The Big Story

Is the NBA a Model for Benefit Corporations?

Mike O'Hara

Last Wednesday, members of the Milwaukee Bucks franchise of the National Basketball Association elected to boycott their playoff game against the Orlando Magic to bring attention to the shooting of 29 year old Jacob Blake by a member of the Kenosha, WI police department the prior Saturday.  The Bucks’ action prompted other sports leagues to join the boycott, as did all remaining teams in the NBA playoffs.  Following an intense day of discussions between the players, the NBA Players Association, owners of several teams, and the league office, the NBA players elected to end their boycott and continue the playoffs when the league offered up tangible initiatives designed to address the players’ concerns over systemic racism, including voter suppression and police brutality.

Among the concessions received, the NBA agreed to establish and fund a league sponsored social justice coalition, which prompted President Donald Trump to describe the league as behaving “like a political organization.”  The NBA social coalition will seek to impact social issues such as policing, criminal justice reform and voter rights and accessibility.  Regarding the latter, all NBA teams that own or control their stadiums have agreed to work with local officials to turn their arenas into voting facilities for the 2020 general election in November.  The players were also able to leverage the league and its media partners (who have much to gain by broadcasting the NBA playoffs) to provide social justice advertisements during the playoffs.

The partnership between players and management in the NBA is unique, but it does provide a strong example of the recent trend in corporate governance known alternatively as “CSR” (corporate social responsibility), “ESG” (environment, social, governance), and “Stakeholder Capitalism.”  Historically, corporate law (particularly Delaware corporate law) required corporations to be run for the benefit of stockholders, a mandate evolving from an era when businesses where smaller, and family owned businesses and managers were thought to be fiduciaries for the people who hired them.  With today’s multi-national corporations and broad, liquid stock ownership, the primacy of focusing on the benefit of stockholders is being reconsidered.   In August 2019, the Business Roundtable urged companies to consider the interests of all “stakeholders”—including employees, customers, suppliers, and local communities, in addition to the interests of stockholders, when making decisions and setting goals.  35 states now allow business entities to incorporate as “benefit corporations”.  These entities need to follow certain rules, including publishing public reports of overall social and environmental performance assessed against a third-party standards.  Notably, directors of benefit corporations cannot be fired or sued if they elevate the interests of employees, the environment or social causes over profitability.

Many companies are voluntarily certified B Corporations, described as businesses that balance purpose and profit. According to its website, B Corporations “are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment. This is a community of leaders, driving a global movement of people using business as a force for good.”  B Corporations are subject to independent social audits.

Over the last year, the NBA looks increasingly like a benefit corporation as its players and owners consider the safety of employees and social matters an essential part of their common enterprise.  The league’s high profile may catalyze more businesses to consider adopting this structure.




Headline of the Week

Amazon unveils first Amazon Fresh grocery store in Woodland Hills

Amazon has officially taken the wraps off its long-awaited new grocery store concept in Woodland Hills, Calif., under the Amazon Fresh banner. “We’re announcing our first Amazon Fresh grocery store. It’s a new grocery store designed to offer a seamless shopping experience whether customers are shopping in-store or online,” Jeff Helbling, vice president of Amazon Fresh stores, said in an interview. “With this new store, we’ve taken our decades of operations experience at Amazon to deliver consistently low prices for everyone and free same-day grocery delivery for Prime members.” Technology plays a big role in making Amazon Fresh’s shopping experience more convenient, he noted. Shoppers will be able to use the multifunction Amazon Dash Cart, announced in mid-July, to find items, track purchases and expedite checkout, while new features from Amazon’s Alexa virtual assistant will help customers manage shopping lists and navigate the store’s aisles. A newly built supermarket, the Woodland Hills Amazon Fresh offers an extensive selection of fresh produce, meat and seafood as well as an array of baked goods and prepared foods made fresh daily by the store’s culinary team. Customers also will find a wide assortment of national brands and private labels, including brands from Amazon and its Whole Foods Market subsidiary.



Apparel & Footwear

Crew looks to exit bankruptcy in coming weeks

Crew expects to emerge from Chapter 11 in early September after winning court approval of its reorganization plan this week. The apparel seller’s plans turn $1.6 billion in debt into equity, putting lenders in charge of the company. It also provides new debt capital in the form of $400 million in term loans and an asset-based exit facility worth $400 million. J. Crew was the first major retailer to enter bankruptcy amid the industry-wide disruption caused by the COVID-19 pandemic. While that might be an unfortunate designation, its journey through the Chapter 11 process has been relatively smooth and it now has a chance to firm up its business in an environment still full of rapid change and uncertainty.

Intimates Brand Bare Necessities to Be Acquired by Delta Galil Industries

Delta Galil Industries, the global manufacturer and marketer of branded and private-label apparel products for men, women and children, as well as leisurewear and activewear, announced that it has signed an agreement to acquire leading intimates brand Bare Necessities from Walmart, Inc. The transaction is expected to close in the next few weeks and be accretive to earnings next year, reports Fashion United. Established in 1998, Bare Necessities currently offers over 160 brands and 6,400 styles in intimates, women’s swimwear, shapewear, lingerie, sleepwear, and hosiery. The New York-based company was acquired by Walmart in 2018. Delta Galil has grown to be a globally recognized name, located in four continents, employing 23,000 associates, and working with over 50 industry-leading brands in the U.S., U.K. and Europe. The transaction reflects Delta Galil’s strategic growth objective to diversify its distribution channels and enhance its digital presence.

Longtime CEO of Zappos steps down; successor named

There has been a change at the top of Amazon-owned Zappos. Tony Hsieh, 46, has stepped down as CEO of Zappos after leading the company for 20 years and building it into an online powerhouse with an assortment that extends beyond shoes and an employee-centric culture focused on customer service. Kedar Deshpande, COO of Zappos, has succeeded him as CEO. Hsieh invested in and joined Zappos (whose name is based on “zapatos,” the Spanish word for shoes) in 1999. He became CEO in 2001 and continued to lead the company after it was acquired by Amazon in 2009 for $1.2 billion.

Retailer Chico’s FAS faced tough Q2, but sees better days ahead

Fort Myers-based retailer Chico’s FAS Inc. reported wider losses for the second quarter amid the coronavirus pandemic, but sees better days ahead. While the losses were much greater than a year ago, the second quarter turned out much better than the first, as the company streamlined and pivoted its operations to meet changing customer demands due to the spread of COVID-19, the deadly disease caused by the virus. The company reported a net loss of $46.8 million, or 40 cents a share, for the quarter ending Aug. 1. That loss includes the after-tax impact of inventory write-offs of $8 million, or 7 cents a share, spurred by weaker customer demand and temporary store closures. In the second quarter of last year, the women’s specialty retailer saw much narrower losses of $2.3 million, or 2 cents a share, as it continued to execute on its current turnaround strategy, with its top executive declaring there was “evidence of progress within our business.” Sales improved by 9.2% from the first quarter, driven by a strong digital performance — and store reopenings.

43 Brantano stores saved by German group

German shoe group Deichmann has acquired 43 of the over 100 stores of bankrupt shoe chain Brantano, saving 300 jobs in the process. The saved stores will join Deichmann’s Dutch vanHaren brand, which quadruples its presence in Belgium. The deal will become valid on 1 October, with still much to do in the meantime. Currently, vanHaren has sixteen stores in Belgium: the acquisition means a huge leap forward and “an important step in the ambition” of the chain on the Belgian market. In its Dutch home market, vanHaren is considerably larger, totalling 143 stores. Its owner, Deichmann, is the self-proclaimed leader on the European shoe market, with a presence in 31 countries worldwide.


Athletic & Sporting Goods

United Sports Brands Adds Glukos Energy to Its Roster

United Sports Brands has announced it has acquired Glukos Energy, a leading energy supplement brand. United Sports Brands will utilize its expertise, partnerships and experience to create new market opportunities for Glukos, enabling the brand’s continued focus on ground-breaking product innovation.  Glukos is the fifth brand in the United Sports Brands portfolio, which already includes Shock Doctor, the #1 global leader in mouthguards; McDavid, a brand at the top of the recommended lists of pro athletes, sports medicine professionals and athletic trainers for more than 30 years; Cutters, the innovative leader in the athletic glove market and high performance glove grip technology; and, Nathan Sports the market leader in groundbreaking Running Essentials.


Mike Ashley buys long-time rival’s business out of administration

Mr. Ashley’s Frasers Group said it would buy 46 leisure clubs and 31 retail outlets from DW Sports Fitness for £37m to merge with its own business. Some 922 jobs out of a total of 1,700 across the business will be saved.  DW went bust earlier this month after its income evaporated during lockdown.  The firm owns 75 retail stores and 73 gyms in total, all of which had to close temporarily due to coronavirus restrictions.  Frasers, which also owns Lillywhites, Evans Cycles and House of Fraser, said the DW assets would “compliment (sic)” its own gym and fitness club portfolio, and would now be managed under its Everlast brand.

Cosmetics & Pharmacy

Beauty group Coty plans to sell its factories as it battles pandemic

Indebted cosmetics maker Coty is working on a plan to sell or shut down most of its factories and outsource more operations in a new “asset-light” strategy aimed at weathering the Covid-19 storm, its chairman said. “We are going to become light and nimble,” said Peter Harf, a managing partner at Coty’s majority owner JAB Holdings who has also been serving as chief executive since June. “Cosmetics is a complex business so if we play it like Estée Lauder or L’Oréal, we are dead,” he added in an interview, referring to Coty’s larger competitors. The move comes as lockdowns and store closures sent revenue at the company behind the CoverGirl and Max Factor brands down 63 per cent to $560.4m in the final quarter of the year to June 30. That left Coty, one of the oldest investments by JAB, which manages the wealth of Germany’s billionaire Reimann family, nursing a net loss of $696m for the quarter and $1.1bn for the full year. All the metrics for the final quarter were far worse than analysts had expected, according to consensus compiled by the company.

Shiseido and Yaman Enter a Joint Venture for Skincare and Beauty Devices

Shiseido announced a new joint venture with Yaman Co. for skincare and beauty devices called Effectim Co. Yaman is the number-one Japanese brand in China’s beauty device market. The company has a history of developing professional beauty equipment and technology for at-home devices since 1978. In 1872, Shiseido opened its doors in Ginza, Tokyo. The family business that started out as Japan’s first Western-style pharmacy transformed into a global beauty giant that currently operates in approximately 120 countries and regions around the world. Shiseido’s history and tradition is characterized by a long string of innovations and category firsts that have repeatedly set new standards and whose effects have rippled across the entire beauty industry.

PZ Cussons Sells Ushindi Soap Brand to Pwani Oil Products

PZ Cussons, the UK-based personal and homecare conglomerate, is offloading the Kenyan Ushindi soap brand to Mombasa-based manufacturer Pwani Oil Products. Ushindi is a multipurpose soap for both personal and home care use in the African market. Ramesh Kanji Malde, together with his brothers, Anil and Naresh Malde, began Pwani Oil Company in 1981 focused on the production of coconut oil in Mombasa, Kenya. The operations expanded at the Jomvu Pwani Oil Products factory with corn and sunflower manufacturing before settling for palm oil refining in 1985. The business also owns a range of skincare and soaps like Sawa, Diva Glycerine, and Detrex.

Inglot Cosmetics Irish and UK Business to Enter Liquidation

The family behind the Inglot makeup brand in Ireland and the UK is putting its main Irish holding company into liquidation and closing 20 stores. The color cosmetic brand was founded in Przemysl, Poland, in 1983 by the entrepreneurial chemist Wojciech Inglot. The business has grown through a franchise model. Geraldine Swarbrigg struck a deal with the Inglot founder for the rights to Ireland during the last financial crisis, opening the first store in the Liffey Valley in 2009 and acquiring the UK franchise in 2017. The brand attributed store closures to “the impact of COVID-19 and the immense challenges facing the retail sector” via its Instagram page last month.


Discounters & Department Stores

Walmart sells off 2 more digital brands

Walmart has made deals to sell off two of its online brands, a spokesperson confirmed for Retail Dive., which Walmart acquired for $9 million in 2017, is headed to private equity firm CriticalPoint Capital, according to Bloomberg, which first reported the news. CriticalPoint is the owner of the footwear retailer JackRabbit. Digital lingerie seller Bare Necessities, which Walmart picked up less than two years ago, will go to Israeli apparel maker Delta Galil Industries. Delta Galil issued a press release on the acquisition this week. Details of the two deals were not made public.

With no buyer in sight, Lord & Taylor liquidates all stores

Bankrupt Le Tote and Lord & Taylor on Tuesday said all 38 department store locations have begun going-out-of-business sales, adding a final few to the 24 already in progress. The company said it is “still entertaining various opportunities” in hopes of selling itself as a going concern, according to an emailed press release. But in a statement, Chief Restructuring Officer Ed Kremer said the liquidations are “prudent” in order to maximize the value of the stores’ inventory.

Walmart teams with Microsoft on TikTok bid, eyeing e-commerce, advertising opportunity

Walmart has partnered with Microsoft on the technology giant’s bid to acquire the social video-sharing app TikTok, a company representative shared in a statement over email. The news was first confirmed by CNBC. In its statement, Walmart called out TikTok’s promising capabilities around advertising and e-commerce. The retailer added that the platform could provide an important way for “us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses.”

Dollar stores get another boost from pandemic shopping habits in Q2

Dollar stores got another boost from pandemic-driven shopping during the second quarter. Dollar General comparable sales increased in consumables, home, apparel and seasonal categories, with the company saying that “consumer behavior driven by COVID-19 had a significant positive effect” on sales, according to a press release. All told, Dollar General’s net sales rose 24.4%, to $8.7 billion, in Q2, while comps rose 18.8%. Even with pandemic-related expenses, operating profit was up 80.5%. The company said it plans to accelerate some of its strategic pushes, including the rollout of Pickup and Fresh, and its non-consumables initiative. The company also plans to remodel and relocate more stores than initially planned.



Emerging Consumer Companies

Warby Parker raises $245 million

Warby Parker, the New York-based optical brand, announced the close of $245 million in funding from D1 Capital Partners, Durable Capital Partners, T. Rowe Price and Baillie Gifford. The investment is made up of a Series F round ($125 million led by Durable Capital Partners in Q2 of this year) and a Series G round ($120 million led by D1 Capital in Q3 of this year). The deals value the company at $3 billion.

Clio Snacks, Greek yogurt bar brand, raises $8 million

Clio Snacks, a chocolate-covered Greek yogurt bar brand founded in 2015, announced a $8 million Series C investment round led by its existing investor Alliance Consumer Growth (ACG) with additional participation by AF Ventures, formerly AccelFoods. The company currently offers a line of seven different varieties, including peanut butter, strawberry, and honey, and each serving contains around eight grams of protein and less than 170 calories. Clio Snacks has enjoyed 100% year-over-year growth in sales, and more than 57% growth in distribution over the past year through retailers that include Whole Foods, Target, and Wegmans.

Fashionphile, luxury resale platform, raises $38.5 million

Fashionphile, the online platform focused on pre-owned luxury handbags, watches, and fine jewelry, announced that it has raised $38.5 million in Series B funding led by NewSpring Capital. Founded in 1999 and based in Carlsbad, California, Fashionphile will use the funding to open regional fulfillment centers both domestically and internationally, and enhance automation and artificial intelligence. The investment follows a minority investment in the company from Neiman Marcus in April 2019.



Grocery & Restaurants

Kings Files Voluntary Chapter 11 Petition; ‘Stalking Horse’ Bidder Offers $75 Million

On August 23, KB US Holdings, parent company of Kings Food Markets, the Parsippany, NJ-based regional upscale chain, filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of New York. The bankruptcy petition is a voluntary one and the court has accepted a “stalking horse” bid from investment firm TLI Bedrock to acquire 25 Kings and 10 Balducci’s stores for $75 million. KB US Holdings, whose parent firm is GSSG Capital and is based in Qatar, acquired Kings in 2016 from private equity firm Angelo Gordon & Co. and MTN Capital. Kings/Balducci’s challenges date back several years. And while more upscale retailers have entered Kings’ marketing area (primarily Central and Northern New Jersey) over the past 15 years (including Wegmans, Whole Foods, The Fresh Market and more upscale ShopRites, the market leader), many of Kings challenges have been internal.


Sovos Brands to acquire Birch Benders

Sovos Brands, a food company backed by global private equity firm Advent International, has agreed to acquire Birch Benders, LLC, a maker of better-for-you pancake and waffle mixes, toaster waffles and pancake and baking cups. The acquisition is expected to be completed by the end of October and will expand Sovos Brands’ presence in the breakfast and snacking categories, the company said. Birch Benders will be the fourth brand in the Sovos portfolio, which also includes Rao’s, a line of pasta sauces, soups, frozen entrees and dry pasta; noosa yoghurt; and Michael Angelo’s frozen entrees. Based in Denver, Birch Benders launched in 2011 with an easy-to-make, restaurant-quality pancake mix before expanding into toaster waffles and pancake and baking cups. It also offers a range of organic, plant-based, non-GMO, high protein, paleo and keto alternatives.


Lidl powers up U.S. expansion with another 50 stores

German hard discount grocer Lidl is accelerating its U.S. growth strategy with plans to open 50 new stores by the end of 2021. Arlington, Va.-based Lidl US said Tuesday that it will invest more than $500 million to open the new stores, earmarked for its current nine-state footprint of Delaware, Georgia, Maryland, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, and Virginia. Of Lidl’s planned new locations, the biggest expansion will be in New Jersey and Maryland, which will get 10 new stores apiece. Seven new stores are slated for Virginia, followed by six each for New York and Georgia, five for North Carolina, four for Pennsylvania and one apiece for Delaware and South Carolina. Lidl US currently operates 103 stores.


Home & Road

Williams-Sonoma says e-commerce grew 46% in Q2

Williams-Sonoma, Inc. said e-commerce grew 46% in its second quarter ended Aug. 2. The company reported sequential and year-over-year acceleration in nearly all brands, including Williams Sonoma at a record 29.4%, Pottery Barn at 8.1% and West Elm at 7%. Net revenue growth of 8.8% to $1.491 billion was driven by a significant acceleration in e-commerce revenue growth, the company said. E-commerce penetration reached an all-time high of almost 76% of total company revenues, officials said. “We delivered an exceptional second quarter with net comp growth of 10.5% and demand comp growth of almost 19%, operating margin expansion to nearly double that of last year, and record earnings growth of over 100%,” said Laura Alber, president and CEO. She said the company will accelerate digital growth and fundamentally shift the channel mix of its business, focus its marketing strategy on content and building customer relationships, and step up profitability in its longer term earnings outlook.

Big Lots: Home becoming a non-discretionary purchase

Big Lots generated eye-popping comp gains in hard home, soft home and furniture during the second quarter. Furniture showed the largest dollar increase for the period, with same-stores sales up in the low 40% range. Soft home had the second largest dollar volume jump, with comps up nearly 50%, led by strong sales of bedding, bath and rugs under the Broyhill brand. Hard home comped up in the mid-30s, with particular strength in cookware, dinnerware and small appliances. “In hard home, baking, cooking, all those types of appliance are an opportunity for us for next six months,” Big Lots President and CEO Bruce Thorn told analysts during this morning’s conference call.

Bed Bath & Beyond to lay off 2,800

Bed Bath & Beyond is eliminating 2,800 positions across its corporate headquarters and retail banners, effective immediately. The restructuring is designed to reduce layers at the corporate level, reposition field operations and realign technology, supply chain and merchandising teams to support strategic growth initiatives, the company said in a statement late Tuesday afternoon. The changes are expected to save the company approximately $150 million. This is in addition to the expected $85 million in SG&A savings associated with the restructuring program the company announced in February. The changes give the company financial flexibility and enable it reinvest “where it matters most to our customers and our people,” CEO Mark Tritton added, citing a strong customer response to BOPIS and curbside pickup and continued strength in its digital channels.

Jewelry & Luxury

Tiffany swings back to profit in Q2

Tiffany & Co. on Thursday reported that second quarter net sales fell 29% to $747 million as comparable sales declined 24%. E-commerce grew 123%, and for the first half of the year was about 15% of total global net sales, versus 6% in each of the last three fiscal years. Net earnings fell 77% to $31.9 million, as gross profit reached $461.6 million or 61.8% of sales, according to a company press release. Regarding its merger agreement with Parisian luxury conglomerate LVMH, Tiffany also said it recently extended the date before which either party could walk away from the deal without penalty to Nov. 24. LVMH in turn has notified the jeweler that “it reserves the right to challenge the validity of the extension,” per the release.

De Beers Cuts Diamond Prices After Covid-19 Curbs Demand

De Beers has finally decided to cut the price of its diamonds in a bid to spark sales after the coronavirus pandemic paralyzed the industry. De Beers, the world’s No. 1 producer, told customers that it is cutting prices for larger stones by almost 10% at its sale starting this week, according to people familiar with the situation, who asked not to be identified as the details are private.

Amazon Isn’t Synonymous with Luxury. That May Be Changing built its brand by offering a vast array of products at low prices, the very antithesis of the exclusivity associated with luxury goods. But Amazon may be changing. In September, Women’s Wear Daily reported, the etailer is planning to launch a luxury platform that could include a dozen brands. Amazon wouldn’t comment. But Bank of America Merrill Lynch’s Justin Post has a few thoughts on the idea. There is a “large, long-term value creation opportunity from luxury,” he writes, with a $300 billion total addressable market.

Movado Inks Deal with Calvin Klein

Movado Group signed a licensing agreement with Calvin Klein to create a new line of watches and jewelry. The five-year deal will begin in January 2022. The company already partners with owner PVH Corp. on its Tommy Hilfiger licensed brand. Calvin Klein was on the lookout for a partnership after the end of its 22-year-long licensing deal with Swatch Group. Swatch chose to let the licensing agreement expire in October 2019, citing “turbulence and uncertainties at the management level,” which included office closings, layoffs and changes to executive management.


Office & Leisure

Las Vegas Strip Casino Revenue Tumbles 39%, Even with Cheap Hotel Rooms

Casino revenue on the Las Vegas Strip fell 39% to $330.1 million in July from a year ago, the first full month properties were open after the coronavirus shutdown, showing the city is struggling to win back customers. Nevada’s total casino revenue tumbled 26% to $756.8 million, officials said Wednesday. That will hurt tax revenue at a time when virus-related expenses are rising, since gaming furnishes a large share of the state budget. The Las Vegas numbers underscore the difficulties faced by economies dependent on air travel, with consumers still reluctant to venture far beyond their homes for entertainment. Nevada casinos began reopening June 4, with restraints on capacity. Some properties remain closed. Las Vegas resorts have also been hurt by their inability to offer live entertainment or host meetings of more than 50 people. Rooms at MGM Resorts International’s MGM Grand and Caesars Entertainment Inc.’s Paris can be had for under $50 a night.

Away Just Launched Its First Travel Pet Carrier

Now it’s easier than ever for you and your pet to travel in style. If you’re frequently traveling with your furry friend, a sturdy, safe, and comfortable pet carrier is an absolute must-have. And since Away is such a trusted name in stylish, durable luggage, it’s no surprise the brand’s latest launch, a pet carrier, lives up to the same high standards. Away’s Pet Carrier is certified by the Center for Pet Safety (CPS) and meets Federal Aviation Administration (FAA) requirements.

Lindblad Expeditions Raises $85 Million to Improve Financial Flexibility, Support Long-Term Growth

Lindblad Expeditions Holdings, Inc. today reported that it has entered into an agreement with a group of investors, including MSD Partners, L.P., Durable Capital L.P., Headlands Capital, Deep Field Asset Management LLC and Declaration Capital, for the private placement of $85 million of convertible preferred stock. The Investors have agreed to make an investment of $85 million in newly-issued convertible preferred stock that carries a 6 percent dividend, which is payable in kind for two years and thereafter in cash or in-kind at the company’s option. The preferred stock is convertible into shares of Lindblad common stock at a conversion price of $9.50 per share, representing a premium of 23 percent to Lindblad’s 30-trading day volume-weighted average price. On an as-converted basis, the preferred stock will represent approximately 15.5 percent of the pro forma common shares outstanding. The net proceeds from the investment will be used for general corporate purposes. On a pro forma basis, Lindblad’s liquidity position at June 30, 2020, would have been approximately $187 million when factoring in this $85 million investment from the Investors.


Technology & Internet

Best Buy says online sales in U.S. surged 242% in second quarter, but shares slide as gains may be short-lived

Best Buy on Tuesday reported strong second-quarter sales growth, helped by its biggest quarterly increase in online sales ever, but cast a cautious eye toward the future as it said everything from stimulus to the unemployment rate could change how much customers spend. Shares of the company were down more than 5% Tuesday morning, as Best Buy referred to the uncertain economic backdrop and declined to provide a financial outlook for the rest of the year. Online sales shot up 242% in the U.S. compared with the prior year, as the website drew higher traffic and more people converted from browsing to buying. Sales at stores open at least a year grew by 5.8%, higher than the 2.3% that Wall Street expected. That same-store sales growth was its highest in two years, even though its stores were open by appointment only for the first six weeks of the quarter.


Amazon unveils Halo to battle Apple Watch and Fitbit — tracks activity, body fat, emotions

Amazon is entering the wearables market in a big way. The company on Thursday introduced a wristband for health and fitness tracking called Halo, alongside a subscription service and smartphone app. The space is currently dominated by the Apple Watch and devices from Fitbit, which is awaiting regulatory approval for an acquisition by Alphabet’s Google. Amazon’s Halo product builds on these older fitness tracking devices with features that have never been seen in a mainstream wearable device, including one that tracks a user’s emotional state by listening to the tone of their voice, and another that provides a three-dimensional rendering of their body with an estimated body fat percentage. It’s a departure for Amazon’s hardware business, which has previously focused on in-home devices, such as the Echo smart speakers and the Fire TV streaming video devices.


Finance & Economy

US consumer spending rose a moderate 1.9% in July

U.S. consumers increased their spending by 1.9% last month, a dose of support for an economy struggling to emerge from the grip of a pandemic that has held back a recovery and kept roughly 27 million people jobless.  The July gain marked the third straight monthly increase in consumer spending, the primary driver of the U.S. economy, but represented a slowdown from the previous two months. The consumer spending report arrives amid a hazy economic landscape, with high unemployment, struggling businesses and deep uncertainty about when the health crisis will be solved and when people and companies will feel confident enough to spend and hire normally again. It also comes weeks after the expiration of a $600-a-week federal unemployment benefit deprived millions of a key source of income and dimmed the outlook for consumer spending.


U.S. core capital goods orders slow in July from prior month, durable goods surge 11.2%

New orders for key U.S.-made capital goods slowed in July, suggesting the rebound in business investment could become more gradual amid uncertainty about the course of the Covid-19 pandemic, even as the recovery in manufacturing appears to be gaining traction.  Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, increased 1.9% last month, the Commerce Department said. These so-called core capital goods orders jumped 4.3% in June.