The Weekly Consensus

The Supply Chain Is Improving, But Problems Linger

Shane O'Grady

In March of last year, my colleague Marshall Schleifman wrote in this space about the meteoric rising cost of shipping ocean freight – one of the many negative outcomes of disruptions and imbalances in the global supply chain. As tracked by the Global Freightos Baltic Index (below), China/East Asia to North America West Coast container shipment prices increased roughly 800% during the pandemic. The index peaked in September 2021 and went sideways (with some volatility) for several months before beginning a substantial decline this spring. However, at roughly $6,500 per container, shipping costs have a long way to go to reach their roughly $1,500 pre-pandemic level. Current economic conditions may continue to push global freight costs lower in the near future, but several factors could prevent a full return to normalcy.

During the pandemic, increased demand for imported goods, disruptions at ports, and delays in shipping container manufacturing resulted in major shortages of containers in Asia, fueling the surge in shipping costs.

However, for now, shipping costs are headed in the right direction. One reason for the decline is that North American retailers are cutting new orders, resulting in less demand for shipping containers. This is a result of inventories finally building back to pre-pandemic levels at the same time that many economists are predicting an economic slowdown. According to, the value of Amazon’s total inventories at the end of the first quarter was up 47% compared to the same period last year while its sales in North America only rose 8%. Amazon was not alone. Target slashed earnings expectations twice within three weeks when reporting second quarter earnings because of its plans to “right-size” inventories. Also, shipping capacity in China is improving as COVID restrictions have eased at many ports. According to supply chain visibility platform FourKites, since early March, volumes are up 35%, 25%, and 27%, respectively, at the ports of Ningbo-Zhoushan, Shenzhen, and Hong Kong. At the port of Shanghai, volumes have improved roughly 20% since mid-May.

Despite these positive trends, other supply chain issues continue to linger. One major issue is the Russia-Ukraine war. The war has driven up the cost of oil and fuel, which shipping carriers are forced to pass on. Further, air freight carriers must now avoid Ukrainian and Russian airspace, limiting capacity and driving up the cost of shipping by plane, which drives more demand and higher prices for ocean freight. Another inflationary pressure on the horizon for shipping costs is the potential for stricter environmental regulations. Philippe Salles, Vice President of Strategic Solutions (Ocean) at FourKites predicts, “I expect new emissions regulations to come from the International Maritime Organisation (IMO) in 2023, which will likely result in a reduction of ship speeds.” This would effectively reduce capacity in the global ocean shipping system and push up costs.

Ultimately, the recent retreat in ocean freight costs gives importers both a little breathing room relative to last year and reasons for optimism. Covid-related shipping container imbalances and port disruptions, and war-inflated fuel costs are also temporary (at least theoretically). Still, it is likely that shipping costs will remain elevated for the time being. As is the case with many things that were thrown off kilter by the pandemic, the wait to return to “normalcy” may still be a while.




Headlines of the Week

Amazon to buy One Medical for $3.9 billion as it expands healthcare footprint

Amazon on Thursday said it has entered an agreement to acquire primary healthcare company One Medical in an all-cash deal valued at approximately $3.9 billion. One Medical is a membership-based primary care service that promises customers “24/7 access to virtual care.” The company operates in a dozen major US markets, according to its website, and works with over 8,000 companies to offer One Medical health benefits to their employees. In a statement Thursday announcing the acquisition, Neil Lindsay, senior vice president of Amazon Health Services, said the e-commerce giant thinks “health care is high on the list of experiences that need reinvention.” Lindsay added that Amazon hopes to be one of the companies “that helps dramatically improve the healthcare experience over the next several years.”



Apparel & Footwear

Rebag Adds Apparel And Footwear

Rebag, the luxury resale marketplace founded in 2014 with a focus on handbags, accessories, fine jewelry and watches, is expanding its offerings with select apparel and footwear. In a statement, Rebag said the introduction of shoes and select apparel would bring a more diversified selection to and Rebag stores. The expansion allows Rebag to begin collecting further insights on the luxury resale industry in these categories while growing its technical capabilities to advance product knowledge. Rebag will buy and sell shoes, including sandals, sneakers, heels, boots, loafers, and select apparel, including outerwear, jackets, vests, sweaters, and sweatshirts, from existing labels, including Chanel, Gucci, Hermes, Louis Vuitton, and Fendi while accepting luxury designers, including Adidas, Balmain, Common Projects, Maison Margiela, Manolo Blahnik, Jordan, Yeezy, Rick Owens, and Vetements. The announcement follows Rebag’s recent partnership with Moda Operandi, featuring a digital trunkshow, the launch of Rebag Rewards, a multi-tiered loyalty program, and the launch of Trade, a feature that allows consumers to buy and sell items in a single transaction.

Designer Nancy Gonzalez Charged With Smuggling, Conspiracy by U.S. Dept. of Justice

Accessories designer Nancy Gonzalez has been indicted by the U.S. Department of Justice on charges of illegal smuggling and conspiracy. The designer is being extradited in a joint effort between U.S. and Colombian authorities and will be tried in the U.S. If convicted, Gonzalez faces a maximum total sentence of 25 years in prison and her business is subject to $1 million in fines. The Colombian-based label known for its use of exotic skins has been a prominent name in the luxury accessories business since the early 2000s. It was even cited in “The Devil Wears Prada” as part of Anne Hathaway’s fashion makeover and was a key resource for the accessories departments of major global luxury stores. Judging from court records filed in the Southern District of Florida, the Department of Justice began its investigation into Gonzalez’s operations in 2016. That year, the brand told WWD that it was selling some 79,000 bags a year. Exotic skin accessories are heavily regulated by the U.S. government and all trade must have documentation and comply with CITES rules [Convention on International Trade in Endangered Species of Wild Fauna and Flora]. Court documents allege that the Gonzalez label paid people to fly from Colombia to the U.S. with its handbags in their luggage. When intercepted at Customs, the individuals carrying Gonzalez’s bags said they were gifts for friends in the U.S.

Esprit plans Asia comeback with departure from fast fashion

Esprit Holdings Ltd, the once high-flying Hong Kong fashion retailer before it tumbled into years of losses, is planning a comeback in Asia, pivoting away from a fast-fashion strategy where it failed to compete with brands such as Zara and H&M.  The company is now focusing on better-quality clothing that’s more expensive than fast-fashion apparel but more sustainable, chief executive officer William Pak said in an interview with Bloomberg Television. It’s also returning to Asia after closing all 56 stores in the region in early 2020 amid Covid-19-induced lockdowns. While the focus will remain on e-commerce, the company wants to have at least one signature store in key Asian markets, where it also has an online presence, Pak said. It has launched online platforms in South Korea, Hong Kong, Taiwan and the Philippines, and plans to expand into mainland China, Singapore, and Thailand by year end. Esprit’s changing strategy comes as the fast-fashion model faces increasing criticism over environmental, social and governance issues, such as wastefulness, questionable sourcing of materials and sweat-shop manufacturing. The company, which became a global household name in the 1980s and 1990s, is hoping to create a clean and youthful image to return to those heydays of double-digit growth.

Hands-Free Shoe Brand Kizik To Launch Kids’ Shoes, Retail Stores After $20 Million Series B Funding Round

Hands-free footwear company Kizik will launch a line of kids’ shoes and roll out retail stores across the U.S, which will be a first for the direct-to-consumer brand. The Utah-based footwear company will fund its expansion with a newly announced $20 million series B funding round that closed in April, the company announced on Tuesday. Consumer-focused private equity fund The Newcastle Network led the round. “After our customers have worn Kizik shoes, the number one question they’ve asked is, when will you make kids’ shoes,” CEO of Kizik Monte Deere told FN in an interview. Deere also noted how having slip-on footwear can be a major time-saver for young kids and parents on-the-go. Kizik is the successful footwear brand offspring of HandsFree Labs Inc., its parent company that licenses out hands-free footwear technology solutions. HandsFree Labs secured a strategic minority investment from Nike Inc. in November of 2019, when it entered an intellectual property licensing partnership which allows Nike to use its portfolio of hands-free footwear technology.

From pizza earrings to tie-dyed scrunchies: inside Claire’s remarkable turnaround

For generations of women, Claire’s conjures up powerful feelings of nostalgia. The brand has been a fixture of the retail landscape since 1971, catering to the unique sensibilities of tween girls. Over the past 50 years, Claire’s has steadily grown to become a global mega-brand. It now has 2,500 stores in 17 countries across North America and Europe, and partnerships with dozens of retailers including Galleries Lafayette in Paris and CVS, along with 11 million customers in its loyalty program. But a decade ago, as sales declined and foot traffic shrank, Claire’s hit choppy waters. In 2018, it filed for bankruptcy and closed 189 stores. But four short years later, the company has managed to right the ship. As retailers faltered during the pandemic, Claire’s grew: Last year, it generated $1.4 billion in revenue and swung a profit, with sales increasing by 51% over the year before. Now, not only has it exited bankruptcy, it has filed for an IPO that could raise $100 million.



Athletic & Sporting Goods

Fiume Capital and Juggernaut Capital Partners Acquire Thrill One Sports & Entertainment

Fiume Capital and Juggernaut Capital Partners have announced their acquisition of Thrill One Sports & Entertainment from The Raine Group and Causeway Media Partners. Dyrdek Machine, UFC President Dana White and television producer Craig Piligian have co-invested, with acquisition financing provided by Prudential Private Capital.  Thrill One was formed in 2020 by uniting industry-leading brands Nitro Circus, Nitro Rallycross, Street League Skateboarding and Thrill One Media (formerly Superjacket Productions) to become the world’s leading producer of action sports events and original content. The latter two of these brands were both founded by entrepreneur Rob Dyrdek, who also participated in the acquisition as a co-investor via his venture creation business, Dyrdek Machine.  Fiume’s expertise in sports and media coupled with Juggernaut’s consumer focus will bring additional value to the company and continue to focus on serving the interests of a young, passionate fan base.

Nike debuts new store concept with Nike Style

Nike on Friday opened its latest store concept, Nike Style, in Seoul, South Korea. The athletics giant in a blog post described the store as a “remixed expression of sports retail culture that blurs the line between physical and digital.” In terms of assortment, Nike Style stores feature “gender agnostic lifestyle product zones” for certain clothing, including fleece, tops, footwear and accessories. Like some of Nike’s other concepts, Nike Style stores also include localized collections.  The athletics giant already has plans for a second Nike Style store, set to open in Shanghai in the fall, with “other countries” on the roadmap for the future. Nike did not immediately respond to a question about how big the fleet could grow.  As with many of Nike’s store concepts lately, Nike Style has tech baked into it. QR codes throughout the store allow shoppers to open augmented reality experiences tied to art installations and product innovation, a feature that was also recently on display at the Nike Live store in Los Angeles

Rawlings Acquires Jack Corbett Hollywood Bases

Rawlings Sporting Goods Company, Inc. (Rawlings), the Official Baseball, Helmet, Face Guard and Glove of Major League Baseball, has acquired the Jack Corbett Hollywood Bases brand from Schutt Sports, Inc. adding field bases and accessories to its list of officially licensed MLB categories. This strengthens Rawlings’ deep roots in the sports of baseball and softball while leveraging their expertise creating technologically advanced equipment for the highest level of game play.  This new business venture will enable Rawlings to add another MLB authentic on-field category to its extensive product catalog, resulting in additional opportunities within the memorabilia and collectible markets. The acquisition also ensures a long-term supply of the highest quality bases for use at the Major League level.  Jack Corbett, a former minor league player and manager, developed the Hollywood base design upon realizing bases of the time, filled with dirt, sand or sawdust, were too loose. His innovation added an underground stem to attach to the base for increased stability.

Cosmetics & Pharmacy

Chinese Facial Mask Giant Syoung Group to Buy Evidens de Beauté

Syoung Group, the parent company of Chinese facial mask giant Uniforn, said last week it intends to acquire the French-Japanese prestige skin care brand Evidens de Beauté for 49.5 million euros, or $50 million. Syoung Group also revealed that it has signed an agreement with major shareholders of the brand to purchase a little over 90 percent of the Paris-based company. Charles-Edouard Barthes, founder and chief executive officer of EviDenS de Beauté, will remain a shareholder and the company will retain its independence and current team. On top of running one of the most successful facial mask brands in China, Syoung Group is also the online distributor for beauty brands including Fenty Beauty, Dr. Ci:Labo, Albion, Neutrogena, Kiko and Lumene. Having been the brand’s exclusive Chinese distributor since 2019, Syoung Group expanded Evidens de Beauté’s retail network in China to high-end malls like SKP Beijing and Galeries Lafayette and opened online flagships on Tmall and WeChat. Founded in 2007 by Barthes, Evidens de Beauté started as a celebration of his Japanese wife Eriko Nakamura’s skin care routine with a touch of French elegance. Last year Evidens de Beauté made a net profit of 5.2 million euros on revenue of 19.7 million euros.

Fellow Barber Pens Deal to Merge with Rudy’s Barbershops

Fellow Barber, a New York-born chain of elevated barbershops, announced an agreement with Sortis Holdings, Inc. (“Sortis”) that will merge the grooming company with Seattle’s iconic Rudy’s Barbershop (“Rudy’s”). This merger will elevate the barbering industry and empower its combined workforce. It also aligns Fellow Barber with original lifestyle brands with purpose and impact. The Sortis team is building a platform that enables sustainable growth, cultural equity, and scalable innovations for brands with things to say. The goal is to unite consumer brands with a strong point-of-view and unique brand identities, a passionate customer base and a deep commitment to Environmental, Social, and Governance (ESG). With the market for upscale men’s grooming growing across the country, the merger with Rudy’s is a natural fit. Behind Rudy’s is Sortis Holdings, a Portland, Oregon-based platform company enabling highly scalable, experiential lifestyle brands to accelerate growth and impact. Sortis acquired Rudy’s out of bankruptcy in 2020, bringing back the brands co-founders to return the DNA that makes the Rudy’s experience so unique.

The NPD Group: Prestige Beauty Grew 16 Percent in Q2

Inflation is no match for prestige beauty. According to data from the NPD Group, prestige beauty sales in the U.S. grew 16 percent to $6 billion in the second quarter, driven by double-digit growth across categories. Despite macroeconomic pressures, the beauty consumer is more engaged than ever, said Larissa Jensen, vice president, beauty, the NPD Group. “The higher-income consumer is growing, we know from census information that the cohort of incomes over $100,000 per year has been growing in size over time,” she said. “The majority of our shopper base, about 47 percent of shoppers for prestige beauty, make over $100,000 per year.” That consumer, Jensen continued, “is more engaged, and better able to indulge because of inflationary pressure and recession fears. They’re not feeling those pressures as much as the lower-income consumers right now. Having to pay more for your groceries hurts everybody, but it really hurts the lower-income consumer more.”

Bath & Body Works sounds Q2 warning amid ‘inflationary pressures’

Bath & Body Works has lowered its second-quarter and full-year expectations, citing a “challenging operating and macroeconomic environment.” The specialty retailer said it now expects second-quarter sales to be down 6% to 7% compared to last year versus its previous guidance which called for a low-single-digit percent decline. Second-quarter earnings per share are now expected to be $0.40 to $0.42, down from its previous guidance for $0.60 to $0.65. “Our business continues to perform at levels significantly above pre-pandemic, although we are navigating a challenging operating and macroeconomic environment with inflationary pressure affecting our customers and our business,” said Sarah Nash, executive chair and interim chief executive, Bath & Body Works. (Andrew Meslow stepped down as company CEO in May for health reasons.) “Our team is executing well, and our agility and clean inventory position allow the company to effectively adapt to changing consumer demand and preferences.” Bath & Body Works expects full-year sales to be down mid-to-high single digits compared to last year versus its previous guidance of a low single-digit percent increase. The company reported net sales of $7.882 billion for the year ended Jan. 29, 2022, up 22% from the previous year. Bath & Body Works, along with Victoria’s Secret, was previously a part of L Brands. The two brands were spun off into two independent public businesses in August 2022.


Discounters & Department Stores

Macy’s to close a full-line store in St. Louis amid small-format expansion

Macy’s continues to inch away from the mall, in what it says is an acceleration of its off-mall, small-format brick-and-mortar strategy, with the opening of three “Market by Macy’s” locations and one off-price Backstage location. Among those, in Evergreen Park, Illinois, outside of Chicago, a Market by Macy’s and Backstage will share space, with Backstage taking the second floor, according to a company press release. That location will open in the fall. Market by Macy’s will debut at Chesterfield Commons in the St. Louis area at an undisclosed time, replacing a full-line Macy’s store in the area the company has decided to close. In addition, the banner will open at Johns Creek Town Center in Suwanee, Georgia, on Aug. 20, the third in the metro-Atlanta area.

Nordstrom names executives to lead marketing, private label

Deniz Anders was promoted to chief marketing officer at Nordstrom, replacing Scott Meden, who is retiring. She has been with the retailer for 22 years, most recently as vice president of marketing, according to a company press release. Nordstrom has also hired Nina Barjesteh, a senior executive at Dick’s Sporting Goods, to lead the Nordstrom Product Group private label business. Before Dick’s, Barjesteh was chief merchant at Rue 21, and spent 20 years at Target in various roles, including vice president and general merchandise manager of women’s apparel, vice president and merchandise manager of kids, and vice president of apparel and accessories branding.



Emerging Consumer Companies

Vitamin company, Perelel, raises $4.7 million in seed funding

Perelel, a Los Angeles-based women’s vitamin company, raised $4.7 million in seed funding. Unilever Ventures led the round and was joined by investors including Willow Growth Partners, M13 founder Courtney Reum, Bümo co-founder and CEO Joan Nyugen, Jenni Kayne CEO Julia Hunter, and other influencer angels. Launched in 2020, Perelel offers pre- and postnatal vitamins and supplements tailored for every stage of motherhood from pre-conception to postpartum. The brand is pioneering a new standard for supporting women with vitamins for every stage of their reproductive life cycle.

Halsey launches second beauty brand, AF94, exclusively at Walmart

American singer Halsey announces the release of her second beauty brand, af94, launching exclusively at Walmart on July 25th. In 2021, the singer launched her first beauty brand, about face, which offers highly pigmented products that are clean and vegan. The brand has been a quick success, landing on shelves in Ulta just a year after the brand’s launch. Then singer’s newest venture, af94 is a “made-to-play” makeup brand meant to inspire self-expression and evoke 90s nostalgia. With products priced at $10 and under, af94 was developed in partnership with Walmart to target Gen Z consumers and beauty novices through a low-price strategy.


Snapchat invests in Gen Z resale platform, Galaxy

Continuing its push into e-commerce, Snapchat participated in a $7 million round of funding for Gen Z fashion resale platform Galaxy last week. Floodgate, RGH Capital, Homebrew, among others, also participated in the round. Galaxy, which uses machine learning to help users discover new pieces of clothing, intends to use the proceeds from the round to develop more user-friendly features and increase opportunities for creators on the platform. While the secondhand U.S. market is expected to more than double to $82 billion by 2026, studies found that Gen Z and millennials are especially interested in resale, with 62% saying they look for secondhand options before buying new.



Food & Beverage

Cargill and Continental Grain Complete $4.5B Sanderson Farms acquisition

Cargill and Continental Grain Company completed their long-delayed $4.53 billion purchase of Sanderson Farms, the companies said in a statement. The acquisition was announced on August 9, 2021, and creates the third-largest U.S. poultry processor. Sanderson shareholders are receiving $203 per share.  The buyers said as part of the deal, they will combine Sanderson Farms with Wayne Farms, a subsidiary of Continental Grain, forming a new privately held poultry business. Clint Rivers, currently the CEO of Wayne Farms, will run the new venture called Wayne-Sanderson Farms.  The closing of the deal — which was expected to occur in December 2021 or early 2022 — was delayed by a Department of Justice review of the transaction.

Alt-meat maker Meati closes $150 million funding round

Mycelium-based meat analog maker Meati Foods closed a $150 million Series C funding round to help expand its production and accessibility. The round, which more than doubles the total amount Meati has raised since its founding five years ago, was led by Revolution Growth and included participation from both new and old investors. These include Cultivate Next, Chipotle Mexican Grill’s new venture fund, and Grosvenor Food & Ag Tech.  The company officially launched products under the Eat Meati brand at retail earlier this week, with its Classic Cutlet and Crispy Cutlet chicken analogs and its Classic Steak at three Colorado locations of Sprouts Farmers Market. Meati said its products will be available at all Sprouts locations by the end of the year, and it plans to have a national omnichannel presence by late 2023.  Fermented meat analog companies have been positioning themselves to make a big splash on the market in 2022. Analysts said this type of product development parallels the alternative protein sector’s strategy of appealing to both meat-eaters and vegetarians.

C-suite shakeup at Keurig Dr Pepper

Changes are underway in the Keurig Dr Pepper leadership team as Ozan Dokmecioglu prepares to take over as chief executive officer on July 29. Bob Gamgort, current chairman and CEO, said he was stepping down as CEO this past April. Derek Hopkins, president of cold beverages, is leaving the company at the end of the year. His role is going to be split into two positions — president of commercial and president of cold beverages, according to the company. Andrew Archambault, who currently serves as chief customer officer, has been promoted to the president of commercial role, effective Aug. 1. A search is underway for a new president of cold beverages.

Milk Moovement raises $20 million in Series A round

Canadian software developer Milk Moovement announced its recently closed Series A round drummed up $20 million. The company, which makes cloud-based dairy supply chain software, revealed the funding round led by VMG Catalyst will help it accelerate product development and make it possible for more dairy businesses in North America to use the software. Milk Moovement describes its platform as capable of helping facilitate a digital transformation for dairy companies by creating supply chain visibility for both dairy farmers and distribution partners along the supply chain.



Grocery & Restaurants

Starbucks will be closing ‘many more’ stores, Howard Schultz says in leaked video footage

Starbucks announced the closure of 16 stores across the U.S. this week because of health and safety concerns, and according to leaked videos of interim CEO Howard Schultz, these closures will not be the last. The video footage of an internal meeting at Starbucks was initially obtained by conservative Canadian blog, the Post Millennial, and shows Schultz talking about the issues facing his employees, concluding that “this is just the beginning” and that there will be “many more” Starbucks store closures to come, including profitable stores. “It’s shocked me that one of the primary concerns our partners have is for their own personal safety. […] We’re facing things the stores were not built for,” he said, adding that the major safety concerns are issues of homelessness, drug use and crime in and around many Starbucks stores. Schultz then goes on to blame local government leadership that has “abdicated their responsibility in fighting crime and addressing mental illness” for many of the health and safety issues and said that “we are going to have to transform and modernize” to meet changing needs of the customers, though in the footage shown, he did not give more details on what those changes might be.

Convenience store chain 7-Eleven cuts 880 corporate jobs as part of restructuring

Convenience store chain 7-Eleven has cut roughly 880 corporate jobs in the United States, CNBC has learned, roughly a year after it completed its $21 billion acquisition of rival C-store and gas station business Speedway. 7-Eleven is owned by the Japanese retail conglomerate Seven & i Holdings, which came under pressure earlier this year from the San Francisco-based investment company ValueAct Capital to consider strategic alternatives. ValueAct had been urging Seven & i to narrow its focus to 7-Eleven, and it backed a new slate of directors on the Japanese company’s board. More recently, businesses in the U.S. have been grappling with inflation on everything from fuel to labor to rent, which are weighing on profits. Many companies are now either hitting the brakes on hiring or beginning to lay people off, as they look for opportunities to slash expenses. 7-Eleven has also been contending with higher prices at gas pumps, which have led some consumers to hold off on filling up the tank, or buying extra goods inside of its retail shops.

Au Bon Pain owner Ampex Brands acquires fast-casual Bellagreen

Ampex Brands, which last June bought quick-service Au Bon Pain, has acquired the eight-unit fast-casual Bellagreen brand, the companies said Friday. Richardson, Texas-based Ampex, which franchises more than 400 locations of Pizza Hut, KFC, Taco Bell, Long John Silver’s and 7-Eleven convenience stores, completed its acquisition of Au Bon Pain in June 2021 from Panera Bread. Ampex bought 171 Au Bon Pain locations and franchising rights to an added 131 locations. Terms of the Bellagreen acquisition, finalized on July 18, from Dallas-based Bellagreen Holdings LLC were not disclosed. Bellagreen has six units in Houston and two in the Dallas area.

Home & Road

Two leading sleep products suppliers merge to become Rize Home

Rize, formerly known as Mantua, and Glideaway have just completed the merger to become a $150 million company selling through 3,000 retailers with more than 20,000 store fronts. The two third-generation, family managed companies have been “respectful” competitors for years, both selling bed frames, adjustable bed bases, mattresses, pillows and mattress protectors. When the COVID-19 pandemic hit in 2020, David Jaffe, CEO of Rize, and Zev Fredman, president of Glideaway, began having daily conversations centered around navigating the challenges of the pandemic. “I found those conversations incredibly useful,” Jaffe said. “We got into a rhythm of sharing best practices and strategies that were working. Those conversations kicked off a deeper conversation about what is good for our respective businesses and what we see in the future.” Under the Rize Home corporate name, the company will continue to produce Glideaway branded products and Rize products. Jaffe said the new corporate name is a “combination of the best of both brands” and that it offers flexibility to allow the company to expand into additional categories. Rize expanded into the upholstered bed category in 2021.

Lovesac explains strong e-commerce performance

Modular furniture retailer The Lovesac Company is putting a spotlight on the customer experience and supply chain to ensure success. Shawn Nelson, founder and CEO of the omnichannel direct-to-consumer retailer, recently sat down with Chain Store Age to discuss how Lovesac has been maintaining strong sales growth throughout the COVID-19 pandemic, including net sales of $129.4 million, up 56% from the prior year, in its most recent quarter. In addition to a thriving e-commerce business, Lovesac operates over 120 showrooms across the U.S. and partners with several other retailers.

Jewelry & Luxury

GIA, eBay Guarantee Jewelry Authenticity

Online marketplace eBay now includes fine jewelry in the recent expansion of its authenticity guarantee, and is collaborating with the GIA to verify the condition, quality, and accuracy of an eBay fine jewelry listing for potential buyers. Fine jewelry authenticated through this multi-point inspection process is marked on eBay’s marketplace with an authenticity-guarantee badge. Verified jewelry also receives an authentication card with a QR code, which allows the buyer to view its documentation and learn more about how it was verified. “The launch of authenticity guarantee for jewelry is an incredible milestone, and we’re thrilled by the immediate positive response we have seen from our communities of buyers and sellers,” says Tirath Kamdar, general manager of luxury at eBay.

For Richemont, Strong U.S. Q1 Sales Offset Slump in China

Richemont kicked off its fiscal year on a high note, posting double-digit sales growth. The luxury conglomerate, which owns high-end brands like Cartier and Van Cleef & Arpels, recorded sales growth across all channels. Its strong performance in the Americas, Europe, Japan, the Middle East and Africa offset lower sales in Asia-Pacific, particularly in China. Richemont started the year off strong. For the first quarter ending June 30, Richemont posted sales of €5.26 billion ($5.29 billion), a 20 percent year-over-year increase at actual exchange rates.

Signet Moves Up NRF’s List of ‘Top 100’ Retailers

Signet Jewelers has again made the National Retail Federation’s Top 100 Retailers list, advancing a dozen spots to land at No. 66. The jewelry giant was No. 78 last year. The list, compiled by market research firm Kantar Group, ranks the largest retail companies in the United States, based on 2021 annual retail sales. The NRF says it uses “a variety of estimation techniques” to calculate its figures, so the sales figures on its list may differ from the companies’ official public filing reports. This is the case with Signet, which reported total sales of $7.8 billion last year. The NRF, however, has Signet’s total retail sales at $6.95 billion in 2021. Signet’s U.S. sales, according to its calculations, totaled $6.14 billion in 2021, a 31 percent increase year-over-year.

Europe’s High-Spending Tourists Set to Lift French Luxury Sales in Q2

Free-spending tourists in Europe are expected to drive brisk second quarter sales at French luxury groups LVMH, Gucci-owner Kering and Hermes, helping to offset the impact of disruptions in China from COVID-19 restrictions. High-end French and Italian fashion houses have been riding a wave of strong, post-pandemic demand for designer labels, with shoppers still eager to spend savings from lockdowns despite turbulent stock markets and rising prices. The euro’s slide versus the dollar, which is likely to boost earnings for luxury companies producing in Europe, is encouraging visiting Americans to spend more. “American consumers are travelling to Europe like there’s no tomorrow,” said Mario Ortelli of luxury mergers-and-acquisitions advisory firm Ortelli & Co, predicting they will boost the sector’s sales on the continent. Investors will be looking out for signs of waning appetite for designer brands as well as plans by the luxury goods companies for further price increases, which are aimed at protecting margins.


Office & Leisure

Game on for Hasbro as new toys to soften inflation hit

Hasbro Inc’s higher-priced toys powered its quarterly profit jump, defying an inflation-driven demand slump gripping American retail and sending its shares 2% higher on Tuesday. The company is leaning on product launches including new Nerf blasters and expansion packs for its “Magic: The Gathering” role-playing game at a time when fears of a slowdown have gained ground among toymakers. Walmart Inc and Target Corp – which together account more for than a third of Hasbro’ sales, according to UBS – have in recent months warned of the toll rising prices were taking on shoppers. Still, the company is yet to see any push back from consumers over price hikes and could raise rates further if costs increase, Chief Executive Officer Chris Cocks told Reuters. “Toys tend to be resilient in a recession,” Cocks said. “Parents want to keep investing in their children, and toys and games are good entertainment value for the money.” For the second quarter, Hasbro posted an adjusted profit of $1.15 per share, beating analysts’ estimates of 94 cents, according to Refinitiv data. Despite the strong sales, Hasbro’s inventories swelled by more than 73% as it expedited shipments to avoid the shortages it faced during last year’s holiday season.

Mattel Opens Its Vault to Revitalize Dormant Brands

Barbie is about to reunite with some old friends. Mattel, the maker of the popular fashion doll, is dusting off three dormant lines that have not been on toy shelves in decades: Major Matt Mason, Big Jim and Pulsar. The reappearance of three action heroes is part of a strategy hatched by Ynon Kreiz, Mattel’s chief executive, to capitalize on the company’s intellectual property by reviving old brands for new generations. Mattel will reintroduce the toy lines under an umbrella label called Back in Action this week at Comic-Con International, the pop-culture fan fest in San Diego. Mr. Kreiz’s strategy has helped Mattel turn around its sagging fortunes since he took over in 2018. The company reported a 19 percent jump in sales in 2021, to $5.5 billion, and despite supply chain bottlenecks and the rising costs of raw materials, it has forecast growth of 8 percent to 10 percent this year. Part of the toymaker’s recent success derives from the expansion of legacy brands. Barbie will feature in a live-action movie starring Margot Robbie, one of a dozen films in the works for various Mattel brands, including a live-action Hot Wheels movie produced by J.J. Abrams’s Bad Robot production company and one for Masters of the Universe, in partnership with Netflix.

FaZe Clan goes public in $725 million SPAC, a market bet on Gen Z and the creator economy

Digital entertainment and esports brand FaZe Clan began trading on the Nasdaq Wednesday after completing a SPAC merger in a deal valued at $725 million, a big step for creator economy companies to be publicly traded. FaZe Clan is an online media company made up of 93 members, consisting primarily of esports competitors and content creators, plus a handful of celebrities like Snoop Dogg. FaZe Clan’s social creators have a combined following of over 500 million across multiple platforms such as YouTube, TikTok and Twitch. FaZe Clan was also ranked the fourth-most-valuable esports company by Forbes. The company began trading on the Nasdaq under the ticker FAZE, and FAZE shares sank in their debut on Wednesday morning. Despite the current market conditions and the threat of new SPAC regulation, FaZe Clan CEO Lee Trink said he feels confident going public via a SPAC was the right decision for his company. FaZe Clan was founded in 2010 by a group that started posting gameplay videos on YouTube. The company then grew in membership and engagement, branching off into new vehicles such as esports where players take part in video game competitions.

Mattel inks deal with Elon Musk’s SpaceX to produce line of toys

Mattel inked a multiyear deal with Elon Musk’s SpaceX to create a line of toys inspired by the space venture, the companies announced Wednesday. Financial terms of deal were not disclosed. The El Segundo, California-based toy company expects to begin releasing the SpaceX product line in 2023. The partnership was announced ahead of the anniversary of when humans first landed on the moon’s surface in 1969. SpaceX has long sold merchandise through its own website, but those items have typically been limited to shirts, jackets and other accessories such as hats and bags. With Mattel’s help, SpaceX can delve into ventures such as plush, dolls or building sets with a veteran toy manufacturer. The collectors market has become a lucrative space for Mattel and other companies including Hasbro and Funko, so exclusive licensing deals for specific pop culture brands with notable fan bases has become increasingly important. This new partnership comes just months after Mattel sent two Barbie dolls into space as part of a collaboration with the International Space Station National Lab to encourage girls to consider aerospace, engineering and STEM careers.

H.I.G. Capital Completes Acquisition of Family Entertainment Group

H.I.G. Capital, a leading global alternative investment firm with $50 billion of equity capital under management, is pleased to announce that one of its affiliates has completed the acquisition of Family Entertainment Group Holdings, LLC. Founded in 2004 and headquartered in Itasca, Illinois, Family Entertainment Group is an industry leading designer, developer, and operator of amusement facilities. The Company provides turnkey outsourced facility management services of arcade operations on behalf of resorts, hotels, casinos, and amusement parks. Additionally, the Company owns and operates standalone family entertainment centers under the In The Game, Max Action, and Bonkers brands. Family Entertainment Group operates nearly 60 state-of-the-art locations throughout the U.S. H.I.G. is partnering with George Smith, Founder and Chief Executive Officer, as well as the current management team, to provide support and resources to take advantage of the Company’s significant strategic growth initiatives across a large and rapidly growing end market.

Technology & Internet

Amazon sues thousands of Facebook group administrators over fake reviews

Amazon on Tuesday filed a lawsuit against the administrators of more than 10,000 Facebook groups who allegedly acted as fake review brokers. The lawsuit filed in King County Superior Court in Seattle accuses the group admins of soliciting reviews for items in exchange for money or free products. One of the groups, “Amazon Product Review,” had more than 43,000 members, and allegedly offered refunds or other payment to buyers willing to leave bogus reviews on products like camera tripods and car stereos. Another group, called “Amazon Varified Buyer & Seller,” had more than 2,500 members, the complaint said. Administrators allegedly sought out fake reviews, and offered them to Amazon sellers, charging $10 per review, according to screenshots of Facebook messages included in the complaint. Facebook parent company Meta has taken down half of the more than 10,000 groups reported by Amazon, and continues to investigate others, Amazon said.


Google will once again test augmented reality glasses in public

Google will test augmented reality prototypes in public settings, the company said in a blog post on Tuesday. Some prototypes will look like normal glasses and will be equipped with microphones and cameras as well as transparent displays. The new glasses aren’t a product yet and aren’t available to the public, but Google wants to test apps like real-time translation or showing the user directions inside glasses lenses, especially in environments like busy intersections. The tests represent a significant advance in Google’s development of augmented reality, a technology that many in Silicon Valley believe could be a major shift in computing like the smartphone and PC before it. Augmented reality superimposes computer-generated images over the real world, unlike virtual reality, which completely immerses the viewer in an artificial world or “metaverse.”


Finance & Economy

Mortgage demand drops to a 22-year low as higher interest rates and inflation crush homebuyers

The pain in the mortgage market is only getting worse as higher interest rates and inflation hammer American consumers.  Mortgage demand fell more than 6% last week compared with the previous week, hitting the lowest level since 2000, according to the Mortgage Bankers Association’s seasonally adjusted index.  Applications for a mortgage to purchase a home dropped 7% for the week and were 19% lower than the same week in 2021. Buyers have been contending with high prices all year, but with rates almost double what they were in January, they’ve lost considerable purchasing power.

Jobless claims rise again in another sign that labor market is cooling

Initial jobless claims hit their highest level since mid-November last week, the latest sign that a historically tight labor market is beginning to slow, according to Labor Department data.  Claims totaled 251,000 for the week ended July 16, up 7,000 from the week before and above the 240,000 Dow Jones estimate.  The data comes with uncertainty running high about the direction of the economy.  Employment has been the primary bright spot, with nonfarm payroll gains averaging a robust 457,000 a month through the first half of the year. However, those increases have been slowing lately, with the last three months averaging 375,000.

West Coast ports reduce idling vessels as container supply increases

The queue of vessels waiting to unload goods at the Port of Los Angeles, North America’s busiest container port, has fallen 80% since the start of the year as global container prices continue to slide, pointing to more easing in supply chain disruptions.  The backlog of vessels waiting outside Los Angeles has fallen from a record high of 109 to 20 and the port moved 876,611 twenty-foot equivalent units (TEUs) in June in its best record in over 100 years.  At the height of supply chain crisis, these 100 odd vessels idled outside Los Angeles and Long Beach, waiting to unload. Before Covid-19, little wait time was needed for a berth. The pandemic also hurt domestic transportation as a result of trucker shortages due to Covid-19 infections.

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