmaker HQ is currently targeting full-year revenue of more than $10m, with an EBITDA margin of 20%-25%. Based in South Florida, the sports media company specialises in creating original entertainment and sports content, with athlete collaborations and creator talent aimed at the US market. Better Collective believes that the acquisition will help it gain access to “a new and large audience of highly engaged generalist sports fans”. It will also use Playmaker HQ’s sponsorship sales knowledge to increase the affiliate’s monetisation of audiences outside of the sports betting realm.

Spirit Halloween in hiring blitz for ‘record’ number of locations

October 31 is already creeping up at the nation’s largest Halloween retailer. With a record number of seasonal locations expected to open this year, Spirit Halloween said it is looking to hire its largest seasonal workforce yet. Approximately 40,000 positions are available throughout the U.S. and Canada.   With more than 1,500 locations scheduled to open in strip centers and malls across North America, Spirit is a one-stop destination for all things Halloween. Stores offer an immersive and interactive experiences for shoppers, complete with a vast assortment of costumes and accessories along with exclusive décor and animatronics. “This will be Spirit’s 40th season of bringing the mystique of Halloween to life and that starts each year with the hiring of our talented and enthusiastic associates and store managers,” said Steven Silverstein, CEO of Spirit Halloween and Spencer’s. Spirt Halloween and Spencer’s are part of Spencer Spirit Holdings Inc..

CEO of 1-800 Flowers.com steps down and is replaced by…

There’s a familiar face back at the helm of 1-800 Flowers.com, Inc. The specialty gifting company said that CEO Christopher McCann is stepping down for personal health reasons, effective July 3, 2023. He will be succeeded by chairman Jim McCann, who served as CEO of the company from inception through 2016. (The two are brothers.) Christopher McCann will continue to serve on the board and as an officer of various subsidiaries of the company. He has served as CEO since March 2016. Before that, he spent 32 years as president of the company. In recent years, 1-800-Flowers has transformed itself from a floral-based specialty retailer with multiple-brand add-ons into an e-commerce gifting platform. In addition to its January 2022 purchase of the floral livestreaming platform Alice’s Table, the retailer has rolled out a new loyalty app, checkout with a mobile or desktop BNPL option provided by Klarna, as well as checkout with digital payment solutions including Apple Pay, PayPal, Click to Pay, and Venmo. In May, it acquired SmartGift, an intelligent gifting platform that enables brands and corporations to purchase presents for business partners.  From fiscal 2019 through fiscal 2022, the company grew revenue by more than 75%.

 

Technology & Internet

Meta launches Instagram Threads messaging app, challenging Twitter

Meta has officially debuted its Twitter-like messaging app Threads, which the company is pitching as Instagram’s “text-based conversation app.” Mark Zuckerberg, Meta’s CEO and co-founder, announced the debut of Threads on Wednesday. Threads represents Meta’s attempt to capture the wave of users who have left Twitter amid the often unpredictable ownership of Tesla and SpaceX CEO Elon Musk. The Threads app is now available to download for free on the Apple App Store and Google Play online store in over 100 countries, Meta said in a blog post. Threads shares Twitter’s visual aesthetic as a text-based social messaging app in which users can post short messages that others can like, share, and comment upon, according to screenshots of Threads that are available on Apple’s App Store. People will be able to follow the same Threads accounts that they follow on Instagram and reply to other public posts in a way akin to how people use Twitter.

 

The Biggest Takeaways from Microsoft’s Showdown with the FTC

Microsoft and its current major acquisition target, video game publisher Activision Blizzard, have wrapped up their five days in court in San Francisco as the Federal Trade Commission sought to stop the deal from closing, but not without several fascinating facts coming to light. And not only about games. Information on Microsoft’s business ambitions, its process for okaying acquisitions, and its most critical rivals in cybersecurity was revealed as part of the hearing process, thanks to documents and testimony from executives. Large releases like this don’t happen every day, and in the past several years Microsoft has avoided prominent trials that can result in several notable disclosures at once. In addition to regulators in the U.S. and the United Kingdom, Sony also opposes the deal. Its PlayStation 5 console competes with the Xbox Series S and X consoles, and the company has said that anticompetitive effects would arise if Microsoft were to take control of Activision Blizzard.

Finance & Economy

Private sector companies added 497,000 jobs in June, more than double expectations, ADP says

The U.S. labor market showed no signs of letting up in June, as companies created far more jobs than expected, payroll processing firm ADP reported.  Private sector jobs surged by 497,000 for the month, well ahead of the downwardly revised 267,000 gain in May and much better than the 220,000 Dow Jones consensus estimate. The increase resulted in the biggest monthly rise since July 2022.  From a sector standpoint, leisure and hospitality led with 232,000 new hires, followed by construction with 97,000, and trade, transportation and utilities at 90,000.  Annual pay rose at a 6.4% rate, representing a continued slowing that nonetheless still is indicative of brewing inflationary pressures.

U.S. service sector picks up in June; inflation gradually slowing, ISM survey shows

The U.S. services sector grew faster than expected in June as new orders picked up, but a measure of prices paid by businesses for inputs fell to more than a three year low, suggesting that the closely watched services inflation would continue to cool.  The survey is among several indicators, including housing starts, nonfarm payrolls and orders for long-lasting manufactured goods, that have suggested the economy continues to plod along despite growing risks sparked by hefty interest rate increases from the Federal Reserve.