The Big Story

How the Delta Variant Is Impacting the Consumer Sector

Paul Alexander

The rapid spread of the highly contagious COVID-19 Delta variant has grabbed national headlines and put a dent in people’s optimism that the pandemic will soon be over in the U.S. According to the New York Times, as of this morning, case counts in the U.S. are continuing to climb rapidly, with the seven-day rolling average of new cases reaching over 130 thousand, or the highest rate of infections since early February and roughly twice the level logged during last summer’s surge. While those numbers are concerning, there are multiple reasons to feel less despair this time around. First, nearly three quarters of all adults in the country have at least one dose of vaccine, over 60% are fully inoculated, the pace of vaccination has accelerated over the last month, and vaccines are expected to be approved for children as young as four years old this winter. While fully vaccinated people can contract and spread the Delta variant, the vaccines have proven very effective in preventing serious illness and death. Second, while case counts are moving in the wrong direction virtually everywhere in the U.S., the spike in infections is less severe in the Northeast, West, and Midwest, and cases are leveling off or dropping in some of the states that were first to report Delta variant outbreaks. Nevertheless, the current trajectory of the pandemic is worrisome, and is likely to have an impact on consumers and businesses over the near term, at least.

At the national level, most experts do not expect widespread business closures, but the Delta variant could still have an impact on confidence and consumer spending. A July survey from First Insight reported that 64% of consumers said they were “very or somewhat worried” about coronavirus – the highest level of concern since March 2020 – and more than half of those surveyed said they consequently expect to cut their spending. Other measures of consumer sentiment are also generally unfavorable. The Forbes Advisor-Ipsos Consumer Confidence Weekly Tracker has whipsawed up and down each week since late June, but the overall trend has been lower. Meanwhile, the University of Michigan consumer sentiment index’s preliminary August reading released on Friday dropped dramatically, to below its previous pandemic-low of April 2020.

At the sector level, consumers’ concerns about the Delta variant are unfortunately likely to hurt areas that have already been badly stung by the pandemic. An analysis from research firm InMarket found that national foot traffic in malls in the first week of August was just 53% of 2019 levels, a reversal from early July, when foot traffic was up 4% versus the same point in 2019. InMarket also reported that national foot traffic at quick service restaurants was down 25% versus 2019 in the first week of August. This was also a reversal from early July, when foot traffic was up 35% versus 2019.

The travel sector is also likely to be impacted as people postpone or cancel trips they might have taken if not for rising infection rates. Southwest Airlines reported last week that it is seeing a surge of cancellations and its rate of new bookings has slowed. On Tuesday of last week, the Transportation Security Administration (TSA) reported its lowest number of screened passengers in two months.

On the other hand, certain sectors of the economy that benefitted from shifting consumer behaviors in the pandemic may keep up their momentum if caseloads rise further or remain elevated, including ecommerce, home goods, grocery, delivery services, and products that support work and school from home.

Hopefully infection rates peak and decline soon, as happened in the U.K. and India, which both saw early outbreaks of the Delta variant. But in the meantime, this is a reminder that the developments of the pandemic aren’t linear. Over the coming weeks and months, consumers and businesses alike will be wise to be safe, prepared, and patient.

Headlines of the Week

Adidas to Sell Reebok to Authentic Brands for Up to $2.5 Billion

Adidas AG agreed to sell its underperforming Reebok business to Authentic Brands Group Inc. for up to 2.1 billion euros ($2.5 billion), adding another well-known name to the buyer’s growing lineup of apparel brands.  The majority of the share price will be paid in cash at closing, with the rest coming as deferred and contingent consideration, the companies said in a statement. The deal is expected to close in the first quarter of 2022.  The German sportswear giant formally began a divestiture of Reebok early this year after trying to revive the brand’s performance for more than a decade. Authentic Brands, which filed recently for an initial public offering in the U.S., has already acquired more than 30 brands, including bankrupt assets such as Barneys New York. Its portfolio companies include Brooks Brothers, Forever 21 and Sports Illustrated.


Consumer sentiment measure falls to pandemic-era low, sees one of largest drops on record

A key consumer sentiment reading saw a dramatic drop in early August as the delta variant of Covid-19 increased fears about the path of the economy, the University of Michigan said.  The Consumer Sentiment Index tumbled to 70.2 in its preliminary August reading. That is down more than 13% from July’s result of 81.2 and below the April 2020 mark of 71.8 that was lowest of the pandemic era.  A sudden drop of that magnitude is extremely rare for the index.  The dramatic decline comes as the delta variant of Covid-19 has spread rapidly across the United States, leading some states and cities to reinstate mask mandates and other health restrictions. Hospitals in many states in the southern part of the country are reporting a shortage of beds to handle patients.



Apparel & Footwear

Stitch Fix stylists jump ship

Last week, Stitch Fix set new requirements that, as of Aug. 15, stylists (all hourly staff employees who work from home) must commit to 20 hours each week and work only from 8 a.m. to 8 p.m. in their time zone. The company said the changes are designed to accommodate upcoming features like real-time, one-on-one “live styling,” which the company is testing and scaling, and to help meet its diversity hiring goals. In a previous emailed statement, the company noted that availability requirements are standard procedure for hourly workers and that the new rules will help manage operations and provide for a positive client experience.  But the changes are a deal-breaker for many stylists, who were drawn to the flexibility of the job because it allowed them to care for children, attend school or manage other jobs. Moreover, while the company once guaranteed a minimum 15-hour week, stylists say they now may be assigned as few as zero hours. They must submit their 20-hour weekly schedule two weeks in advance, but are given just days’ notice of how many hours they’ll actually work.

Canada Goose shares slump as it moves to DTC model

Canada Goose more than doubled its revenue against 2020, with revenue of $56.3 million Canadian dollars ($45 million U.S.) for the period June 27.  That figure includes direct-to-consumer revenue of $29.4 million, nearly tripled from last year, thanks in part to an 80.8% increase in e-commerce revenue. Revenue and profits beat Wall Street analysts, according to Seeking Alpha, but the company’s stock took a hit after it reported margins fell from 66.4% earlier in 2021 to 54.5% in the most recent period. On a conference call, CEO Dani Reiss said the company expects margins to return to historical levels for the fiscal year.  Canada Goose’s sales are still well short of 2019 levels, and its profits show there is still ground to make up. The company’s operating and net losses each expanded year over year, in part because sales remain constrained and also because of increased investment in marketing and other strategic initiatives.

How Cuyana Took On Fast Fashion and Became a Cult Favorite With a Two-Word Mission

If you want your company to be mission-driven yet scalable, every employee you hire and every action you take must be fully committed to the cause. It’s this all-or-nothing mentality that Shilpa Shah, co-founder of San Francisco-based sustainable retailer Cuyana, attributes to her brand’s success for the past 10 years, as the entire company has embraced Cuyana’s “fewer, better” ethos. The brand has gained a cult following, particularly for its classic leather tote. First introduced in 2012, it’s still the brand’s bestseller.  At Cuyana, production happens in small batches to prevent overproduction, and the brand encourages its customers to wear garments at least 50 times–when the global average is just seven times. The company doesn’t overlook its products either– every item has a two-year warranty policy to handle complimentary repairs for issues resulting in manufacturing defects. From a two-person DTC operation in 2011, the retailer now has seven stores across the country and 150 employees, and it just completed a $30 million private funding round in 2019.


Athletic & Sporting Goods

Sports merchandise company Fanatics now valued at $18 billion with new investors including hip-hop mogul Jay-Z

Sports merchandise company Fanatics secured a $325 million money raise to expand into new sectors within its parent umbrella. It’s now valued at $18 billion, sources told CNBC.  The Florida-based e-commerce firm plans to focus on revenue streams outside of merchandising. The division will be led by Fanatics Chairman Michael Rubin, who will serve as chief executive officer. Fanatics claims it will make $3.4 billion in revenue this year, according to The Wall Street Journal.  Fanatics is seeking new opportunities like sports gambling and this move explains why it has been hiring new executives.


StatusPRO Raises $5.2M in Seed Funding

StatusPRO, a Miami, FL-based sports technology and gaming company, raised $5.2m in seed funding.  The round was led by KB Partners and TitletownTech with participation from Greycroft, Verizon Ventures, Haslam Sports Group, 49ers Enterprises, SC Holdings and additional strategic investors.  The company intends to use the funds to accelerate the expansion of products aimed at reshaping how players and coaches prepare for games, while defining a new form of engagement between athletes and fans.  Its training platform uses real-time player data to power holographic experiences that give players the ability to simulate any practice or game scenario without the physical impact that comes with playing the game. Players are able to simulate virtual practice sessions while in different locations, to mitigate the effects of having less time on the field.

Cosmetics & Pharmacy

Butterfly Invests in MaryRuth Organics, a Premium Health Supplement Brand

Butterfly, a Los Angeles-based private equity firm specializing in the food sector, has reached an agreement to partner with MaryRuth Organics, LLC, a leading digitally native health and wellness brand operating in the premium vitamins, minerals, and supplements industry. MaryRuth’s is Butterfly’s latest investment within its “seed to fork” approach to investing in food across agriculture, aquaculture, food and beverage products, food distribution, and foodservice. MaryRuth’s Founder and CEO, MaryRuth Ghiyam, will retain a significant ownership position alongside Butterfly. MaryRuth’s, which is headquartered in Los Angeles, began as the passion project of MaryRuth Ghiyam, a certified health educator, nutritional consultant, and culinary chef. MaryRuth’s has rapidly scaled its online platform and recently launched into retail channels. Today, MaryRuth’s boasts a growing portfolio of products spanning across multiple categories, including multivitamins, probiotics, herbal and adaptogen supplements, skin and beauty, and more.


Creightons to Acquire Emma Hardie for £6.3 Million

Beauty manufacturer Creightons is to acquire a 100% stake in the Hardie beauty brand for £6.3MM as reported by Cosmetic Business. Founded in 2009 by holistic facialist Emma Hardie, the premium skincare brand is available across the UK, Europe, US, and Asia Pacific regions.  The business turned over £3.8MM for 30 June 2020, with profits before tax of around £46,000. Founded in 1954, Creightons, designs, creates, and manufactures a wide range of skincare, haircare, and well-being products in its manufacturing hub in Peterborough, UK. The business was listed on the London Stock Exchange in 1987.  The deal will further Creightons’ credibility in the premium skincare category.


Discounters & Department Stores

Hudson’s Bay to split its e-commerce, store operations

When it comes to the blurring of on and offline sales, HBC continues to buck the tide. After making similar moves at Saks Fifth Avenue and Saks Off 5th, the company on Thursday said that its Canadian Hudson’s Bay department store “will separate its store fleet and e-commerce business into two separate businesses, accelerating its digital-first transformation.” The online business will operate as “The Bay,” while the 86-store fleet will operate as “Hudson’s Bay.” The Bay is responsible for brand direction, marketing, buying, planning and technology for both businesses, however. Iain Nairn, Hudson’s Bay’s president since last year, will lead the e-commerce business as president and CEO. Wayne Drummond, Hudson’s Bay’s chief merchant, has been appointed president of the stores business, according to the press release.

Target unveils new private label pet food

Over a year in the making, Target will launch its latest private label in the pet category, this time focusing on cat and dog food. The new brand, dubbed Kindfull, arrives in stores and online on Sunday.  Kindfull will include more than 50 products ranging from wet and dry food to treats and toppers — over half of which are priced under $10, according to a press release Wednesday. The brand’s ingredients include poultry, pasture-raised beef and fish caught through sustainable means, per the release. To further support its sustainability initiative, Target Forward, the company also said over 40% of Kindfull’s products use recyclable packaging.

Dillard’s swings to profit in Q2 as women buy clothing and shoes

Department store Dillard’s on Thursday demonstrated its strength in a troubled segment with its second quarter report. Total retail sales (excluding its construction business) rose 72% year over year to $1.5 billion, with women’s apparel and shoes outperforming other categories; compared to 2019, retail sales rose 12%. The Southern retailer didn’t release store comps relative to pandemic-dominated 2020; comparable store retail sales compared to 2019 rose 14%. The company swung into the black, reaching net income of $185.7 million after an $8.6 million net loss in the period last year. Margins in the quarter expanded thanks to “stronger consumer demand and better inventory management leading to decreased markdowns,” per a company press release. Retail gross margin reached 41.7% of Q2 sales, compared to 31.1% last year; retail gross margin expanded by 1,299 basis points from 2019.

‘The Book’ is back as Neiman Marcus works to reintroduce itself post-bankruptcy

As it approaches the anniversary of its exit from bankruptcy, Neiman Marcus on Monday announced a fall marketing campaign, “Re-Introduce Yourself,” featuring nearly 100 brands in women’s, men’s, children’s, home and beauty, with more than “40 new luxury and emerging brands” in focus. The campaign debuts mid-month with print and digital advertising, native content, social media, and store visuals and events. Its autumn “The Book,” available last year only in digital form, returns Aug. 30 featuring Chloe’s Gabriella Hearst, and Virgil Abloh of Off-White and Louis Vuitton. Some images were shot on location in Art Omi’s sculpture park in upstate New York and on the Million Air runway in Dallas. A video directed by Anais Larocca and produced in partnership with The Mill features dancers choreographed by Amy Gardner, per a company press release.



Emerging Consumer Companies

Super Coffee raises $106 million

Kitu Life, maker of better-for-you coffee under the Super Coffee brand, raised $106 million in a Series C funding round, bringing its total valuation to over $500 million. The round was led by Durable Capital Partners, with participation from Boston Beer Co. CEO Dave Burwick, soon-departing Schnuck Markets COO and former Anheuser-Busch President Dave Peacock, LivWell Ventures, the family office of Nutrabolt Chief Executive Officer Doss Cunningham, and 7-Eleven Inc.’s venture arm. The company will use the funds to expand product distribution as well as increase brand-building efforts. It claims to have increased revenue 106% from $200 million to just over $400 million between Q4 of 2020 and Q2 of 2021.

Turo, the San Francisco-based car sharing company, files for an IPO

Turo, the eleven-year old, peer-to-peer car-sharing startup, has initiated the confidential process of filing for an initial public offering with the U.S. Securities Exchange Commission. Turo’s marketplace is analogous to Airbnb, letting car owners post an ad to rent out their vehicle on its app and website. Cars are available to rent in more than 5,500 cities across three countries. The company raised $250 million in a Series E in July 2019, which pushed the company’s valuation over one billion dollars. Turo followed that up with a $30 million extension round the following February, bringing its total funding to date to over $500 million.

TOP The Organic Project raises $2 million

TOP the organic project, a women-owned, organic period product startup, has extended its seed round to raise $2 million. The funding will enable TOP to capitalize on strategic expansion and partnerships, bolster marketing initiatives and grow their team. The round was led by Massachusetts-based Mass Mutual through the MM Catalyst Fund, The Impact Seat, Maine Angels and Dirigo Angel Fund. Since its founding in 2018, TOP has raised $3M and expanded into 1,500 retailers nationwide, including Sprouts, HEB, Fresh Thyme, Wegmans, Fresh Market, Erewhon and many more, leading to triple digit growth year over year. This week, TOP launched their best-selling First Period Gift Box with to address Target’s mom and teen shoppers. The company recently launched a partnership with Imperfect Foods to further deepen its connection to consumers seeking to live more sustainably.



Grocery & Restaurants

Kroger partners with Kitchen United for ghost kitchens in its grocery stores

Kroger, the nation’s largest supermarket chain, and ghost kitchen start-up Kitchen United are teaming up to prepare takeout and delivery food inside some of its grocery stores. The partnership marries Kitchen United’s goal of aggressive expansion with Kroger customers’ demand for more freshly prepared meals. Both companies saw a surge in demand during the pandemic but now face challenges as consumers return to restaurants. Industry experts are forecasting slowing delivery sales, which could dampen restaurants’ desire to partner with Kitchen United, while Kroger and its portfolio of brands could see consumers cut back on grocery spending. Ghost kitchens, which are also known as cloud, commissary or dark kitchens, allow restaurants to prepare food only for delivery, sometimes with multiple brands sharing a kitchen. The models is touted as being more efficient and lowering labor and rent costs for eateries. The pandemic’s delivery boom boosted investor and operator interest in ghost kitchens, but some experts have grown concerned about heightened competition and oversaturation.

Louisiana Fish Fry lands new owner

MidOcean Partners, a New York-based alternative asset manager specializing in middle-market private equity and alternative credit investments, has acquired Louisiana Fish Fry Products, Inc. from Peak Rock Capital. Founded in 1982, Louisiana Fish Fry makes a range of products, including spices and seasonings, seafood boils, breadings and batters, sauces and marinades, and rice mixes. The company’s products are sold in grocery and mass market retailers as well as foodservice outlets nationwide. An affiliate of Peak Rock acquired Louisiana Fish Fry in 2018 from the family of the founding shareholders. During Peak Rock’s ownership, Louisiana Fish Fry undertook a transition from family to institutional ownership, including a series of transformational growth and operational initiatives that have contributed to the company’s success. Additionally, Louisiana Fish Fry has invested in the development and scale of its organization, opening new distribution facilities and organically increasing its employee base by more than 75%, enabling the business to support increasing demand.

Tender Greens and Tocaya merge to form the new One Table Restaurant Brands

The Southern California-based restaurant chains Tender Greens and Tocaya are merging and forming a new parent company called One Table Restaurant Brands, or OTRB, the companies announced Tuesday. Leading the newly formed company will be veteran executives from both Tender Greens and Tocaya’s former parent The Madera Group, who will lead the operations of 45 locations in California and Arizona between the two fast-casual brands. Backing OTRB are investors from both concepts, including Alliance Consumer Growth and Union Square Hospitality Group — which took a significant minority stake in Tender Greens in 2015 — as well as legacy Tocaya investors Breakwater Management as well as Michael Meldman and Schuyler Joyner. Both Tender Greens and Tocaya are known for their chef-made menus and locally grown ingredients with a build-your-plate component.

Home & Road

Casper 2Q loss widens on increased revenue of $151.8M

Mattress brand Casper Sleep reported a net loss of $33.7 million for the second quarter ended June 30, a 39% change from the net loss of $24.2 million in the same quarter last year. The company’s gross profit increased 27.1% to $72.5 million in the quarter. Quarterly revenue for the company increased 37.7% to $151.8 million compared with $110.2 million reported in the same quarter last year. The company’s North America direct-to-consumer sales, including Casper’s 72 retail stores and e-commerce channel, climbed 31.3% to $99.5 million over sales for the same quarter last year. The company, which is making a push to expand its partner footprint with home furnishings retailers, reported North American revenue for the quarter of $52.2 million from its retail partners, a 78.9% increase from results in the same period last year.

Trademark Global acquires Bolton Furniture

Trademark Global, a growing provider of product brands servicing major online retailers, has acquired flat-pack case goods and occasional resource Bolton Furniture. Terms of the transaction were not disclosed. Trademark Global, a portfolio company of private-equity firm Bertram Capital, looks to the transaction to expand its home-goods business with Top 100 e-retailers such as Wayfair, Amazon and, brands with which Bolton already has an established presence. Over the past 20 years, founder Geoff Jackson had developed Morrisville, Vt.-based Bolton into an innovative online seller of ready-to-assemble, flat-pack, and small-parcel furniture. Bolton’s expansive portfolio of high value products are a natural complement to Trademark’s own growing furniture category. Bolton’s leadership will continue in their current roles and will be integral members of the broader Trademark executive team.

Purple swings to $2.6M profit in 2Q on increased sales

Direct-to-consumer mattress brand Purple Innovations reported net sales of $182.6 million for the second quarter of 2021, a 10.6% increase over net revenue of $165.1 million in the same quarter last year. The company said the increased sales were driven by higher demand for all product lines, particularly mattresses, and acknowledged that revenues were impacted by production issues during the quarter. The company’s wholesale revenue increased 233.2% and direct-to-consumer sales decreased 19.9%. Purple attributed the swing to a return to pre-COVID-19 shopping patterns by consumers. Net income for the second quarter ended June 30 was $2.6 million compared with a net loss of $97.1 million in the prior year period.

Ethan Allen rings up 105% fiscal Q4 sales growth

A 105% increase in retail segment orders helped drive Ethan Allen to fiscal 2021 fourth-quarter sales of $178.3 million, growth of 94.7% compared with the same prior-year period. The performance reflected an overall bounce-back in home furnishings retail, as this year’s fiscal fourth quarter was matched against a period last year when brick-and-mortar stores were shutting down due to the COVID-19 pandemic. For the three months ended June 30, the vertically integrated manufacturer and retailer recorded net income of $18.9 million. Ethan Allen lost $3.7 million in fiscal 2020’s fourth quarter. Diluted earnings per share of 71 cents narrowly beat estimates and improved from the prior-year period’s loss of 48 cents per share.

Furniture rental company Nickson raises $12M in Series A

Nickson, a rental company that furnishes apartments on demand, has just completed a $12 million Series A fundraising round. Founded by Harvard Business School graduate Cameron Johnson in 2017, Nickson is a tech-enabled, furniture-as-a-service company that allows its users to make their new spaces move-in ready in as little as three hours, for a flat monthly fee. “I realized that when you move into an apartment you call to hook up cable, electricity and gas and I thought you should be able to do the same thing with your furniture,” Johnson said. “The process is simple. Once someone rents an apartment they call and give us a week’s notice. Then they choose the apartment size and take a style quiz. When they arrive on move-in day, all the furniture has been assembled and arranged, and the apartment is ready to be lived in.” The company prices start at $199 a month for a studio apartment and go up to $599 a month for a three-bedroom place.

Jewelry & Luxury

Lionel a Marca Becomes New CEO of Breguet

Swatch Group–owned watch brand Breguet has appointed Lionel a Marca as its CEO. He succeeds Marc A. Hayek, who will still serve as the brand’s president. Marc is the son of Swatch chair Nayla Hayek. A Marca is a nearly 30-year veteran of the Swatch Group, having joined in 1992. He has held several roles at the company, including working for its ETA Manufacture Horlogère—the brand’s watch movement division—and as a consultant to different Swatch Group companies, particularly in the areas of quality control and new product lines. He has been with Breguet since 2019.

With New Funding, Chrono24 Becomes Billion-Dollar “Unicorn”

Chrono24, the Baden-Württemberg, Germany–based digital marketplace for new and pre-owned luxury watches, just announced it has secured investments worth $118 million, or €100 million, in its Series C funding round. This newest haul boosts Chrono24’s overall funding total to over $236 million and values the company at over $1 billion, making it the first digital watch marketplace to achieve a unicorn valuation, according to a spokesperson. The round was led by equity firm General Atlantic, with participation from Aglaé Ventures, the technology arm of the investment firm run by the family of LVMH chair Bernard Arnault. Existing investors Insight Partners and Sprints Capital, as well as members of the company’s management, also participated in the latest funding round.

Next Year Will See A Wedding Boom, Forecasters Predict

After the COVID-19 pandemic forced many couples to postpone or cancel their weddings in 2020 and 2021, forecasters are now predicting a “wedding boom” in 2022. The number of weddings is expected to hit 2.5 million next year, the highest number since 1984, according to the Wedding Report, a market research company that questioned 2,229 consumers and 283 businesses. That’s more than double the 1.2 million weddings that were held in 2020. It’s also a nice jump from 2021, which will likely see around 1.9 million weddings. It also tops the 2.1 million weddings held during the non-pandemic year of 2019. The number of weddings had been dropping from 2016 through 2019, possibly reflecting a shift in societal attitudes toward marriage.

Lab-Grown Diamond Awareness Is Strong, But Consumers Still Confused

Most consumers have heard of lab-grown diamonds. They know they exist. But many still aren’t quite sure what they are. That’s according to the latest chunk of research from the Plumb Club Industry and Market Insights 2021, which questioned 1,049 men and women, aged 25–60, in 10 key markets. The survey found that 79% of those polled said that they were aware of lab-grown diamonds and their use in fine jewelry. However, 41% admitted to not understanding how they differed from natural gems. That shows a greater need for consumer education, says Plumb Club executive director Lawrence Hess. “Retailers that are doing well with [lab-grown diamonds] take a neutral approach and educate the consumer on their choices without bias,” he says. “I believe the consumer will pick up on bias.” When asked to choose, 84% of consumers said they’d prefer to buy natural diamonds, while 16% said they would prefer a lab-grown.

Pandemic shatters M&A taboo for Italy’s luxury brands

The fashion world has been captivated by its own soap opera this summer as the biggest brands roar back from the pandemic: will legendary designer Giorgio Armani sell up? The 87-year-old Italian has long defended the independence of his company even as rival Italian brands such as Fendi and Gucci were swallowed by LVMH and Kering, the ambitious French groups that have grown to dominate the luxury sector. But in April, King Giorgio, as he is known, told Vogue that going it alone was “not so strictly necessary” and “one could think of a liaison with an important Italian company”. The invitation to potential bidders did not go unnoticed.


Office & Leisure

Hudson to Introduce New Retail Concept in Airports

Without question the state of travel is evolving in light of the coronavirus crisis, but the retailer Hudson is debuting its own evolution in airports. Hudson, a Dufry company, is introducing Evolve by Hudson, a concept shop format geared for its stores in airports. The retailer has more than 1,000 stores in airports, commuter hubs, tourist locations and other points of interest. The Evolve by Hudson debut is a shift by the company to larger, more integrated store concepts. Shoppers will find different brands in sunglasses, electronics and entertainment, personal care and wellness, luggage and writing instruments, accessories and apparel, local goods and souvenirs, and travel essentials and snacks. By broadening the number of brands that are available to shoppers, the travel retailer aims to make airport shopping more convenient and create new retail partnerships. The first Evolve by Hudson store will bow later this summer at Nashville International Airport. After that, seven additional locations are planned including Dallas Love Field Airport and Las Vegas McCarran International Airport.

Tech-driven Butternut Box eats its own dog food — raises $55.4M to scale-up

Butternut Box, a London-based fresh dog food business with a tech-driven platform that delivers HelloFresh-style, catered dogfood, has raised $55.4 million (€47.2 million) in a funding round led by L Catterton, the consumer-focused private equity firm, and included participation from White Star Capital, Five Seasons Ventures and Passion Capital. Founded in 2016, Butternut Box bills itself as a “human-grade, fresh dog food company” with a “personalized dietary offering” driven by its own tech platform. Jean-Philippe Barade, Partner, L Catterton Europe, and head of the firm’s London office, commented; “We have long been impressed by how Butternut Box has established itself as the trusted brand of choice in the UK among a loyal base of pet owners… Butternut Box continues to leverage its innovative digital platform to raise the bar in the growing pet food market.” Led by Goldman Sachs alumni Kevin Glynn and David Nolan, the company says its proprietary algorithm identifies how many calories each individual dog needs based on age, weight, breed, activity levels, and body condition and then pre-portions this amount into daily servings. However, Butternut Box is not alone, since they competing with Lily’s Kitchen, and Natural Instinct for this lucrative new market.

Party City to open 80 to 100 Halloween pop-ups; plots more store remodels

Party City is ready for one of its most important selling events — Halloween. The party goods retailer plans to open 80 or 100 seasonal Halloween stores this year, compared to only 25 in 2020, when celebrations were drastically scaled back due to the pandemic. By comparison, Party City had about 250 Halloween pop-ups in 2019. “We have new merchandising and store teams that had built over the last 18 months that … are executing well leading up to Halloween and excited to get going with this really fun and important season,” Party City CEO Brad Weston said on the chain’s second-quarter earnings call. “Our wholesale outlook relative to Halloween is stable, consistent, and it looks like everybody is sort of feeling the same as we’ll have to see what consumer participation is in Halloween,” he said.  Party City is also moving forward with its next-gen store remodeling program. It remodeled 16 stores in the second quarter, bringing its total to 57 to date. The prototype includes a more curated assortment, lower shelf heights, better signage and a shopping format that allows the store to carry roughly $100,000 less in inventory while still generating higher sales. The company’s retail operations include 831 specialty party supply stores (including franchise stores) throughout North America operating under the names Party City and Halloween City, and e-commerce websites.

Kainos Capital Acquires Muenster Milling, Family-Owned Pet Food and Ingredient Manufacturer

Kainos Capital, a private equity firm specializing in acquiring and managing food and consumer businesses, is pleased to announce that it has partnered with Mitch and Chad Felderhoff to acquire their family business, Muenster Milling (“Muenster”), a fourth-generation pet food and ingredient manufacturer based in Texas. Andrew Rosen, Managing Partner of Kainos, said, “We are excited to add Muenster to the Kainos portfolio of companies and to partner with owners Mitch and Chad to build a broader platform in the pet food and ingredient space. We plan to leverage the Kainos Operations Team to expand and further professionalize Muenster’s manufacturing capabilities.” Added Kevin Elliott, Partner of Kainos, “Through this proprietary transaction we are honored to be a part of the next phase of growth for this fast-growing and innovative pet food manufacturing and branded business.” Chad Felderhoff added, “It is very important to us that Kainos values and appreciates the culture that our family has built at Muenster Milling since 1932.”

Technology & Internet

Shutterfly acquires Spoonflower marketplace for $225 million

Shutterfly, a manufacturing platform for personalized products, has acquired Spoonflower, a global marketplace of home décor, custom fabric and wallpaper for approximately $225 million. The move doubles the total addressable market and positions Shutterfly to help close a gap in the creative economy by leveraging its vertically integrated production platform to deliver premium customized products for millions of makers, according to the company. “The move is beneficial both for Shutterfly’s 21 million users and Spoonflower’s more than 3.3 million unique artists,” said Dwayne Black, Shutterfly’s chief operating officer. “We have a world-class manufacturing platform that can create one-off personalized products, which is different than most other manufacturers. And, we know how to do this at scale.” Black said that countless custom- and customer-designed product options from Spoonflower will soon be available with the ability to customize those high-quality products in the Shutterfly catalog. Shutterfly pioneered online photo sharing more than 20 years ago and has enabled millions of people around the world to create a wide range of personalized products. Spoonflower was founded more than 10 years ago to fill a market need for print-on-demand fabric and has grown the product offering to include home decor items in a global design marketplace.


Start-ups bring in billions, give away Teslas, to buy Amazon sellers

Amazon aggregators are in the midst of a buying frenzy. Following the success of Thrasio and others, the number of aggregators has grown rapidly in the past few months. There are now at least 69 Amazon aggregators based in at least 12 countries, and they’ve raised more than $7 billion collectively since April 2020, according to Marketplace Pulse. Aggregators give venture capitalists a foothold in the mom-and-pop world of Amazon sellers, which until now has largely been dominated by individual entrepreneurs and brands. Usually the aggregator buys out the seller and then tries to boost sales with large-scale marketing and software solutions. Amazon acknowledges that a new trend is underway, but the company still sees a prominent role for the entrepreneur. “We expect the majority of sellers and brands will remain independent and continue to use our store for its scale and reach,” an Amazon spokesperson told CNBC in a statement.


Amazon opens $1.5 billion Kentucky air hub in bid to speed deliveries

Amazon on Wednesday opened its $1.5 billion air hub in northern Kentucky, which will help accelerate its push for faster delivery and greater control over its logistics network. It’s a major milestone for Amazon Air, the company’s burgeoning air cargo arm, which launched in 2016, whose routes are flown by several contracted carriers. Across the company’s sprawling network of warehouses, trucks and delivery vans, planes remain a critical piece of the puzzle in ensuring packages can be handed off quickly to customers’ doorsteps. Amazon Air operates out of more than 40 airports across the U.S., but the terminal at CVG will serve as the central nerve of its nationwide cargo network, allowing it to supercharge its one- and, increasingly, same-day delivery capabilities in more areas of the country. Amazon has also expanded its aviation logistics unit beyond the U.S., opening a 20,000-square-meter regional air hub at Leipzig/Halle airport in Germany last November.


Finance & Economy

Majority of consumers feeling supply chain disruptions

Approximately 60% of Americans surveyed by Gallup say they have struggled to get products due to shortages, while roughly 57% have experienced significant delays in receiving a product they ordered.  Overall, the poll found that seven in 10 Americans have had at least one of these issues, while 46% have had both. Additionally, about 83% of U.S. adults surveyed have reported noticing “significant price increases” in the past two months.  The shipment delays and shortages have become a byproduct of COVID-19-related economic disruptions to manufacturing, shipping and labor supply that are expected to continue as the delta variant spreads.

Inflation is spreading to more parts of the US economy

America’s soaring price hikes moderated last month, signaling that inflation may have peaked. But investors should pay heed to another trend: the spread of higher prices across more sectors of the economy.  What’s happening: Consumer price inflation remained elevated in July, according to the Bureau of Labor Statistics. Prices rose 5.4% from a year earlier, flat compared with June when the index hit a 13-year high.  On a monthly basis, however, prices rose 0.5% in July, a major slowdown from 0.9% growth in June and the weakest pace since February.  But drill down into the data. While some of the major drivers of previous spikes, such as used car prices, eased last month, the cost of other goods, including medical care, housing and food in grocery stores and at restaurants, climbed.

With college kids returning to campus, back-to-dorm spending on track to make bigger—but later—splash

For many college students, the pandemic has meant long days stuck in front of a computer or a deferred year away from school. This fall, a wave of young people will move into college dorms and campus apartments — or return after a year off — and will need the extra long sheets, shower totes, bulletin boards and other decor to match.  Yet some are putting off purchases, as they juggle a full summer schedule and weigh pandemic-related uncertainty.  College students and their families expect to spend an average of $1,200.32 — up about 13% from a year ago, according to the National Retail Federation’s annual back-to-school spending survey. Prosper Insights & Analytics polled 7,704 consumers from July 1-8 for the survey. In total, college spending is expected to total $71 billion, up from $67.7 billion last year, according to the survey.