The Big Story

Back to School?

Billy Busko

“No more pencils, no more books.

No more teacher’s dirty looks.”

– Alice Cooper


This song favored by students is belted out every year at the end of the school year.   However, in these strange times, this song may have relevance at the beginning of this school year.

The Back to School season is critically important to the Retail/Consumer sector for two reasons.  First, while it lags the Holiday season by a wide margin, Back to School is the second largest spending season of the year, and it has a large lead over the third, fourth and fifth placed spending seasons, which are Mother’s Day, Valentine’s Day and Easter.  According to the National Retail Federation (“NRF”), total spending for these seasons in the last year amounted to $730 billion, $81 billion, $27 billion, $27 billion, and $17 billion, respectively.  The second reason Back to School results are important is they are seen as a harbinger of things to come for the Holiday season.  Companies carefully analyze Back to School performance as they refine Holiday merchandise assortments, pricing strategies and inventory levels.

Traditionally, the Back to School season is driven by spending on supplies related to children returning to school and colleges.  However, a great many school districts and colleges throughout the country are still deciding how and when to reopen their classrooms.  One might think that this would spell doom for retailers, but the COVID pandemic is expected to significantly boost sales because remote learning is not cheap.

The NRF released its annual Back to School spending survey last week.  It concludes that total spending will set a record and easily so.  Total spending is expected to reach $102 billion compared to the previous record of $85 billion.

“By any measure, this is an unprecedented year with great uncertainty, including how students will get their education this Fall,” the NRF expressed.  “Most parents don’t know whether their children will be sitting in a classroom or in front of a computer in the dining room or a combination of the two, but they do know the value of an education.”  In the survey, 55% of consumers said they expect students to take “at least some” classes at home this Fall.

Parents of students in kindergarten through high school expect to spend $790 per family compared to last year’s purchases of $697.  Total spending on students in this age range is projected to amount to $34 billion, a marked increase from $26 billion last year and the record of $30 billion in 2012.

The college crowd has larger spending habits.  This segment is expected to spend an average of $1,060 per family, bettering last year’s expenses of $977.  Total spending on college students is expected to be $68 billion, a substantial increase from $54 billion last year and the record of $55 billion in 2018.

The Back to School season will reflect a shift in consumer spending patterns toward digital purchases such as laptops, tablets, smartphones and headphones to facilitate online classes.  A recent Deloitte survey concluded that tech spending will increase 28% this year over last year.  Other increasingly popular items are expected to be home furnishings such as study desks and chairs.  Lastly, a relatively unnoted category previously will now be a focal point:  personal health.  Hand sanitizer, wipes, masks, paper towels and disposable cutlery are items rarely found in these shopping carts until this year.

The timing of Back to School shopping has been consistent over the years with the kick-off date in recent seasons marked by Amazon’s Prime Day in July.  However, parents have deferred purchases this year as they await school opening updates.  Even Amazon has postponed its Prime Day until September.  As a result, consumers at this point have only finished 17% of intended purchases when in prior years the bulk would have been completed.

Lastly, but predictably, online retailers are forecasted to benefit the most as all other shopping destinations are expected to see declines including department stores, clothing stores and even discount stores.

With all of the serious economic challenges created by the pandemic, the overall NRF forecast may seem bullish, but recent consumer spending is supportive.  June retail sales reflected the first year-over-year gain of 2020.  Moreover, the NRF is right about one thing – the value of an education.

Postscript – Interesting factoids:

  1. Students in nursery school, elementary school and high school total 9 million, 33 million and 17 million, respectively. There are 8 million teachers.
  2. The average backpack weigh’s 20% of a student’s weight.
  3. The tradition of giving an apple to a teacher originated in Denmark and dates back to the 16th Teachers did not earn enough money to support themselves, and parents sent their children to school with apples for them.


Headline of the Week

Walmart says all customers will be required to wear masks

Walmart will require customers to wear masks in its more than 5,000 stores in an effort to curb the spread of the coronavirus, the company announced Wednesday. Beginning July 20, the nation’s largest retailer will mandate face coverings at all its stores, including Sam’s Club. The company will provide complimentary masks for customers who come in without one, or masks can be purchased in the store. “While we’re certainly not the first business to require face coverings, we know this is a simple step everyone can take for their safety and the safety of others in our facilities,” the company wrote in a joint statement from Walmart Chief Operating Officer Dacona Smith and Sam’s Club Chief Operating Officer Lance de la Rosa.



Apparel & Footwear

PVH to close Heritage Brands stores, cut 450 jobs

PVH Corp. on Tuesday said it will permanently shutter its 162 Heritage Brands outlet stores by mid-2021. The brands with company-run stores are Izod, Van Heusen and Warner’s, according to the company’s 2019 fiscal year summary. The company’s Tommy Hilfiger and Calvin Klein retail stores aren’t affected. The company will also cut 450 positions or 12% of its workforce, according to a press release. The company expects the workforce cuts to save $80 million annually. PVH expects the changes to cost about $80 million in pre-tax charges over the next 12 months — mostly severance, lease termination costs, inventory markdowns and noncash asset impairments — about $10 million of that is expected to be noncash.

Parent company of New York & Company files for bankruptcy

RTW Retailwinds has filed for Chapter 11 bankruptcy protection with plans to close many, if not all, of its 378 stores. The filing was not unexpected. In a filing with the Securities and Exchange Commission in June, RTW called bankruptcy “probable,” citing the adverse impact of COVID-19 on its operations. The retailer noted that, prior to the pandemic, it planned to accelerate its strategy to reposition itself as a digitally dominant retailer, which included the closing of 150 of stores during the next 18 months. In its Chapter 11 filing, RTW said it expects to close a significant portion, if not all, of its brick-and-mortar stores and has launched a store closing and liquidation process. The retailer is evaluating any and all strategic alternatives, including the potential sale of its eCommerce business and related intellectual property. The RTW portfolio includes branded merchandise from New York & Company, Fashion to Figure, and Happy x Nature.

Los Angeles Apparel’s factory shut after 300 workers contract coronavirus

Clothing maker Los Angeles Apparel is under orders to stay closed following an outbreak of the coronavirus that public health officials say killed four of the garment manufacturer’s workers and infected more than 300 others. The closure order last Friday comes as California battles a new wave of infections, with Governor Gavin Newsom on Monday announcing statewide closures of restaurants, bars, movie theaters, museums and other establishments that host patrons indoors. Public health officials said they initially shut down operations at the Los Angeles factory owned by Dov Charney on June 27 after finding what they called “flagrant violations of mandatory public health infection control orders.” The clothing maker, which had reopened as an essential business in order to make face masks, also failed to cooperate as health officials investigated reports of an outbreak, according to the Los Angeles County Department of Public Health. A medical worker on June 19 notified the regulator of a possible outbreak at the plant, with three workers dying of COVID-19 in June and another in early July, the city’s health department said.

J.Jill in new bid to avoid bankruptcy

J.Jill has once again kept a bankruptcy filing at bay. The struggling women’s apparel retailer, which operates 280 stores, said Thursday it has reached an agreement with lenders to extend a forbearance period to July 23 to give the company more time to complete negotiations. “We remain engaged in productive discussions with our lenders, and today, our lenders extended the forbearance period under the existing forbearance agreements, which provides additional time for us to complete negotiations,” stated interim CEO Jim Scully. “We are making progress with the negotiations and expect a resolution soon.” As previously announced, J. Jill entered the forbearance agreements in mid-June after falling out of compliance with certain covenants on its asset-based lending and term loan credit facilities amid the COVID-19 pandemic. In a 10-K filing at the time, the company said it had doubts about its ability to remain a “going concern.”


Athletic & Sporting Goods

Bridge Lake Partners Completes Acquisition of Siege Sports

Siege Sports, the premier supplier in custom athletic uniforms and apparel, announced the completion of its acquisition by Bridge Lake Partners, a private investment firm. The transaction was finalized at an undisclosed amount.  Siege Sports, founded in 2012, is the leading provider of custom athletic uniforms and apparel.

As Under Armour exits lacrosse, Maryland signs with new provider

With Under Armour struggling financially, the Baltimore-based company has seemingly divested its lacrosse equipment business. Under Armour recently confirmed to the Baltimore Business Journal that it has stopped providing lacrosse equipment to the University of Maryland after nearly a decade of providing sticks, gloves and protective equipment to Maryland’s men’s lacrosse program.  IMS has learned that Maryland has inked a new contract for its equipment, with New York-based Maverik Lacrosse.  It’s another sign of the times for Under Armour, which has been hemorrhaging money and thus is trying to wriggle out of its 15-year, $280 million sponsorship deal with UCLA.

Iconic Gold’s Gym to be acquired by German fitness group for $100 million

Dallas-based Gold’s Gym is set to be acquired by the German fitness company RSG Group for an estimated $100 million.  Amid the economic pressure of pandemic lockdowns, the fitness chain filed for Chapter 11 bankruptcy protection May 4 in order to restructure its debt and close locations. Gold’s closed 32 clubs as part of the bankruptcy, including three in the Dallas area.  The gym chain will emerge from bankruptcy with 61 company-owned gyms and more than 600 franchise locations, according to RSG Group. The sale is subject to U.S. Bankruptcy Court approval on July 24.  Dallas billionaire Robert Rowling’s holding company, TRT Holdings Inc., has owned Gold’s Gym since 2004, when it purchased it for $158 million.

Cosmetics & Pharmacy

Personal Care Company Beast Brands Receives $3M In Series A Funding

Beast’s bank account has gotten quite a bit bigger. The personal care brand known for invigorating formulas has raised over $3 million in a series A round led by Callais Capital Management with participation from Sand Hill Angels and Capital Innovators, one of two accelerators it’s participated in. The Brandery is the other. In a tough environment for VC deals, the round demonstrates strong investor confidence in Beast, a direct-to-consumer specialist that’s kept consumers’ bathrooms stocked with staples amid the pandemic. This year, Beast’s growth has been exponential. President and founder John Cascarano projects it could generate as much as $5 million in sales, up from $1.5 million in 2019. Sales of Beast’s hero items Wash for Everyone and Bar Soap have spiked 220% during the global health crisis as homebound shoppers turn to e-commerce to purchase everyday personal care. Its average order value has jumped to $50 from $39 prior to COVID-19.

Social Bella Lands $58 Million in Series E Funding

Indonesian start-up Social Bella secured $58 million in a Series E funding round from existing investors Temasek, Pavilion Capital, and Jungle Ventures. Founded in 2015, Social Bella has evolved from an e-commerce platform to a physical and digital ecosystem. To date, it has six physical stores across Indonesia, opening a flagship omnichannel store last year. In addition to the online and offline platform Sociolla, Social Bella also offers an end-to-end distributor service for beauty and personal care brands. It also operates the consumer review platform SOCO as well as beauty and lifestyle online media Beauty Journal, which also provides an online-to-offline marketing service. The company’s latest venture is Lilla by Sociolla, a beauty and personal care e-commerce service designed for “young and sophisticated mothers.”

Medly Pharmacy Raises $100M Series B to Accelerate Growth in Digital Pharmacy Services

Medly Pharmacy (Medly), an industry-leading full-service digital pharmacy, today announced the close of their $100M Series B funding round co-led by Boston growth equity firm Volition Capital and seed-to-growth venture capital firm Greycroft with participation of Horsley Bridge and Lerer Hippeau. Launched in 2017, Medly has quickly grown into a category-leading digital pharmacy known for continuously innovating and setting the leading edge of the fast-growing $500B digital pharmacy segment. Medly has invested heavily in customer experience as well as the underlying pharmacy technology that creates value for stakeholders across the entire healthcare ecosystem. Since its inception, Medly has grown 100X in revenue, added 15,000 providers, 50,000 patients, and delivered over 500,000 prescriptions. The company has a net promoter score of 87, which is 4.5 times greater than the average pharmacy.


Discounters & Department Stores

Macy’s, Neiman Marcus look to resume exec payments as department store woes continue

Macy’s has resumed its equity bonuses for top executives after a protracted closure period, emergency financial measures, and recently announced corporate staff layoffs. The awards going to more than a dozen executives were worth millions, including more than $3.6 million in company stock to CEO Jeff Gennette (at the time of the award). Macy’s board typically considers its equity grants at its March meeting, but opted to delay them this year because of the COVID-19 impact, the company explained in a July filing. A Macy’s spokesperson told Retail Dive in an email that the company would “fully describe” its 2020 compensation plans in its annual proxy filing.


J.C. Penney announces plan to cut 1,000 jobs, gets more time from lenders in push for survival

J.C. Penney will lay off about a thousand employees as it hashes out a plan with its lenders to emerge from bankruptcy. The struggling retailer filed for court protection on May 15, with roughly 860 stores and about 90,000 full-time and part-time employees. It has announced plans to close about 170 stores in recent weeks, though negotiations with landlords are ongoing. On Wednesday, it said it expects about 152 closures. To match its shrinking store base, J.C. Penney said Wednesday it will lay off about 1,000 workers, in roles that include corporate and international positions. Those workers will receive a benefits package that includes severance and health-care coverage for eligible associates.



Emerging Consumer Companies

Nuggs raises from Lerer Hippeau and others

Nuggs, the alternative-meat company that launched as a direct to consumer chicken nugget replacement, announced the closing of a new investment round and a company rebrand. The latest round of $4.1 million was led by Lerer Hippeau, with participation from AgFunder, Reddit co-founder Alexis Ohanian, former Whole Foods chief executive Walter Robb and model Jasmine Tookes. Earlier investors include McCain Foods, MTV founder Bob Pittman, and Casper founder Neil Parikh. The company also announced its rebrand to Simulate, with soon to launch products like spicy nuggets, a “chicken burger product” and a hot dog.

OffLimits cereal launches

Socially responsible cereal and culture brand, OffLimits, has launched. The company was founded by Emily Elyse Miller, author of “BREAKFAST: The Cookbook,” who started the company to, among other things, root out sexism in the cereal aisle – cereal mascots, for example, have traditionally been male. OffLimits will launch with two flavors and their accompanying characters: Dash melds equal parts Intelligentsia coffee and cacao; and Zombie is infused with adaptogens for relaxing vibes with vanilla, pandan, and ashwagandha flavors.


Tiff’s Treats raises $15 million

Tiff’s Treats, an Austin-based cookie delivery company, announced that it had raised $15 million from investors that include former NBA star Dirk Nowitzki and jewelry designer Kendra Scott. The company was founded in 1999 by Tiffany Taylor and Leon Chen, then students at the University of Texas at Austin. Today, it operates 59 stores in Texas, Georgia, Tennessee and North Carolina and employs more than 1,400 people.



Grocery & Restaurants

Instacart is suing Uber’s grocery delivery service Cornershop

Instacart is now waging a legal battle with Uber’s Cornershop grocery service at a time when both companies are looking to capitalize on growing demand for food deliveries during the pandemic. On Thursday, Instacart filed a lawsuit against Cornershop, a new grocery delivery competitor in the US, over allegedly stealing thousands of its copyrighted and licensed images, along with product descriptions and pricing data. “Today, Instacart filed a lawsuit against Cornershop after the company failed to comply with a cease and desist demanding it stop stealing our catalog and using our misappropriated intellectual property,” said Instacart in a statement to CNN Business. “The lawsuit makes clear that Cornershop is engaging in a systematic effort to illegally steal Instacart’s proprietary catalog while attempting to conceal that theft for its own commercial benefit.” In a statement, Uber framed Instacart’s lawsuit as an attempt to stifle new competition.


California closes indoor restaurants, movie theaters and all bars statewide as coronavirus cases rise

California Gov. Gavin Newsom ordered all bars and all dine-in restaurants, movie theaters, museums and other indoor businesses across the state to close Monday as Covid-19 cases continue to climb. The affected businesses include all operations at bars and the indoor operations at restaurants, wineries and tasting rooms, movie theaters, family entertainment centers, zoos, museums and cardrooms. All except for bars will be allowed to operate outdoors, if possible, he said. The order comes after Newsom previously ordered these businesses to close in counties on the state’s “monitoring list.” The new order, which will now apply across the state, is effective immediately, Newsom said.

Home & Road

Hammer Fine Furniture acquires Italmond

Hammer Fine Furniture, a company that produces custom case goods, upholstery and seating, has purchased custom furniture manufacturer Italmond from a private investor for an undisclosed price. Italmond manufactures a high-end line of bar stools, dining and accent chairs that complements Hammer Fine Furniture’s lineup, said Hammer owner Scott Prince. Italmond’s frames are handmade, custom-finished and upholstered in the company’s Log Angeles factory. Hammer’s products are made exclusively in the U.S. Prince, who said he plans to invest “heavily” in the Italmond brand, noted that Italmond’s appeal lies in its ability to customize products for both contract customers and high-end designers. He said each company will retain its unique product line and design niches, as well as its respective sales force and website.

Retail mattress sales post double-digit gains in June, survey says

Retail mattress sales continue to show improvement, posting double-digit gains in June, a new retail survey says. Piper Sandler’s June Mattress Retailer Survey found that total retail dollar sales were up by a mean of 11.6% in June, following significant declines in May (down by a mean of 16.8%) and April (down by a mean of 69.4%). Total unit sales were up in June by a mean of 7.8%, the firm reported. In its commentary with the survey results, Piper Sandler noted that July 4th weekend sales “were also positive and slightly better than June overall.” Retailers reported a 10% mean increase in written sales for the July 4th weekend compared to the same three-day period last year. Memorial Day sales were down by a mean of 8%. The firm also noted that the second quarter mattress sales decline of 11.8% was much better than the declines of 20% to 25% retailers had been forecasting at the end of May. In addition, Piper Sandler said retail expectations about third quarter business are positive.

Sleep Number sees ‘significant impact’ of COVID-19, net sales down 20% in Q2

Sleep Number Corp. said its second quarter financial results reflected the “significant impact” of the COVID-19 pandemic. Net sales were $285 million, down 20%. The company also reported high-single digit demand growth for the last two months of the quarter combined. Sleep Number said that more than 95% of its retail stores are now open compared with 53% that were open on average during the second quarter, which ended June 27. It also reported that cash and liquidity available under its credit facility was $295 million at the end of the second quarter, a $129 million increase vs. the same period last year.

Jewelry & Luxury

De Beers Group Invests in Try-and-Buy Jewelry Brand Gemist

The possibility of a “Warby Parker for fine jewelry” debuting and disrupting the status quo of jewelry retail has been anticipated within the industry for years. Why? Despite impressive individual efforts to nudge it forward, fine jewelry retailing—which represents the last of the independent retailers in many U.S. cities and towns—is as a whole in need of modernization. Direct-to-consumer digital jewelry brands such as Frank Darling, Rocksbox, and AUrate have innovated in the space with slick, easy-to-navigate websites that allow for limited customizations. All three offer try-at-home boxes of jewels, in the style of pioneering eyeglasses retailer Warby Parker.

De Beers Group Appoints Sarah Kuijlaars Chief Financial Officer

De Beers Group announced on Wednesday that it’s named corporate veteran Sarah Kuijlaars its chief financial officer. Effective Sept. 1, she will join the De Beers Group board and executive committee. Her appointment follows the April 2 resignation announcement of current CFO Nimesh Patel, who will leave De Beers Group on July 26 for his new post as CFO and executive director of Spirax-Sarco Engineering.

GIA Device Identifies Natural and Lab-Grown Diamonds Within Seconds

Lab-grown diamonds have been around for decades, but with improved commercial quality and an increased quantity of these stones in the marketplace, it’s increasingly important for jewelry retailers and consumers to be able to distinguish what is man-made from what is natural. To satisfy this need, the Gemological Institute of America (GIA) has developed a small device that can distinguish natural diamonds and refer lab-grown diamonds and diamond simulants for further testing with 100% accuracy.

Richemont sees sales fall 47% after lockdown hit luxury goods sector

Luxury goods firm Richemont, behind brands such as Cartier, Chloé and Piaget, said sales in the first quarter tumbled 47%. The company said it has seen a “strong impact” from Covid-19 in the three months to June 30. It had to close shops when lockdowns in different countries started. In England, firms had to shut in March, and non-essential retailers could only open from June 15. Sales fell 47% to €1.99 billion, and Richemont said the performance “reflected unprecedented levels of disruption and widespread temporary closures of internal, franchise or multi-brand retail partner stores, as well as the closure of online distributors’ fulfilment centers”.


Office & Leisure

Cirque du Soleil Seals Deal with Lenders for Assets and Cash

Cirque du Soleil Entertainment Group agreed to back a purchase agreement from a group of its secured lenders, setting the minimum acceptable bid in its court-supervised sales process. A committee of creditors that includes existing first lien and second lien lenders struck a deal with Cirque to acquire substantially all of the entertainment company’s assets in exchange for the cancellation of existing debt, Cirque said in a statement Thursday, confirming a Bloomberg story. Cirque is scheduled to present the new restructuring plan, which also includes as much as $375 million in new capital, to a Quebec court on Friday. If the agreement is approved by the judge, it will serve as the new stalking-horse bid for the company, setting the floor price for other parties. Other potential bidders would have until Aug. 10 to present competing proposals, and an auction would happen no later than Aug. 17. The offer will replace a stalking-horse bid made in June by Cirque shareholders TPG, China’s Fosun International Ltd. and Caisse de Depot et Placement du Quebec.

Disney World reopens Epcot, Hollywood Studios as coronavirus cases surge in Florida

All four of Walt Disney World’s theme parks are officially open to guests looking to soak up some magic and fun during the pandemic. The parks were the last of Orlando’s major theme parks to reopen after being shuttered since March. The parks have undergone many changes to help create a safe environment for both workers and guests. Disney employees won’t be allowed to take photos of visitors in front of Cinderella’s Castle since it involves touching the tourists’ cameras. There will be no live shows at Disney World since the reopening has caused a labor dispute between Disney and its actors and singers. Hand sanitizer stations have been placed around the park, and physical distancing cues and guidelines could be seen on the ground.

Hotels are selling out in popular US vacation spots this summer

If there was any doubt whether travel-starved vacationers would stay in hotels after months of lockdown due to Covid-19, it should be gone now. Data indicates that US hotels located in popular vacation destinations, many of which reopened in May and June, are booked for the summer season. While nationwide hotel occupancy is nowhere near pre-pandemic levels, Carter Wilson, a senior vice president of consulting and analytics for the hotel research company STR, says that people are indeed checking into properties, especially ones close to beaches and national parks and on weekends. Luxury hotels in summer getaway hotspots, like the Jersey Shore in New Jersey, are finding business is booming, and are at (albeit reduced) capacity for most, if not all, of the summer.

Technology & Internet

Ecommerce stocks ride a pandemic wave—at least for now

Ecommerce stocks have been among Wall Street’s standout performers during the pandemic, but the group’s massive share-price gains could be at risk if their results fail to live up to elevated expectations, analysts said. Companies involved with online commerce and related technology have seen a surge in demand as the coronavirus shut down brick-and-mortar rivals. As a result, many stocks have doubled, tripled or seen even larger gains since March, when shelter-in-place orders were issued across the U.S. “Many ecommerce companies are now priced for perfection, and while they have this fundamental tailwind, the moves have been based more on momentum than fundamentals,” said Brian Yarbrough, a consumer analyst at Edward Jones, in a phone interview. “People have piled into names that are seen as COVID safety plays, and the advances have been awfully fast and awfully big. I’m not sure how many will be able to justify the moves; you’d have to see very outstanding results for further upside.”

Twitter says 130 people were targeted in hack that hijacked accounts of Elon Musk, Joe Biden

Twitter said late Thursday that about 130 people were targeted in a cyberattack that took control of high-profile accounts to promote a bitcoin scam. The hackers received $121,000 from over 400 payments to three separate bitcoin addresses, according to blockchain analysis firm Elliptic. Roughly half of those payments were made from U.S.-based cryptocurrency exchanges, Elliptic added. “Based on what we know right now, we believe approximately 130 accounts were targeted by the attackers in some way as part of the incident,” the social media firm tweeted. “For a small subset of these accounts, the attackers were able to gain control of the accounts and then send Tweets from those accounts.” The hack, which took place on Wednesday, compromised the accounts of several prominent figures in business and politics.


Finance & Economy

U.S. retail sales snap back; high unemployment, rising COVID-19 loom over recovery

U.S. retail sales rose more than expected in June as consumers bought big-ticket items like motor vehicles and dined out, but a resurgence in new COVID-19 cases is chipping at the budding recovery, keeping 32 million Americans on unemployment benefits.  Economists attributed the second straight monthly increase in retail sales reported by the Commerce Department to the government’s additional weekly $600 checks for the unemployed, a benefit that is set to end on July 31. The expiration of the program will leave millions of gig workers and the self-employed among others, who do not qualify for regular state unemployment insurance, without an income.


Home-builder confidence rises in July as Americans look to move to the suburbs

The number of COVID-19 cases may still be rising significantly across many parts of the country, but home-builders’ outlook on the housing market continues to improve.  “Builders are seeing strong traffic and lots of interest in new construction as existing home inventory remains lean,” NAHB Chairman Chuck Fowke, a custom home builder from Tampa, Fla, said in the report. “Moreover, builders in the Northeast and the Midwest are benefiting from demand that was sidelined during lockdowns in the spring.  “New home demand is improving in lower density markets, including small metro areas, rural markets and large metro exurbs, as people seek out larger homes and anticipate more flexibility for telework in the years ahead,” Robert Dietz, chief economist at the National Association of Home Builders, said in the report. “Flight to the suburbs is real.”