The Big Story

Walmart Takes Aim at Amazon Prime

Betsy White

In an attempt to keep some of the millions of new customers it gained during the pandemic, at the end of this month Walmart is reportedly ready to announce the debut of its new loyalty program, called Walmart+. Walmart, like other ubiquitous brick and mortar and ecommerce retailers selling essentials, gained sales and new customers as a result of the shutdowns brought on by the COVID-19 virus, and is now is looking for ways to retain them.

The Walmart+ program is an enhancement to its existing Delivery Unlimited offering, which, for a $98 annual membership fee, provides free delivery or pickup of grocery items to members who live close by to 1,400 of Walmart’s 4,700 U.S. stores. Walmart had originally been set to launch Walmart+ in February but postponed the introduction due to the pandemic. The new program, also costing $98 per year, will reportedly include additional benefits to those of Delivery Unlimited, including an expanded merchandise offering, fuel discounts, early access to promotions, free virtual entertainment for children, and the ability to scan purchases in store and skip the checkout line.

Up until the launch of Walmart+, Walmart has been one of the few retailers without a true loyalty program, limiting its ability to acquire data on customer behavior, which it can use to increase the effectiveness of the company’s marketing through personalization and customization.  In addition, the program will provide additional advertising revenue opportunities that will supplement the expected retail sales boost gained through larger and more frequent orders – not to mention the membership fees.  Estimates are that initial enrollments could be as high a 5 million, growing to 20 million over time. Stockholders clearly approve, as when the news came out last week, the Company’s stock price jumped the most that it had in about four months.

Of course, Walmart+ is a direct competitor to the Amazon Prime loyalty program, which cost $119 per year and reportedly has 118 million members.  Walmart has been actively competing with Amazon through both the Delivery Unlimited program as well as through Express Delivery, which charges an additional $10 per order for delivery within 2 hours. Now, with a less expensive program that is more similar to Amazon Prime, Walmart has a real opportunity to keep both old and new customers as consumers continue to consolidate and even eliminate shopping trips to multiple retailers. Clearly Walmart believes that it will be one of the few that can take business away from Amazon by offering an Amazon Prime alternative that only it can execute.




Headlines of the Week

Sur La Table pursues sale of company

Sur La Table has filed for Chapter 11 bankruptcy protection and is pursuing a sale of the company, subject to court approval, the specialty retailer announced. Sur La Table said it has, with the support of its lenders, secured the necessary debtor-in-possession financing to complete the court process. The Chapter 11 petition was filed in the United States Bankruptcy Court for the District of New Jersey. The retailer has received a stalking-horse bid for its assets from affiliates of Fortress Investment Group, which is working in partnership with STORY3 Capital Partners. The deal is subject to court approval, and any other interested buyers must be considered. The company operates 121 stores; 56 of them are closing permanently, a spokesperson said. Bidders can bid any way they want, for all of the remaining stores or a select number. The potential bankruptcy and sale of the company had been rumored for a few months.



Apparel & Footwear

Bankrupt Brooks Brothers Gets Competing Financing Offer

Bankrupt retailer Brooks Brothers Group Inc. received a higher offer for financing from investors including Authentic Brands Group LLC that would keep the chain running during the court process, according to people with knowledge of the situation. The competing plan for debtor-in-possession financing came after Brooks Brothers filed for court protection on Wednesday, said the people, who asked not to be named discussing a private matter. They declined to say who else was in the investor group. A higher offer could allow the providers to leapfrog the financing plan that Brooks Brothers already lined up, potentially putting the new lenders in position to own the 200-year-old men’s clothier. Representatives for Brooks Brothers and Authentic declined to comment. Ahead of the Chapter 11 filing, Brooks Brothers had arranged a $75 million DIP loan from WHP Global, owner of the Joseph Abboud and Anne Klein brands. The new offer has lower fees and provides more liquidity, one of the people said.

Clothing retailer Lucky Brand files for bankruptcy

Clothing retailer Lucky Brand Dungarees LLC has filed for bankruptcy with initial plans to close at least 13 stores and with a possible deal to sell its private equity-backed business to the operator of Aéropostale and Nautica brands. Debts of the Los Angeles-based business, which is owned by Leonard Green & Partners LP, include $182 million owed to lenders and $79 million to merchandise vendors, according to a filing Friday in U.S. Bankruptcy Court in Wilmington, Del. SPARC Group LLC is leading a proposed deal to buy the business, according to a declaration filed with the court by Mark A. Renzi, Lucky Brand’s restructuring chief. SPARC is an apparel company operating under the Aéropostale and Nautica brands owned by Authentic Brands Group LLC and Simon Property Group, one of Lucky’s key landlords, a court filing said. The offer is subject to better and higher bids and court approval. The bid for Lucky includes $140.1 million in cash and a credit bid of $51.5 million by lenders, a court filing said. It also has a backup bid if that one falls through, a filing said.

Landlords Worldwide Approve AllSaints Retail Restructuring

AllSaints has struck a deal with landlords worldwide to keep its stores open by shifting to a new rent structure that puts less pressure on the retailer. AllSaints said Tuesday that creditors have overwhelmingly approved its request to switch to new lease terms for All Saints Retail Ltd., in the U.K., and its subsidiary across the Atlantic, AllSaints USA Ltd. As reported last month, AllSaints had undertaken an insolvency procedure known here as a company voluntary arrangement, or CVA, to protect its 255 stores worldwide. Peter Wood, chief executive officer of AllSaints, said he was grateful to the company’s “teams, suppliers and other partners around the world for their overwhelming support during this process.” He said the majority of landlords across the U.K., European Union, U.S. and Canada had voted in favor of the company’s CVA proposals. The deal means that AllSaints will shift to rental payments based partly on turnover, rather than entirely on pre-agreed leases pegged on open-market valuations. It also means that landlords have agreed to accept less rent, at least for now.

Levi’s to cut 700 office jobs due to virus-related slump

Levi’s said Tuesday that it will cut 700 office jobs, or about 15% of its worldwide corporate workforce, as it deals with a sharp drop in sales due to the coronavirus pandemic. The San Francisco-based jeans maker said the layoffs will save it about $100 million a year and won’t affect workers at its stores or factories. Like other clothing companies, Levi’s had to temporarily close its stores due to the virus. Many of the department stores that sell its jeans were also shut. Levi Strauss & Co. said its second quarter revenue sank 62% to $497.5 million. It reported a loss of $363.5 million, after reporting a profit a year ago. The company said most of its stores are now open and seeing sales at about 80% of where they were a year ago.

Parent company of Men’s Wearhouse misses interest payment

Tailored Brands Inc. has been given some — but not much — breathing room as it struggles to manage its debt amid the COVID-19 pandemic. The company, whose brands include Men’s Wearhouse, Jos. A. Bank and Joseph Abboud, said it skipped an interest payment of about $6.1 million for Men’s Wearhouse on 7 percent senior bonds due in 2022. The retailer has a 30-day grace period to make the payment before an event of default occurs. At the end of its first-quarter (May 2), Tailored Brands had cash and cash equivalents of $244.2 million, an increase of $231.2 million from a year earlier due to a $310 million drawn down on the company’s asset-backed loan. Total debt was $1.4 billion, up $273.9 million from the year-ago period.


Athletic & Sporting Goods
Lululemon acquisition Mirror could generate $700 million and reach 600,000 subscribers by 2023: Bank of America
With at-home fitness on the rise, in part due to the coronavirus pandemic, Bank of America analysts say Lululemon Athletica Inc.’s newly-acquired company Mirror could generate $700 million in revenue and reach 600,000 subscribers by 2023.  Calvin McDonald, Lululemon’s chief executive, said the deal will be financed with the company’s $1.5 billion in liquidity, with the transaction expected to close in a week or two. Mirror is an interactive workout platform that looks like a mirror when it isn’t in use, but becomes a screen showing fitness classes and more when activated. The core Mirror product starts at $1,495 and a subscription is $39 per month. Mirror launched in 2018 and had a previous partnership with Lululemon.


Big splash in swim-related markets: HEAD acquires Zoggs

HEAD, the leading global sporting goods group that owns the HEAD, PENN and MARES brands, has announced the acquisition of Zoggs.  International swim-focused brand, Zoggs, with its goggles, swimwear and equipment product ranges, claims leading market positions in the ‘UK, Australia and various distributor markets.’  HEAD, with its strong market positions in winter-sports, racquet-sports and diving over recent years, has also become a leading performance swim brand in both the pool and open water segments, with an increased focus on the growing swimrun event space.

Cosmetics & Pharmacy

Walgreens Boots Alliance feels COVID-19’s impact in Q3

With changes in the marketplace driven by the COVID-19 pandemic, Walgreens Boots Alliance swung to a loss in its fiscal third quarter. The company posted a $1.6 billion operating loss, compared with an operating income of $1.2 billion in the prior-year period. Sales were up 0.1% to $34.6 billion, due in large part to a 3% comparable-sales increase in the retail pharmacy USA segment. Overall, loss per share was $1.95, compared with earnings per share of $1.13 a year ago. Among the impacts from the pandemic was a $700 million to $750 million adverse sales impact that almost entirely struck its non-U.S. business. Additionally, the company’s gross margin was impacted by a shift to lower-margin categories and supply chain costs, while selling, general and administrative expenses increased from higher employee costs, as well as social distancing and cleaning expenses.

Voyant Beauty to Acquire KIK Personal Care

Wind Point Partners and portfolio company Voyant Beauty, a full-service partner to the personal care and beauty industry, have entered into a definitive agreement to acquire the KIK Personal Care business from KIK Custom Products. KPC is a leading North American manufacturing partner and formulator for personal care, prestige beauty, over-the-counter, and household products serving global consumer product companies and fast-growing asset-light brand owners, and a leading supplier of personal care guest amenities to the North American hotel industry. Voyant Beauty is a leading value-added manufacturer of innovative hair care, bath and body, and skincare products to both established and fast-growing emerging brands. This acquisition expands Voyant’s product range, innovation, and supply chain capabilities.

Walgreens, VillageMD to open hundreds of doctors’ offices

Walgreens will be opening 500 to 700 full-service doctor’s offices co-located at its stores via an expanded partnership between Walgreens Boots Alliance and VillageMD. The companies are expanding the offering on a large scale following a successful trial that started last year. Over the next five years, the companies expect to open hundreds of Village Medical at Walgreens primary care clinics in more than 30 markets across the country, with plans to build hundreds more after. The physician-led clinics will be staffed by more than 3,600 primary care providers who will be recruited by VillageMD. In addition to in-person physician services, the clinics will offer 24/7 telehealth visits, as well as at-home visits. More than half of them will be located in areas seeing a shortage of health professionals or that are medically underserved according to Health and Human Services criteria.

Discounters & Department Stores

BofA Turns Bullish On Kohl’s, Highlights Recovery Trends, Balance Sheet

Multiple department stock stocks are down around 60% since the start of 2020, but differentiated stores like Kohl’s have upside potential moving forward, according to BofA Securities. The Kohl’s Analyst: Lorraine Hutchinson upgraded Kohl’s from Neutral to Buy with a price target lifted from $20 to $27. The Kohl’s Thesis: Kohl’s stands out from other department stores, as 95% of locations are in the off-mall format, Hutchinson said in the upgrade note. As of June 9, 90% of its store fleet had reopened, and these locations were running at 75% of last year’s volumes, the analyst said. Encouragingly, stores that opened the earliest are showing superior trends, she said.

Walmart quietly registers insurance business in its latest move into health care

Walmart is making yet another move in the health-care world: It’s getting into the insurance business. The Bentonville, Arkansas-based retailer confirmed to CNBC on Wednesday that it will start selling health insurance plans. It has job openings listed on its careers website for “Walmart Insurance Services LLC.” In the job posts, it says it is looking to hire insurance agents in the Dallas area to sell supplemental Medicare insurance. “We need passionate health insurance professionals to help us build this new business from the ground up and achieve our mission,” the job post said. The news was previously reported by Med City News and Talk Business & Politics. The business filed with the Arkansas secretary of state in late June, according to the Med City News report.

Exclusive: Sears exploring sale of home improvement business

Sears is exploring a sale of its home improvement business following interest from potential suitors such as private equity firms, people familiar with the matter said on Wednesday. The struggling U.S. retailer’s Sears Home Services division has emerged as a coveted asset during the COVID-19 pandemic, as consumers embark on renovations while they stay home. The division is one of the department store operator’s few crown jewels following its bankruptcy in 2018 and $5.2 billion sale to hedge fund manager Eddie Lampert, who was already its biggest shareholder and creditor. Transformco, the owner of the Sears and Kmart retail chains, could raise at least $1 billion by divesting the home improvement business, the sources said. Sears has tapped investment bankers at Guggenheim Securities LLC to explore selling the business, the sources said.



Emerging Consumer Companies

Tyler Haney returns to Outdoor Voices

Outdoor Voices announced that founder Ty Haney will return to the company, and that it has raised funding from NaHCO3. NaHCO3 is an investment management company run by Marc Merrill, co-founder of Riot Games, and his wife, Ashley Merrill, founder and CEO of sleepwear brand Lunya. Ms. Merrill will be the new chairman of Outdoor Voices, and Haney will return as a member of the board of directors.

Super Coffee raises $25 million

Kitu Life, the company behind fast-growing beverage brand Super Coffee, has raised $25 million in a fundraising round that values it at more than $200 million. The investment was led by Skyview Capital, with participation from ZX Ventures, Anheuser-Busch InBev venture and innovation arm.



Grocery & Restaurants

Constellation Brands acquires Gary Vaynerchuk’s Empathy Wines

Constellation Brands announced plans on Wednesday to acquire Empathy Wines, a direct-to-consumer vintner co-founded by entrepreneur Gary Vaynerchuk. Terms were not disclosed. Empathy, founded in 2019, has sold about 15,000 cases of its signature California-sourced wine and has amassed more than 2,000 subscribed customers, who purchase the product exclusively online. The acquisition comes at a time when many states are slowing or reversing their reopening plans as coronavirus cases climb. Restrictions on bars and indoor dining may be extended, providing a boon for alcohol e-commerce.

Krave owner acquires Chef’s Cut Real Jerky Co.

Just over a month after acquiring Krave Pure Foods, Inc. from The Hershey Co., Sonoma Brands has snagged another premium meat snack brand, Chef’s Cut Real Jerky Co. Terms of the transaction were not disclosed. Founded in 2009, Chef’s Cut offers jerky, meat sticks and biltong. The brand will continue to develop products alongside Krave as part of a protein snacking portfolio within Sonoma Brands, a private equity investment firm and brand incubator. Kevin Murphy, managing director of Sonoma Brands, will lead the Krave and Chef’s Cut businesses as interim CEO of the combined entity. “Our goal is to reenergize the premium segment of the meat snacks category,” Mr. Murphy said. “Through a focus on product quality and innovation supported by impactful marketing and a thoughtful promotional strategy, we are committed to driving incremental growth for our retail partners while delivering a great product and experience to consumers.”

Pizza Hut’s largest U.S. franchisee files for Chapter 11 bankruptcy

NPC International, the largest U.S. franchisee of Yum Brands’ Pizza Hut, filed for Chapter 11 bankruptcy. The company operates more than 1,200 Pizza Huts and nearly 400 Wendy’s restaurants. In contrast to most of the restaurant industry, Pizza Hut is one of the rare companies to report same-store sales growth in April and May, thanks to higher digital and delivery sales. But the coronavirus pandemic follows years of slumping U.S. sales for Pizza Hut, and NPC has struggled with a debt burden of roughly $1 billion. The franchisee pre-negotiated a restructuring agreement with most of its lenders.

Home & Road

Pier 1 finds a buyer

Pier 1, which is now liquidating its business, may have a future as an e-commerce operation. The company announced it has forged an asset purchase agreement with Retail Ecommerce Ventures and Pier 1 Imports Online, which will buy the bankrupt retailer’s owned intellectual property along with data and assets related to its e-commerce business for $20 million. Retail Ecommerce Ventures acquired Dress Barn last year and is operating the brand as an online retailer. The company principals are investor and social media influencer Tai Lopez and entrepreneur Alex Mehr. In a filing with the SEC, Pier 1 said it received other offers and may consider other bids during an auction scheduled for July 8. The home furnishings chain, which filed for Chapter 11 bankruptcy protection in February, began winding down its operations in early June. Pier 1 expects to conclude its liquidation sales at its approximately 540 stores by the end of October.

Bed Bath & Beyond in big store closing move

Bed Bath & Beyond plans to close about 200 stores during the next two years as it looks to return to profitability. The embattled home furnishings retailer, which operated a total of 1,478 stores as of May 30, announced the decision to “right-size” its real estate portfolio in reporting its first-quarter results. Bed Bath & Beyond said the closings, which will mostly affect its 955 namesake locations, and other cost restructurings should generate annual cost savings of between $250 million and $350 million, excluding related one-time costs. (Bed Bath & Beyond’s other store banners include buybuy Baby, Christmas Tree Shops and Harmon Face Values.) The company reported that its net loss narrowed to $302.29 million, or $2.44 per share, for the quarter ended May 30, from $371.09 million, or $2.91 a share, in the year-ago period. Excluding one-time items, it lost $1.96 per share. Sales tumbled 49% to $1.31 billion from $2.57 billion a year ago, as the retailer’s stores were temporarily shuttered for much of the quarter amid the COVID-19 pandemic. Digital sales surged 82% during the period, rising more than 100% during April and May, the company said. Digital sales represented about two-thirds of the chain’s first-quarter sales.

Bassett revenue off 41% in fiscal Q2

Consolidated sales for fiscal 2020’s second quarter at full-line manufacturer and retailer Bassett Furniture Inds. fell 41% to $63.8 million, a reflection of the now-familiar impact of the COVID-19 pandemic on recent results at publicly traded companies in the home furnishings sector. Bassett lost $20.4 million for the three months ended May 30 compared with net income of $445,000 in 2019’s second quarter. Through fiscal 2020’s first two quarters, consolidated sales totaled $175.9 million, down 23.2% compared with the same point last year. Year to date, Bassett lost $19.1 million, while the company earned $1.1 million through fiscal 2019’s first half. After closing all corporate stores as of March 20, Bassett began reopening brick-and-mortar locations April 20. By the end of the second-quarter, 53 of 66 corporate stores had reopened, with the balance up and running the week of June 15. Bassett furloughed 58% of its work force, 1,392 associates, the week of March 30, when it also closed all manufacturing facilities and instituted a “work from home” model for corporate headquarters unless physical presence was required.

Jewelry & Luxury

Unlucky Charms: The Rise and Fall of Billion-Dollar Jewelry Empire Alex and Ani

Patent No. US D487,709 S was granted on March 23, 2004, to Carolyn Rafaelian-Ferlise of Cranston, Rhode Island. The application captured the concept in a mere five words: “an expandable wire bangle bracelet.” Further details would have been superfluous. The bracelet’s design, as illustrated in a set of accompanying renderings, was astonishingly straightforward, familiar to hard-core rock climbers and Eagle Scouts as a double fisherman’s or a grapevine knot. Somehow, though, no one had ever thought to patent it for jewelry.

Lab-Grown Diamonds May Develop Their Own Price Scale, Seller Says

Lab-grown diamonds may soon develop their own distinct price scale that differs from that of natural diamonds, Andrey Zharkov, the former chief executive officer of Alrosa who now heads the lab-grown diamond company Ultra C, predicted during a recent webinar. “Honestly speaking, I think that, in the future, in two or three years, we will see more pricing for laboratory-grown diamonds based on benchmarking,” he said. “It will be an important differentiation for laboratory-grown diamonds and natural diamonds.” He said that for the moment most lab-grown sellers still base their prices on the Rapaport list—though fancy colored diamonds are priced differently. “[For them,] we use the benchmark for colorless. The prices of fancy colored lab-grown diamonds and natural diamonds cannot be compared.”

Movado Announces Restructuring and Layoffs

On June 29, watch company Movado Group began a restructuring plan meant to reduce operating expenses and adjust cash flows. The watchmaker made the announcement in an 8-K it filed with the Securities and Exchange Commission. It said the move stemmed from “the ongoing economic challenges resulting from the COVID-19 pandemic and its impact on the company’s business.” The filing hinted at layoffs but did not specify how many jobs were being shed. The overall restructuring will cost between $9 million and $12 million—with approximately $8.5 million–$12 million of that going to employee severance and benefit costs, as well as stock-based compensation charges for separated individuals. The restructuring is expected to be completed by the second quarter of its current fiscal year.


Office & Leisure

AMC shares surge after WSJ report that the company is working on deal to avoid bankruptcy

AMC Entertainment shares jumped as much as 21% after the close of regular trading on Tuesday following a story in the Wall Street Journal that the movie theater company is nearing a deal to avoid near-term bankruptcy. The Journal, citing people familiar with the matter, said AMC is working on a restructuring deal, led by Silver Lake, that would have bondholders provide a $200 million loan, swapping out “their unsecured claims at a discount.” AMC would take that route over a financing offer from Apollo Global and other lenders, the Journal reported. As of Tuesday’s close, AMC had lost 40% of its value this year. The company has been battered by the coronavirus, which forced movie theaters across the country to close in March. AMC says it will begin reopening theaters in waves on July 30, about two weeks later than it previously expected. Even with theaters opening up for the first time in months, there’s no guarantee that consumers will rush to be indoors surrounded by others.

Away faces staff revolt as employees call for Steph Korey to step down

Employees at Away are calling for founder and co-CEO Steph Korey to immediately resign, after a photo of her dressed as a Native American surfaced on Twitter last Friday. In an anonymous letter to Korey’s co-founder Jen Rubio, and her co-CEO Stuart Haselden, employees wrote: “How many times will we have our jobs disrupted by this woman who clearly has a history of poor judgement? We all have financial stakes in this business and she is putting that into jeopardy for all of us. She is turning Away into an embarrassment. We cannot be complicit any longer. Steph Korey must go.” It’s the second anonymous letter Away executives have received in recent weeks. The first came after Korey posted a series of Instagram stories attacking the media over how it covers female founders. In response to employee concerns, Rubio and Haselden said Korey would be stepping down as co-CEO in 2020. But after the photo surfaced, employees demanded it happen immediately, and that Korey stop being the public face of the company.

Hertz, Creditors in $11 Billion Standoff Over 494,000 Used Cars

Bankrupt Hertz Global Holdings Inc. and its bondholders are squaring off over how to shrink its nearly half-a-million vehicle fleet. Market watchers say the outcome could upend the multi-billion dollar lease-backed ABS industry. The cars are housed in an entity linked to Hertz’s asset-backed securities and leased to the rental giant. Normally, when a company with ABS files for bankruptcy, it must choose to confirm or reject the entire master lease tied to the debt. If it keeps the lease, it has to continue making payments on the vehicles as it offloads them piecemeal. If it walks away, all of the collateral is liquidated to pay back bondholders. Hertz wants a judge to allow it to convert the master lease into 494,000 separate agreements so it can reject the terms on 144,000 vehicles. That would allow Hertz to save roughly $80 million a month while it hangs onto the remainder of the cars as it seeks to emerge from bankruptcy a viable company. If the motion fails, Hertz may press for a reduction in payments to creditors.

Las Vegas casinos dealt new threat amid coronavirus resurgence

A resurgence of new COVID-19 cases is dealing a fresh blow to Las Vegas casinos by driving business away from Sin City and toward regional locations. Daily new COVID-19 case counts in the U.S. surged to a record high 57,209 last week as several states, including Nevada, saw infections reach a new peak. While daily deaths hold near their lowest levels since March, the uptick in cases has generated concerns that Las Vegas casinos could reclose their doors or slow reopening plans. Another consequence could be the hesitance of consumers to travel. Such outcomes would be detrimental to the recovery in destination markets like Las Vegas.

Technology & Internet

Walmart plans to launch Prime-like service

Walmart Inc. will introduce a subscription service this month to compete with Inc.’s Prime program, according to a person familiar with the plans. Walmart+, as the service is known, will cost $98 a year and include perks like same-day delivery of groceries and general merchandise, Recode reported, citing unidentified people. The retailer’s shares rose the most intraday in more than three months, reflecting investors’ expectations that the service could bring Walmart’s online business more on par with that of Amazon, which has become the default online shopping option for millions thanks to its own subscription program. During the pandemic, Walmart attracted many new customers who hadn’t shopped there before, and the benefits of a Walmart+ membership could convince some to stick around.


Uber to buy Postmates for $2.65 billion to expand delivery

Neither Uber Technologies Inc. nor Postmates Inc. are profitable. They’re hoping that a combination of the two businesses will somehow get them there. Uber said Monday it will spend $2.65 billion for the San Francisco-based food delivery company Postmates. The all-stock transaction is a bid to accelerate a path to profitability set by Uber CEO Dara Khosrowshahi and deliver growth rates once typical of Uber’s ride-hailing operation. Both aspects of that strategy rely on food delivery, which has gotten a boost from the coronavirus pandemic. The deal is a relatively modest outcome for Postmates, a pioneer of the gig economy that was outmaneuvered by deep-pocketed competitors. The privately held company had been valued at $2.4 billion in an investment last year, a person with knowledge of the matter said at the time. For Uber, the purchase comes at a reasonable price and could help lead to a rational—and perhaps someday, profitable—market.


Finance & Economy

It’s back-to-school sale season, but spending might look different this year

Retailers have a lot at stake in whether schools go back to in-class sessions. Total back-to-school spending in the U.S. is expected to amount to $28.1 billion, or $529 per student, according to Deloitte, which would be close to what families spent in 2019. But the big question is what will they buy?  Deloitte’s forecast predicts spending on clothing will drop some this year compared to the last three years. Meanwhile, spending on electronics might almost double what we spent in 2017.  It makes sense that laptop sales might increase if students are going to be working online. It also makes sense that clothing sales might not be as hot as usual if students expect to stay home more.


The coronavirus surge is starting to squeeze the U.S. job market

Workers filing for Pandemic Unemployment Assistance are on the rise again.  The U.S. labor market is sending troubling signals that the resurgence in COVID-19 cases is weighing on the economic recovery.  The latest weekly data on initial jobless claims showed that while claims fell to 1.31 million for the week ending July 4, an increasing number of workers filed for Pandemic Unemployment Assistance (PUA) for the fourth straight week.  Last week, 1.04 million people filed PUA claims for the first time, an increase of 42,000 over the prior week and up from 880,000 two weeks prior. “The news behind the headline numbers, which cover only regular state unemployment insurance programs, is disconcerting,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “The number of people claiming for Pandemic Unemployment Assistance— PUA, which is aimed at gig workers, freelancers, the self-employed and other people who don’t qualify for regular state programs—has increased in the past four weeks straight,” Shepherdson adds.