In April 2020, Daphne Howland of Retail Dive wrote “Few retailers will come out of this unprecedented moment unscathed, but department stores are at a point of no return. None can go back to business as usual. Some may not come back at all.”
What a difference a year makes.
Now, in the face of Delta-variant-driven manufacturing plant closures and a global logistics crisis, the nation’s largest department store chains are managing inventory tightly and avoiding their long-time Achilles heel, promotional discounting, to deliver unexpectedly strong financial performance.
Last week, Macy’s reported second quarter revenue of $5.65 billion, nearly $650 million greater than Wall Street analysts expected. The positive surprise flowed through to the bottom line as adjusted earnings per share reached $1.29, significantly better than the 19 cents analysts predicted. Importantly, CEO Jeff Gennette noted that Macy’s greeted 5 million new customers in Q2, 41% of them originating through the digital channels.
Kohl’s also reported strong results with net sales of $4.22 billion, an increase of over 30% from the prior year. Most impressively, gross margins increased nearly 10 points from 33.1% a year ago to 42.5%. The Company reported that gross margins improve nearly 500 basis points over the same period in pre-pandemic 2019 while operating expenses were lower than 2019 levels. This confluence of good news delivered the retailer a ten-year high operating margin of 12.8% and yielded approximately $1.25 billion of free cash flow for the quarter.
Nordstrom announces its second quarter results tomorrow. All signals from Nordstrom suggest they, too, will report very strong results. Market analysts expect Nordstrom to post strong gains associated with its digital channel due to years of savvy investment in technology.
Nordstrom has also long been credited with innovative brand partnerships and showcases in its stores, a strategy that its rivals have also implemented in recent periods. Kohl’s, for example, has begun the rollout of its partnership with beauty powerhouse, Sephora, and has also recently added Tommy Hilfiger and Eddie Bauer, two brands heretofore considered too high-end for the retailer. CEO Michelle Gass also hinted at “several transformational partnerships” coming to Kohl’s that she believes will yield “sustainable growth for years to come”. Not to be outdone, Macy’s announced on Thursday of last week a partnership with WHP Global to bring Toys ‘R Us to 400 Macy’s stores by next year, giving Macy’s a powerful tool to attract millennial parents.
Perhaps the most interesting news for fans of the department store concept came last Thursday as a trio of Wall Street Journal reporters noted that Amazon.com – the entity most typically blamed for the demise of the department store – plans to “open several large physical retail locations in the U.S. that will operate akin to department stores, a step to help the tech company extend its reach in sales of clothing, household items, electronics and other areas . . .” The first of these stores will reportedly be in Ohio and California. The report states that Amazon intends for these stores to be 30,000 square feet, much smaller than traditional department stores, but larger than the online giant’s other non-grocery concepts.
To paraphrase Mark Twain, perhaps reports of the demise of the department store have been greatly exaggerated.
Headline of the Week
Hyatt is expanding its reach in luxury resorts, betting that pent-up demand following the pandemic will boost demand for upmarket leisure travel. The US hotel group said in a statement that it has agreed to buy luxury resorts operator Apple Leisure Group from private equity firms KKR and KSL Capital Partners for $2.7 billion. The acquisition will double Hyatt (H)’s global resorts footprint and make it the largest operator of luxury hotels in Mexico and the Caribbean. It will also extend its presence into 11 new markets in Europe, “a critical region for global growth in leisure travel,” Hyatt (H) said. The deal is the latest move by an international hotel chain to expand in luxury travel, which is leading the industry’s recovery following the coronavirus pandemic, according to travel research company Skift.
Apparel & Footwear
For American women, shopping for a stylish outfit in size 16 or above can be a hassle. It can entail walking to a tiny corner tucked in the back of a store, or directing a web browser to a pint-sized section of a retailer’s website, where the models displayed may or may not be plus-sized. Or, it could involve shopping from brands entirely different from where a woman’s thinner friends shop. Although more women than ever are searching for extended sizes, the choices can be frustratingly limited. Old Navy is looking to seize this opportunity. And part of the retailer’s strategy will involve breaking down some of the barriers that have existed for years. Old Navy will soon offer sizes 0-28 and XS-4X for all of its women’s styles in its stores, and up to size 30 online. Across its 1,200 stores, Old Navy will also rearrange merchandise so that customers in search of extended sizes won’t be directed to a separate area to browse, which has been the case since Old Navy debuted dedicated plus-size shops in 75 stores in 2018.
Frank and Oak’s new owners have begun to put their mark on the brand, starting with the opening of its first U.S. store in Manhattan’s SoHo. Last October, Unified Commerce Group, a new retail acquisition and advisory group created by Dustin Jones and Greg Freihofner, purchased the Montreal-based lifestyle brand following a bankruptcy filing. Now, after spending a few months stabilizing the business and setting priorities, UCG is ready to “hit the gas,” said Jones. The first evidence of that acceleration is a 1,600-square-foot store at 252 Lafayette Street that opened quietly over the weekend. At the same time, Nordstrom is adding the Frank and Oak collection of men’s and women’s wear to seven stores on Sept. 1, and Jones hopes to further expand the brand’s footprint with the department store for spring. Before filing bankruptcy last June, Frank and Oak had operated 22 stores, Jones said, but that number was trimmed to 11 after the purchase. He said the stores UCG decided to retain were all in Canada.
Altar’d State is upping its game in women’s mid-size and plus-size fashions. The young women’s apparel retailer has changed the name of its A’Beautiful Soul brand, which offers sizes 10 to 24, to Arula. The new name means “shining as the sun, brilliant and filled with grace.” The ethos of Arula is “Inspired by Beauty,” the company said. There are currently 17 Arula storefronts attached to Altar’d State stores. As a brand, Arula said it aspires to help its customers leave the store feeling better than when they walked in. The company described its customer as a 25 to 35-year-old female who wants to be seen for her beauty, has a passion for giving back and has a love of fashion. Altar’d State plans to grow the Arula brand and to expand it into new markets. The retailer plans to debut a standalone Arula store in October, with more locations to follow.
The sustainable shoe brand Allbirds is debuting a collection of activewear, making it the latest entrant into a hotly competitive category. With Allbirds, reducing carbon emissions and being environmentally friendly is a top priority. The retailer has avoided using polyester, which it says makes up 55% of all clothing and spews 700 million tons of carbon into the atmosphere each year. Instead, Allbirds has created the running clothes with eucalyptus tree fiber and merino wool — two materials that go into its iconic slip-on sneakers. Allbirds said it has worked on the collection for more than two years, with over 70 iterations. Allbirds has committed to slashing its per-product carbon footprint in half by 2025.
People around the world have swapped their jeans and khakis for comfy leggings and joggers—but activewear, which is largely made from petroleum-based materials like nylon and polyester, damages the planet. It does not biodegrade, but rather breaks into tiny fragments that end up in oceans and the food chain. And the process of extracting oil and manufacturing these fibers spews greenhouse gases into the atmosphere, fueling climate change. As the world confronts global warming, Lululemon is working to find more sustainable materials for its products. The $4.4 billion giant announced that it has made an undisclosed investment in the bioengineering company Genomatica to produce nylon that is made from plants rather than petroleum. Lululemon says that this bio-based nylon can easily be plugged into its supply chain, so the brand can start using it immediately with the goal of switching entirely to renewable or recycled nylon over the next nine years.
Athletic & Sporting Goods
WHP Global has acquired the global trademarks for the iconic Italian sports brand Lotto. The company said in a statement that Lotto Sport Italia S.p.A. (LSI) and its current leadership team, including CEO Andrea Tomat, will continue to operate the Lotto brand in the core markets of Italy, Europe, the Middle East, and Africa. The company added that together, LSI and WHP will provide design, product development, marketing, and brand management services to Lotto’s existing network of over 50 global partners across the world who generate more than 400 million dollars in annual retail sales. The Italian sports brand established in 1973, Lotto is known for its innovative performance-driven footwear, apparel and accessories, which feature the signature double diamond logo. Lotto has been worn by professional soccer teams A.C. Milan and Juventus F.C., soccer players Dino Zoff, Ruud Gullit and Andriy Shevchenko, and top athletes including tennis Grand Slam champions Martina Navratilova, Francesca Schiavone, Marion Bartoli and Boris Becker.
A deal to take the Topps Co. public has been scrapped after Major League Baseball said it won’t renew its exclusive, 70-year-old relationship with the trading-card company. A day after MLB announced its surprise decision to jilt Topps in favor of sports merchandising giant Fanatics — hedge fund Mudrick Capital said in a statement its deal to merge Topps with a “blank check” company to take it public “has been terminated by mutual agreement.” Mudrick’s so-called special-purpose acquisition company, or SPAC, was expected to close its merger with Topps on Aug. 27 and to begin trading on the Nasdaq Aug. 30. People close to Topps say the company was only informed Thursday afternoon that MLB would end the deal that has been in place since 1952. The deal — which had been announced in April at the height of the NFT craze — was valued at $1.3 billion. At the time, Topps said it planned to capitalize on demand for non-fungible tokens by selling baseball-related digital assets.
Cosmetics & Pharmacy
The Estée Lauder Companies Inc. reported net sales of $16.22 billion for its fiscal year ended June 30, 2021, an increase of 13% from $14.29 billion in the prior-year period. Net sales grew in every region and in most product categories, reflecting the gradual reopening and recovery in brick-and-mortar retail stores in certain markets compared to the prior year when retail locations closed in most markets during the second half of the year as Covid-19 spread globally. Incremental net sales from the Company’s acquisition of Have&Be Co. Ltd. and the increase in its ownership of Deciem Beauty Group contributed 2 percentage points of growth to reported net sales. Also, for the three months ended June 30, 2021, the company reported net sales of $3.94 billion, a 62% increase compared with $2.43 billion in the prior-year period.
Il Makiage announced the acquisition of Voyage81, which owns patented technology that enables hyperspectral imaging capabilities on smartphones, allowing users to see in the ultraviolet and infrared wavelengths. The technology can be utilised in the beauty industry to perform various types of analysis on skin and hair. The acquisition of Voyage81, which recently completed its first funding round, is the second technology company the brand L Catterton-backed beauty brand has purchased. In November 2019, it acquired AI and data science startup NeoWize.
Brazilian cosmetics company Natura & Co, owner of Avon and The Body Shop, reported on Thursday a second-quarter profit of 235 million reais ($44.7 million), reversing a loss from a year earlier, thanks to e-commerce and integration with Avon. Recurring earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 3.4 percent to 630 million reais. Despite the pandemic’s impact on the global beauty and personal care sector, the company reported that its four brands — The Body Shop, Avon, Aesop and Natura — posted higher sales. CEO Roberto Marques said in a statement that Natura is on track to meet its 2023 goals.
Discounters & Department Stores
Walmart is chartering ships to ensure it has enough freight capacity to meet demand for peak season, executives said on the company’s earnings call Tuesday. The decision came amid a lack of capacity in the ocean shipping market. The retailer’s out-of-stock levels are higher than normal due to high sales levels and supply chain constraints, Chief Financial Officer Brett Biggs said, without outlining what normal levels look like for the retailer. Walmart’s suppliers are also adding longer lead times to their orders to help Walmart to better plan its inventory, Biggs said. “We’ve chartered vessels … we’ve secured capacity for the third and fourth quarter and feel good about the inventory positioning particularly compared to last year with inventory up 20% across the segments,” John Furner, CEO of Walmart U.S., said on the company’s earnings call.
Target reported sales growth throughout its business including an 8.9% increase in comparable sale on top of last year’s best-ever growth. Thanks to shoppers crowding stores while still embracing digital channels, Target’s comp sales growth was entirely fueled by traffic, the retailer said Wednesday. Store comp sales rose 8.7% and digital comp sales, which shot up by 195% last year, rose 10%. As sales and profits grew, Target bought back $1.5 billion worth of its own shares in Q2 after suspending stock repurchases for most of 2020 because of pandemic uncertainty. The retailer announced Wednesday a new $15 billion stock buyback program approved by its board that is set to begin after Target’s current $5 billion repurchase program is complete.
Walmart grew its sales across much of its business in the second quarter against a difficult-to-compare performance in 2020. Walmart’s U.S. sales rose 5.3% year over year to $98.2 billion, with comparable sales up 5.2% and transactions up 6.1%. Comps at Sam’s Club were up 7.7%, and Sam’s e-commerce sales were up 27%. E-commerce sales grew 6% against the same period in 2020, a quarter in which the retailer’s digital sales nearly doubled due to pandemic-driven online shopping and consumer stockpiling. For the year, Walmart is on pace to reach $75 billion in e-commerce sales worldwide, it said.
Shares of Kohl’s surged nearly 8% on Thursday after the company reported fiscal second-quarter earnings that beat expectations and raised its forecast for the year, as shoppers headed back to its stores. “Based on our results, we are raising our full year 2021 guidance, which positions us to achieve many of our 2023 strategic goals this year, well ahead of our plan,” CEO Michelle Gass said in a press release. This is the second time the retailer has raised its guidance this year.
Emerging Consumer Companies
Fitness platform Ultrahuman has officially announced a $17.5 million Series B fundraise, with investment coming from early-stage fund Alpha Wave Incubation, Steadview Capital, Nexus Venture Partners, Blume Ventures and Utsav Somani’s iSeed fund. A number of founders and angel investors also participated in the Bangalore-headquartered startup’s Series B, including Tiger Global’s Scott Schleifer, Deepinder Goyal (CEO of Zomato), Kunal Shah (CEO of Cred), and Gaurav Munjal and Romain Saini (the CEO and co-founders of unacademy), among others. The latest tranche of funding brings its total raised to date to $25 million. While the subscription platform has been around since 2019, offering a fairly familiar blend of home workout videos, mindfulness content, sleep sessions and heart rate tracking (integrating with third-party wearables like the Apple Watch), its latest fitness tool looks rather more novel — as it’s designed for monitoring metabolic activity by tracking the user’s glucose levels (aka, blood sugar).
PatPat, an online children’s brand known for its baby and matching family outfits, raised $160 million from SoftBank Vision Fund 2. The round is a Series D2 and brings the company’s total funding to $700 million. It comes weeks after closing a Series D round led by DST Global, which saw $510 million raised. PatPat has offices in Silicon Valley and a number of cities in China. Earlier investors include Tiger Global, Sequoia Capital China, and GGV Capital.
Starday, a New York-based healthy and sustainable food products company, raised $4 million in seed funding to take on “big food” incumbents. The round was co-led by Equal Ventures and Slow Ventures, with participation from Haystack, Great Oaks Venture Capital, XFactor Ventures, and ABV. Starday’s technology turns data into products based on current trends and customer preferences. Its first brand is Gooey Snacks, an all-natural, low-sugar chocolate hazelnut spread that is made without dairy or palm oil. The company expects to develop four or five brands in the next twelve months, including one more later this year.
Grocery & Restaurants
The Wendy’s Co. and REEF Technology have agreed to a deal that calls for 700 delivery kitchens over the next five years in the United States, Canada and the United Kingdom, the companies said Wednesday. Dublin, Ohio-based Wendy’s said it expects the agreement with Miami-based REEF to produce about 50 delivery kitchens this year and the remainder through 2025. The commitment builds on the test of eight REEF delivery kitchens in Toronto late last year with Wendy’s Restaurants of Canada. The deal also will make REEF the first Wendy’s franchisee in the United Kingdom. The agreement led Todd Penegor, Wendy’s CEO and president, to say the company was increasing its 2025 global target to 8,500 to 9,000 restaurants, or a 500- to 1,000-unit increase from previous goals. The company currently has more than 6,800 restaurants worldwide. Penegor said Wendy’s expects the delivery kitchens to produce sales in the range of $500,000 to $1 million per unit. The royalty rate will be higher, he said, with about 6% in the United States and 5.5% in the United Kingdom.
A joint venture between Continental Grain Co. and Cargill has an agreement in place to acquire poultry processor Sanderson Farms, Inc. for $4.5 billion. The plan is to merge Sanderson Farms with Wayne Farms, a subsidiary of Continental Grain. The transaction is expected to close by the end of 2021 or in early 2022, and Clint Rivers, the chief executive officer of Wayne Farms, will lead the combined companies. Sanderson Farms had sales of $3.56 billion in fiscal 2020. The company has 13 processing plants, the capacity to process 1.3 million birds per week and employs approximately 17,000. Based in Oakwood, Ga., Wayne Farms had sales of $2.2 billion in 2020, has 11 plants and employs approximately 9,000. Cargill said it will support the new joint venture with its relationships with retail and foodservice customers. The acquisition will be a cash transaction in which shareholders of Sanderson Farms will receive $203 per share.
Home & Road
The Home Depot second-quarter profits and sales topped estimates even as fewer people shopped its stores. Net income rose to $4.81 billion, or $4.53 per share, for the quarter ended Aug. 1, from $4.33 billion, or $4.02 per share, in the year-ago period. Analysts had been expecting $4.44 per share. Revenue rose 8.1% to $41.12 billion, beating expectations for $40.79 billion. It was the first time in the home improvement retailer’s history that quarterly sales surpassed $40 billion. Comparable sales rose 4.5%, missing estimates. Comp U.S. sales were up 3.4%, the smallest increase in two years.
Lowe’s Cos. reported a better-than-expected quarter, helped by a big uptick in sales from its home professional customer (“Pro”) base. In April, Lowe’s announced it was rolling out an in-store shopping experience created specifically for its Pro customer. The initiative, which includes a wide array of new offerings, starting with a dedicated area, called The Pro Zone, appears to be paying off, with the home improvement retailer posting 21% second-quarter growth in its Pro business. Net income rose to $3.02 billion, or $4.25 a share, in the quarter ended July 30, from $2.83 billion, or $3.74 a share, in the year-ago period. Analysts had forecast earnings per share of $4.01.
La-Z-Boy reported fiscal 2022 first-quarter consolidated sales of $525 million, an all-time quarterly record and an 84% increase compared with the same prior year period, when plants had reopened at reduced capacity and most retailers were closed for a portion of the quarter. Sales for the three months ended July 24 also stacked up well relative to the pre-pandemic fiscal 2020 first quarter, up 27%, for a compounded annual growth rate of 13%. Fiscal first quarter written same-store sales across the entire La-Z-Boy retail network increased 10.4% compared with fiscal 2021’s first quarter and rose 28.6% relative to the pre-pandemic first quarter in fiscal 2020. Fiscal 2022 first-quarter net income of $24.6 million, or 54 cents per diluted share more than quintupled compared with the prior-year period’s $4.8 million, or 10 cents per share.
Furniture store sales dipped again in July according to according to the Department of Commerce’s advance monthly report on retail sales, but the category performed better than the overall retail picture. Based on advance estimates released Aug. 17, furniture and home furnishings sales totaled $11.947 billion in July, which was down 0.6% from June’s revised $12.286 billion in sales. It was the second consecutive month with a sales decline. Despite the drop, these figures represent a 15.6% increase compared with July 2020. The three-month period from May to July, while 0.5% less than February through April, was 30.5% higher than the same three months a year ago. Overall, retail dipped 1.1% from $624.73 billion in June to $617.72 billion in July. However, the retail snapshot is 15.8% higher compared with July 2020.
Jewelry & Luxury
Lucy Platforms has introduced the Diamond Price List (DPL), which the company touts as a “transparent and objective” report of diamond asking prices, calculated using artificial intelligence, machine learning, and data science algorithms. The DPL covers both rounds and fancies and will be issued four times a year. The decision to put the list out quarterly rather than weekly—as has become standard—was based on “feedback from major players who wanted to bring about stability,” says Lucy vice president of sales and marketing Miguel Martinez.
Zales has announced an exclusive deal with Serena Williams Jewelry, the line from the 23-time Grand Slam winner and entrepreneur. Zales will be the sole retailer for Williams, whose goal is to create designs that represent her style and also inspire self-love, strength, and resilience. Pieces will include existing fan favorites as well as new designs. Her collection will be available in Zales stores and on Zales.com on Aug. 24. The partnership works well for Williams and Zales, as both have long-held commitments to responsibly sourced fine jewelry.
Continuing the industry’s current strong run, jewelry sales in July 2021 jumped 83% over sales in July 2020—when the COVID-19 pandemic was at its height—and an impressive 54% over non-pandemic-affected July 2019, according to new data released by Mastercard SpendingPulse. SpendingPulse is the credit card company’s ongoing data service that measures in-store and online retail sales across all forms of payment, including cash and checks. Overall retail sales in July 2021, excluding auto and gas, rose 10.9% over the previous year, fueled in part by pent-up savings and the child tax credit that was part of President Biden’s American Rescue Plan. The role played by the child tax credit was demonstrated in an uptick in apparel and department store sales following its first distribution on July 15, SpendingPulse said.
Beijing’s crackdown on business that doesn’t support its policy goals suddenly looks like it might extend to luxury brands. Investors are only just waking up to the risks. On Tuesday, Chinese President Xi Jinping gave a speech about growing wealth inequality and the “promotion of common prosperity.” Luxury investors, who didn’t react to intervention in the Chinese tech and private-education sectors in recent weeks, are belatedly concerned that the country’s super rich could be reined in. A selloff that started on Wednesday and gathered pace on Thursday has wiped 60 billion euros, equivalent to $70.26 billion, from the market value of Europe’s big four names, LVMH Moët Hennessy Louis Vuitton , Kering, Hermès and Richemont. A wealth-redistribution push in China is potentially bad news for the luxury industry. A small group of very wealthy individuals—numbering only 10,000, according to Jefferies estimates—generates around a quarter of all luxury sales to the Chinese, who are now the industry’s most important shoppers by nationality. The risk of higher taxes and party disapproval may curb these big spenders.
Office & Leisure
The biggest trade publishers continue to get larger: Hachette Book Group has entered into a “binding commitment” to acquire one of the industry’s largest and most unique independent publishers, Workman Publishing. HBG, backed by its parent company, Lagardère, is paying $240 million for Workman, which had sales of $134 million last year. The deal is expected to be completed by the end of September. In making the announcement, HBG CEO Michael Pietsch called Workman “a brilliant publisher, the most creative in the industry,” that pioneered the method of combining images and information in a distinct way. That approach has led to such hugely successful franchises as the What to Expect and Brain Quest series as well as Page-a-Day calendars. When the acquisition is completed, Workman Publishing will become HBG’s eighth publishing group, comprising the imprints Workman, Algonquin, Algonquin Young Readers, Artisan, Storey Publishing, and Timber Press.
National Veterinary Associates, a global community of nearly 1,200 veterinary hospitals, has acquired Ethos Veterinary Health, a veterinary organization. NVA is backed by JAB Investors. “We are excited to welcome Ethos to the NVA family,” said Greg Hartmann, CEO of NVA. “Ethos’ passion and commitment to transforming medicine through a diverse offering of clinical research and education programs create a compelling growth opportunity for our community.” “Today marks an incredibly exciting milestone for Ethos Veterinary Health as we join the NVA family to combine knowledge and resources to better serve our clients, partners, and local communities,” said G. Ames Prentiss, CEO of Ethos. “With a science-driven focus and shared passion for providing patients with unsurpassed veterinary healthcare, our two organizations uniquely complement one another. We look forward to working with NVA to continue advancing animal health as we execute on our multi-faceted growth strategy in the years to come.”
Roblox is using M&A to bulk up its social infrastructure, announcing last week that they had acquired the team at Guilded that has been building a chat platform for competitive gamers. The service competes with gaming chat giant Discord, with the team’s founders telling TechCrunch in the past that as Discord’s ambitions had grown beyond the gaming world, its core product was meeting fewer competitive gaming needs. Like Discord, users can have text and voice conversations on the Guilded platform, but Guilded also allowed users to organize communities around events and calendars, with plenty of specific functionality designed around ensuring that tournaments happened seamlessly. Guilded had raised $10.2 million in venture capital funding to date according to Crunchbase, including a $7 million Series A led by Matrix Partners early last year. The company launched out of Y Combinator in mid-2017.
Kinderhook Industries, LLC, recently announced the acquisition of Fairfield, California based Primal Pet Foods. With this acquisition, Kinderhook will bring together portfolio companies Primal Pet Foods and Prairie Dog Pet Products, a premium specialty manufacturer and marketer of freeze-dried, smoked and natural dog treats. This combination together with the Himalayan and Holistic Hound brands creates the newly formed Primal Pet Group (PPG). The new Primal Pet Group creates a world-class manufacturer of minimally processed diets, treats and supplements. The PPG manufacturing presence spans across multiple facilities in California, Washington, Colorado and Texas. The formation of PPG will enable expanded output across manufactured product lines while increasing food safety and innovation.
Technology & Internet
Amazon on Friday stepped up its offensive against antitrust proposals in Congress by launching a website to communicate with sellers about the legislation. The website allows sellers to sign up to receive more information from Amazon’s public policy team about the package of antitrust legislation, approved in June by the House Judiciary Committee, which seeks to rein in Big Tech’s power. By signing up, sellers will also be given opportunities to communicate directly with elected officials about the bills, the website states. “We look forward to keeping you informed as we get more information about what this legislation could mean for you and providing you the opportunity to have your voice heard,” according to the website. “We will also share ways we can work together to ensure Amazon remains a great place for our seller community.” One of the most sweeping reform bills, the Ending Platform Monopolies Act, could directly affect Amazon. It would allow federal regulators to sue to break up companies that operate a dominant platform and own or operate a business that presents a clear conflict of interest.
Amazon is planning to open large retail locations that resemble department stores, The Wall Street Journal reported. The newspaper, citing people familiar with the plans, reported that some of the first Amazon department stores are expected to be in California and Ohio. The locations will take up roughly 30,000 square feet, around the size of a Kohl’s or T.J. Maxx store but only about the third of a size of a traditional department store. The move would mark Amazon’s latest experiment with physical retail stores after stealing market share in the retail landscape from incumbents with its e-commerce business. The department stores are expected to help Amazon sell more clothing and technology products, according to the Journal. The newspaper reported the company started approaching U.S. apparel brands about large-scale stores about two years ago, although it’s unclear which brands would be stocked. The e-commerce giant also plans to sell its own private label goods.
Finance & Economy
As the economy recovers and the market notches new highs, most people are ready to live it up. Between dining out and taking trips, Americans are now spending an average of $765 more a month compared to last year when much of the country was shut down due to the pandemic, according to the MassMutual Consumer Spending & Saving Index. Young adults, in particular, are determined to make up for lost time. Millennials and Gen Z, who reported feeling the financial impact from the rise in re-openings and social gatherings, said they are shelling out $1,016 more a month, on average, than they did during summer of 2020. MassMutual polled 1,000 U.S. adults from July 21 to 28. Many Americans plan to spend even more in the weeks ahead as schools and offices reopen.
Shoppers in the U.S. cut back their purchases in July even more than expected as worries over the delta variant of Covid-19 dampened activity and government stimulus dried up. Retail sales for the month fell 1.1%, worse than the Dow Jones estimate of a 0.3% decline and below the upwardly revised 0.7% increase in June. Excluding automobiles, sales declined 0.4%, according to Commerce Department figures. Consumers make up nearly 70% of all activity in the U.S., so retail sales are watched closely as a gauge to overall economic health. Powered by a series of government stimulus checks, shoppers helped lift the economy out of the shortest recession in history, lasting just two months from the initial coronavirus fears in February 2020 until April, a month after fiscal and monetary authorities unleased a series of unprecedented programs to get the nation through the pandemic.
The number of Americans filing first-time jobless claims last week fell to the lowest level of the pandemic era. The Labor Department said that 348,000 Americans filed for first-time jobless benefits in the week ended Aug. 14, down 29,000 from the prior week. Analysts surveyed by Refinitiv were expecting a smaller decline to 363,000 filings. Continuing claims also hit a pandemic low, falling to 2.82 million for the week ended Aug. 7. Analysts were anticipating the number of filings to decline to 2.8 million. Still, a historically high 11.7 million Americans were receiving some form of unemployment assistance. The labor force could continue to see momentum in the weeks ahead as the $300 per week in supplemental unemployment benefits is set to expire in September. About half of U.S. states ended or announced plans to end the benefits ahead of their expiration.