On Instagram this past Tuesday, Kim Kardashian announced the end of E! network’s reality television show Keeping Up With the Kardashians after 14 years and 20 seasons. For fans of overindulgent drama and intrigue, fear not. Our cravings can be satisfied over the coming months with the fallout from another announcement last week: LVMH’s decision to walk away from its blockbuster acquisition of Tiffany & Co.
Last November, luxury conglomerate LVMH reached a deal with Tiffany to acquire the premier American luxury jeweler for $16.2 billion. At the time, LVMH CEO Bernard Arnault praised Tiffany as “an outstanding addition to our unique portfolio of luxury brands”. Ten months later, in the middle of a global pandemic, nationwide civil rights demonstrations, and a highly volatile political climate, LVMH sees things differently.
In June, rumors began to circulate that LVMH’s board of directors was concerned about the state of the U.S. market (Tiffany’s largest at 37% of 2019 sales) due to the coronavirus pandemic as well as large-scale protests over racial injustice. Publicly, LVMH stood firmly behind the deal.
However, in July, trade relations between France and the U.S. became increasingly tense. In response to a French digital services tax that seemed disproportionately to affect U.S.-based enterprises, the Trump administration proposed a retaliatory tariff effective January 6, 2021. In the midst of this escalating trade dispute, France’s Minister for Europe and Foreign Affairs asked LVMH to defer the Tiffany acquisition until the same January 6 of next year, which is beyond the deal’s contractual deadline of November 24.
It is this letter that LVMH first pointed to as justification for abandoning the Tiffany deal. In its announcement, LVMH used the phrases “prohibited”, “legal restraint”, “binding upon us” and “no choice” to describe the impact the letter had on the pending transaction. Tiffany pushed back against this aggressively with its Chairman, Roger Farah, stating that “there is no basis under French law for the Foreign Affairs Minister to order a company to breach a valid and binding agreement”.
The same day LVMH announced its abandonment of the acquisition, Tiffany filed suit in Delaware Chancery Court seeking specific performance of the contract. Tiffany alleges that LVMH, despite assuming all the risks of adverse industry trends or economic conditions, started to slow-walk closing procedures, particularly the process of obtaining required regulatory approvals, once COVID began spreading aggressively in the U.S.
In addition to the ministry letter, LVMH points to alleged Tiffany mismanagement and underperformance during the pandemic as justification for walking away from the deal. “LVMH considers, among other things, that this period is impacted by a Material Adverse Effect, that Tiffany did not follow an ordinary course of business . . . and that the operation and organization of this company are not substantially intact”.
Admitting that LVMH is “not entirely happy with the way the company [Tiffany] has been managed and performed” may explain the announcement to walk away rather than negotiate an extension of the transaction deadline. Investors and media have speculated that LVMH invited French government intervention to facilitate a loophole through which it could exit the deal, although LVMH has firmly denied this allegation. In a statement, Tiffany CEO Alessandro Bogliolo defended the management of the company during the pandemic as well as its financial performance and outlook.
In M&A, litigation is often a leverage tactic for negotiation. While the interim back-and-forth in court filings and statements to the press will be dramatic, what is really interesting to those of us in the industry will be whether the ultimate outcome is a true parting of ways or if there is a resuscitated deal to be had.
Headlines of the Week
After months of speculation that it was backing out of its deal to acquire Tiffany & Co., LVMH announced Wednesday that the deal is off. The $16.2 billion acquisition, which would have been the biggest deal in the history of luxury goods, was announced in November 2019. The French conglomerate wrote in a statement that its board tabled the acquisition after considering a letter from the French European and foreign affairs minister that recommended delaying the deal until after January 2021, due to the steep taxes the United States imposed on French products this summer.
Mall operators Simon Property Group and Brookfield Property Partners have agreed in principle to acquire J.C. Penney out of bankruptcy, an attorney for the retailer said at a court hearing Wednesday. The deal values Penney at just under $1.8 billion all told, including cash and new term loan debt. It would also spin off some of the retailer’s real estate assets into entities owned by a group of secured lenders. Those would include 161 of Penney’s real estate assets and all of its owned distribution centers, according to a press release. The parties have executed letters of intent and hope to file an asset purchase agreement with the court within 10 days, said Kirkland & Ellis partner Joshua Sussberg, who is representing Penney in its Chapter 11 case.
Apparel & Footwear
J.Crew Group announced that it has successfully completed its financial restructuring process and emerged from Chapter 11 well positioned for long-term growth. As part of its financial restructuring, the Company has equitized more than $1.6 billion of secured indebtedness, and Anchorage Capital Group, L.L.C. has become the majority owner of the Company. To support ongoing operations and future growth initiatives, J.Crew Group is capitalized with a $400 million exit term loan due 2027 provided by Anchorage, as well as GSO Capital Partners LP and Davidson Kempner Capital Management LP, among others. In addition, the Company has access to a new $400 million ABL credit facility due 2025 agented by Bank of America, N.A.
Veteran fashion executive Neil Fiske will join Marquee Brands as its first chief executive officer, it was announced Sept. 8. Marquee Brands is a brand owner, marketer and media company with a portfolio that includes Dakine, Body Glove, BCBG, Martha Stewart, Ben Sherman, Bruno Magli and Sur La Table. Founded in 2014, Marquee Brands is owned by investor funds that are managed by Neuberger Berman, according to Sam Porat, managing director. Most recently, Fiske served as president and chief executive officer of the Gap, Inc. brand. He left Gap in February. Previously, he served as CEO of the surf brand Billabong International and the president and CEO of the Eddie Bauer brand.
Coldwater Creek will be revived – online and in print. CWC Companies, parent company of the women’s apparel retailer, which shut down operations at the end of July, has been acquired by Newtimes Group, one of world’s largest supply providers to the apparel industry. The Hong Kong-based Newtimes said it purchased CWC’s inventory and intellectual property assets from Sycamore Partners for $12.2 million. Newtimes plans to operate the acquired assets as an independent entity under the newly formed Coldwater International and will provide sourcing and back-office support. The company plans to relaunch the Coldwater Creek website in a few weeks and issue a new Coldwater Creek catalogue before the end of the year. Newtimes Group offers fabric, product development, design, sourcing, technology and quality control solutions to retailers in North America, South America and Europe.
Philip Day’s Edinburgh Woollen Group is believed to be weighing up the sale of some of its brands after it was approached by several interested buyers. The interest is said to have been unsolicited, and comes primarily from international strategic investors – including parties based in China – who are interested in British heritage labels because of their appeal abroad. EWM’s brand portfolio includes Jaeger, Peacocks and Austin Reed. The retail group, whose main business is the Edinburgh Woollen Mill, has appointed an adviser to evaluate the bids, according to the trade publication Drapers. It is understood any sale would be on a solvent basis. EWM acquired the Austin Reed name, its stock and five concessions in Boundary Mill Stores in 2016. It added Jaeger after the premium brand went into administration a year later.
On Tuesday, Montreal-based fashion company Groupe Dynamite filed for and obtained creditor protection to restructure its operations. The company operates stores in Canada as well as internationally under the Dynamite and Garage banners. It’s not yet clear how many stores will be closing as negotiations with landlords are said to be ongoing to determine which stores will remain open. Groupe Dynamite operates 400 stores under the Dynamite and Garage banners globally in eight countries. While Canada is the biggest market in terms of store count, Groupe Dynamite operates 82 Garage stores in the United States as well as three Dynamite locations. The company has franchised stores in the Middle East as well.
Athletic & Sporting Goods
Lululemon on Tuesday reported surprise revenue growth, despite lockdowns during the height of the coronavirus pandemic, as stores started reopening in the fiscal second quarter and consumers stocked up on workout apparel and yoga accessories. On an unadjusted basis, Lululemon’s net income shrank during the second quarter to $86.8 million, or 66 cents a share, from $125 million, or 96 cents a share, a year earlier. Its revenue rose about 2% to $902.9 million from $883.4 million a year earlier, topping expectations for $842.5 million. Its online sales were up 157%. Lululemon ended the period with $523 million in cash and cash equivalents on its balance sheet. At the end of June, Lululemon announced its plans to buy the at-home fitness company Mirror, which sells a $1,500 high-tech mirror to stream live workout classes. It closed on the transaction in early July.
Academy Sports and Outdoors Inc, owned by U.S. private equity firm KKR & Co, filed for an initial public offering in the United States, making it the latest firm to cash in on the stunning recovery in capital markets from the COVID-19 pandemic. The company intends to list its shares on the Nasdaq under the symbol “ASO”. Academy Sports, which KKR bought in 2011, has 259 stores across the United States that sell sporting equipment including footwear, apparel, tents, and bicycles.
American private equity firm Wind Point Partners has recently signed an acquisition deal with the one of the biggest direct-to-consumer (D2C) eCommerce providers of drinkware, RTIC. Reportedly, RTIC is Wind Point’s third acquisition of a family-owned enterprise this year. Founded by brothers Jim and John Jacobsen, RTIC quickly rose into fame for its high-quality and affordable tumblers, coolers, travel bags and bottles. These insulated drinkware and premium coolers are tailormade for customers like outdoor enthusiasts. Wind Point has also invested in various other consumer product companies like Tropicale Foods, U.S. Nonwovens, Evans Food Group, Voyant Beauty, Petmate and Bushnell Outdoor Products.
Roark Capital, an Atlanta-based private equity firm focused on investing in multi-location businesses, announced that its affiliates have invested in US Sports Camps. US Sports Camps is the nation’s leading youth sports camp company, serving more than 100,000 campers annually across 1,200+ camps in 48 states. Founded in 1975 and headquartered in San Rafael, CA, US Sports Camps is the licensed operator of Nike Sports Camps. US Sports Camps’ offering spans 19 different physical sports, Esports, and academic programs for campers ranging from 6 to 18 years old. The Company partners with leading academic facilities and local coaches to operate exceptional camps, clinics, and programs for kids.
Cosmetics & Pharmacy
Edgewell Personal Care announced the closing of its previously announced acquisition of Cremo for $235 million. Known for its men’s grooming products, Cremo’s portfolio ranges from beard, hair and shave prep products, as well as skin care items and fragrances. Through the acquisition of Cremo, Edgewell looks to expand its men’s grooming offerings, which already include Jack Black and Bulldog.
District Ventures Capital closed a $3.5 million equity investment with Premama Wellness. Founded in 2011 by Dan Aziz, the Premama product line provides women with a variety of nutrient-rich, maternity wellness products. The company has focused its core offerings into stages, which start from priming the body for pregnancy to helping restore nutrients postpartum—and everything in between. From fertility boosters to lactation supplements, the products can be used as part of the four-stage system, or stand-alone, throughout parents’ pregnancy journey. While focused primarily on women, the company also produces a fertility supplement for men which supports male reproductive health and improves sperm quality, motility, morphology, and function.
Discounters & Department Stores
Walmart is testing drone delivery with the drone company Flytrex, the retailer announced in a Wednesday blog post. The pilot program will deliver “select grocery and household essential items” from Walmart stores to homes in Fayetteville, North Carolina. Flytrex says its drone can carry 6.6 pounds for 3.5 miles and back, according to the company’s website. The most recent model has some limitations as it “does not fly in the rain and at wind gusts stronger than 18 miles per hour.”
Macy’s, which is known for kicking off the holiday season with its nationally televised Thanksgiving Day parade, is painting a picture of a holiday season unlike any other. As the country grapples with the global coronavirus pandemic, CEO Jeff Gennette said Wednesday he is anticipating a more drawn-out holiday season — with shopping kicking off in earnest prior to Turkey Day. And with fewer activities to do and events to attend, Macy’s also expects consumers won’t be exchanging so-called experiential gifts like Broadway tickets. Instead, Gennette is predicting categories like beauty and home to be trending for gift-giving.
There’s a new, easy way to get rewarded when shopping at Kohl’s. Starting Tuesday, the Menomonee Falls, Wisconsin-based retailer rolls out its Kohl’s Rewards program nationwide, replacing previous loyalty program Yes2You Rewards in which members earned points on purchases that were then converted into rewards. Now, with the free program, members earn 5% Kohl’s Cash daily on every purchase and will get personalized deals and perks like a birthday gift. “We’ve eliminated points as part of Kohl’s Rewards and changed our currency into Kohl’s Cash,” Greg Revelle, Kohl’s chief marketing officer, said in an interview with USA TODAY. “So that will make it much easier for customers to understand what they’re earning, what they have available and how to redeem it.”
Emerging Consumer Companies
Everlane, the San Francisco-based sustainable apparel brand, raised $85 million in Series F funding led by L Catterton. The investment comes after a tumultuous 2020 for Everlane, with store closings, employees who attempted to unionize and were subsequently laid off as part of the company’s COVID response, and allegations of anti-Black behavior.
Behold, the Los Angeles based tech platform that allows customers to browse outfits recommended to them by artificial intelligence and a group of professional stylists, raised $5 million from Los Angeles area investors that Upfront Ventures, Greycroft, Troy Capital Partners, TenOneTen Ventures and Zillow. Behold’s website is set up like a personality quiz for clothes. After “training your stylist” by adding measurements, your budget, and a few favorite designers, the website generates a curated board of outfits using its “Smart-Collab” technology.
Partake Brewing, a leading non-alcoholic beer brand, raised $4 million in its first institutional funding round. The investment was led by San Francisco based CircleUp Growth Partners. Launched in 2017, Partake has been self-funded to date. The product line offers low calorie profiles (10 calories per can), and a focus on flavor, health, socializing and inclusivity for people who choose not to drink alcohol, whether as a need or a lifestyle choice.
Grocery & Restaurants
A group of minority shareholders and current management of Red Lobster Seafood Co. is acquiring the casual-dining chain from Golden Gate Capital, the new controlling consortium said Monday. The new owners are seafood supplier Thai Union PCL, which has been a Red Lobster shareholder since 2016 and trades on the Stock Exchange of Thailand under the TUI ticker, current Red Lobster management and a new company called Seafood Alliance with key shareholders Paul Kenny and Rit Thirakomen. Thai Union first became financially involved with Red Lobster in 2016, when it bought $575 million shares in the company and was given two members of its board of directors. Thirakomen is the Chairman, CEO and controlling shareholder of the Bangkok, Thailand-based MK Restaurant Group, which has more than 700 restaurants in five countries. Kenny is the former CEO of Minor Food Group, which operates more than 2,000 casual-dining and quick-service restaurants in 27 countries. Golden Gate Capital had purchased Red Lobster from Darden Restaurants Inc. in 2014.
Southeastern Grocers plans to sell 23 stores under its Bi-Lo and Harveys Supermarket banners to grocery wholesaler and retailer Alex Lee and independent operator B&T Foods. Financial terms of the transaction weren’t disclosed. Southeastern Grocers said Tuesday that Alex Lee is slated to buy 20 Bi-Lo stores, while B&T is purchasing two Bi-Lo locations and one Harveys store. The Bi-Lo stores being sold are in South Carolina (18 locations) and Georgia (four locations), while the Harveys store being sold is in Ridgeland, S.C. With the sale agreements, Southeastern Grocers continues its planned dissolution of the Bi-Lo supermarket banner. The phaseout of Bi-Lo is part of a five-year business transformation strategy since Southeastern Grocers emerged from Chapter 11 bankruptcy in mid-2018.
Levine Leichtman Capital Partners has agreed to purchase fast-casual chain Tropical Smoothie Café, the Los Angeles-based private equity firm said Tuesday. Management, led by CEO Charlie Watson, will remain the same. Atlanta-based Tropical Smoothie Cafe franchises more than 870 fast-casual restaurants in 44 states and has continued to perform well during the novel coronavirus pandemic. The chain specializes in sandwiches and flatbreads as well as smoothies.
The Kroger Co. tallied a nearly 15% gain in identical sales for its fiscal 2020 second quarter, with adjusted earnings per share hitting the high end of Wall Street’s forecast. For the quarter ended Aug. 15, sales climbed 8.2% to $30.49 billion from $28.17 billion a year earlier, Kroger said Friday. The Cincinnati-based supermarket giant noted that sales were up 13.9% excluding fuel. Identical sales excluding fuel surged 14.6% year over year, compared with a 2.2% uptick in the fiscal 2019 quarter. “Despite the pandemic-related challenges, we delivered extremely strong results in the second quarter. Customers are at the center of everything we do, and as a result, we are growing market share. Kroger’s strong digital business is a key contributor to this growth, as the investments made to expand our digital ecosystem are resonating with customers,” Chairman and CEO Rodney McMullen told analysts in a conference call on Friday.
Home & Road
RL Industry, a carbon steel bakeware and cookware manufacturer, has acquired the well-known American nonstick bakeware brand Baker’s Secret. RL Industry will design, manufacture and market Baker’s Secret-branded products of bakeware, cookware and kitchen gadgets globally with an expected launch of early October. Baker’s Secret was founded in 1972. “We are proud to have the opportunity to bring new life to the Baker’s Secret brand and bring it to loyal bakers everywhere,” said RL Industry CEO Aharon Daniel. “Our experience with metals, particularly cold rolled steel, and nonstick surfaces, coupled with our advanced manufacturing techniques, makes us uniquely qualified to bring these baking and cooking products to food enthusiasts all over the world.” Founded in 2003, RL Industry became the official licensor of Betty Crocker in the U.S. in 2017.
The Home Depot is playing the long game this upcoming holiday season. Acknowledging that the holidays “might be different this year,” the home improvement giant said it is reinventing Black Friday by extending its prices throughout the season, starting in early November and lasting throughout December. The deals will be available in-store and online. “Say goodbye to one day of frenzied shopping and enjoy Black Friday savings all season long without the stress and crowds,” Home Depot stated in a release. The deals, available in-store and online, will be featured in every aisle and across the chain’s web site on items such as holiday décor, online home décor, appliances, smart home, tools and hardware. Home Depot said it is also collaborating with Pinterest to inspire do-it-yourself handmade gifts. In another change, the retailer will offer its mobile app users exclusive access to view deals in November before they go live online.
RH said total company demand increased 16% in its second quarter ending Aug. 1. RH Core demand increased 24%. Adjusted net revenues were $709.7 million vs. $706.5 million in the year-earlier quarter. Adjusted gross margin increased 550 basis points to 47.5%. In a letter to shareholders, Chairman and CEO Gary Friedman said the home furnishings company’s emergence as “a luxury brand generating luxury margins has arrived years sooner than expected, and we now believe we will reach 20% adjusted operating margin in fiscal 2020 with mid-single digit revenue growth. If revenues grow at a higher rate in the second half, we would expect adjusted operating margins to expand beyond 20% and now see a long term path to 25% adjusted operating margins.”
Chairish Inc., a high-end home décor marketplace, has raised $33 million in a Series B funding round led by Austin, Texas-based investment firm Tritium Partners. “The home is playing a dramatically larger role in our lives and Chairish’s growth metrics reflect this growing importance,” said Gregg Brockway, CEO and co-founder. “Over the past year, Chairish’s gross revenue has more than doubled. The Tritium investment helps us take advantage of this unique market opportunity and build upon our record growth by further empowering high-end sellers and design lovers to connect online.” Brockway said that with the new funding, Chairish will grow its team, expand specialized services for sellers and buyers, particularly interior designers and explore more strategic acquisitions, based on the success of its 2019 acquisition of online trade marketplace Dering Hall.
Jewelry & Luxury
Amazon has been pushing aggressively into the fashion, jewelry, and accessories categories since 2012. In affordable fine jewelry, Amazon has morphed into a formidable player. In March we reported on its ever-improving selection of fine and demi-fine jewels. And at the time we noted that “we don’t see it stocking Irene Neuwirth and David Webb—or even more affordable sought-after brands such as Mejuri or AUrate—anytime soon.” How wrong we were. It seems brands of that ilk will be erecting permanent homes on America’s biggest retail platform in short order.
Neiman Marcus received court approval last week for its plan to reorganize in Chapter 11. The luxury department store chain, which filed for bankruptcy in May, expects to emerge from the court process by the end of September, according to a press release. The court-approved plan would eliminate $4 billion in debt and $200 million in interest expense while leaving no near-term maturities, Neiman said in a press release.
The third time was not the charm for Spence Diamonds. Spence, the venture capital–backed Canadian retailer that opened five U.S stores in the last four years, has closed them all and exited the U.S. market, acting CEO Callum Beveridge tells JCK. “We had a U.S. strategy, but the impact and the uncertainty caused by the [COVID-19] pandemic forced a significant review of the business,” he says. “We were looking at how to make that business profitable. We were committed to that business, but obviously that turn of events created a very different scenario.”
Office & Leisure
The Michaels Companies has debuted an enhanced shopping experience complete with a new layout, “inspiration hubs” and an innovative checkout design. The new design includes concrete floors, updated signage and lower fixturing that allow customers to easily view and navigate the store’s full assortment. The updated checkout system leverages advanced technology to facilitate shop-and-scan capabilities and is designed to serve as additional storage for curbside, delivery, and buy online pick up in store orders. The redone spaces also feature “inspiration and trend” hubs in the fine art, kids, seasonal and custom framing departments. Within each hub, customers can touch and feel the products prior to purchase in new ways, such as creating their own floral arrangement on a floral table or trying out markers in the fine art hub. In addition, the stores include dedicated square footage (called “maker space”) where customers can take classes, watch an instructor-led project on display screens in the space, or simply use the space and supplies-all free of charge.
The world’s largest video game retailer told analysts on its quarterly earnings call that it’s on track to close about 400 to 450 stores worldwide during its current fiscal year, which is more than the 320 stores GameStop said in March that it was planning to shutter. “These closures, along with the growth in our online business and expanded omnichannel capabilities will allow us to more efficiently and profitably service our customers,” GameStop CFO Jill Bell said on the call. GameStop’s net sales fell 26.7% to $942.0 million in the quarter ended Aug. 1, with the decline reflecting the impact of a 13% reduction in total store operating days amid the pandemic and a reduction in the retailer’s store base. Comparable store sales declined 12.7%, adjusting for fewer store operating days due to store closures. Global E-commerce sales surged 800%, accounting for 20% of total sales. GameStop was struggling before the pandemic. Its sales have been on the decline in recent years as more game revenue goes digital. But hardware remains a key component and two hotly awaited new consoles – PlayStation 5 and Xbox Series X – are set to launch in time for the holiday season.
The owners of Petco Animal Supplies Inc. are exploring a sale or initial public offering that could value the retail chain at $6 billion, including debt, according to people with knowledge of the matter. CVC Capital Partners and Canada Pension Plan Investment Board are interviewing potential advisers while reviewing strategic options, said the people, who requested anonymity because the talks are private. Formal efforts around a sale or IPO are not expected to kick off until next year, one of them said. The owners could still decide to retain the company. Moody’s Investors Service downgraded Petco’s corporate family rating and probability of default rating deeper into junk territory in April, citing a tough competitive landscape despite the chain’s substantial market presence. Private equity investors CVC and CPPIB acquired the San Diego-based company for $4.6 billion from TPG and Leonard Green in 2016, a decade after those two firms took Petco private.
Brazilian pet store chain Petz, controlled by U.S. private equity firm Warburg Pincus, raised on Wednesday 3.03 billion reais ($570.71 million) in an initial public offering, according to a securities filing. Petz plans to use the proceeds to open new stores and veterinary hospitals. Currently it has 110 stores. A raft of Brazilian retailers have launched share offerings despite the economic crisis stemming from the coronavirus pandemic. Despite the coronavirus crisis, sales at Petz rose by 36.6% in the first half from a year earlier, to 731.6 billion reais, as it opened new stores and boosted on-line sales. Brazil is the world’s No. 3 pet market, according to Euromonitor, expected to amount $6.7 billion, behind the U.S. and China.
Gift retailer The Paper Store exited Chapter 11 Tuesday, after filing for bankruptcy less than 50 days ago. Backing the retailer in its reorganization is a group of investors led by real estate firm WS Development. The group buying The Paper Store out of bankruptcy paid $22 million for the retailer along with assumed liabilities, according to court documents. The Paper Store filed for bankruptcy in mid-July eyeing a quick sale of its business that would keep the entity alive. It set a tight timeline for itself to do so, acknowledging the importance of keeping the retailer on track and operating with certainty about its future going into the holiday season, which is crucial for everyone but all the more so for a gift specialist like The Paper Store. The company got its quick sale and a relatively quick bankruptcy. Not all retailers to file this year can say the same.
Technology & Internet
With its flat $2 fee for 30-minute deliveries of junk food and booze, GoPuff is having a very good pandemic. Orders are up four-fold at the SoftBank-backed startup but hypergrowth comes with problems: high costs, low margins and unreliable drivers. Founded in 2013 as a late-night service for college students to order junk food, rolling papers and condoms, GoPuff has gone mainstream, and now offers 3,000 items ranging from over-the-counter medicine and laundry detergent to pet food and nail polish—all delivered in around 30 minutes for a flat $2 fee.
33% of merchants don’t sell on Amazon—and don’t plan to. That’s according to a Digital Commerce 360 survey of 118 retailers and brands in May 2020. What’s more, 14% of respondents said they’ll revisit their reliance on Amazon this year. Many brands avoid selling on Amazon because of the platform’s drawbacks. Sellers don’t have access to customer data. They can’t remarket to shoppers who purchase their products and can’t control the customer experience. These are only a few problems retailers name.
Finance & Economy
Consumer borrowing rose again in July largely for big purchases such as new autos or college tuition, but Americans remained cautious about spending in light of the U.S. economy’s slow recovery from the coronavirus. The use of credit has risen twice in a row after slumping from March through May, according to the latest Federal Reserve report. The use of credit had sunk nearly 20% in April during the worst of the pandemic.
Meet Generation Novel, a growing cross-generational psychographic of digital-first consumers galvanized by the disruptive effects of COVID-19. This emergent and significant customer segment isn’t just digital-centric. It’s also emotionally charged, as pandemic-fueled fear, anxiety, and worry take their toll. When the onset of COVID-19 led to closures and shelter-in-place rules, the physical normal we knew changed overnight. The mechanics of life—communicating with loved ones, keeping up with news, working, learning, and shopping—were now centered on digital platforms.
Weekly jobless claims were worse than expected last week amid a plodding climb for the U.S. labor market from the damage inflicted by the coronavirus pandemic. The U.S. economy is recovering from an unprecedented shock brought on by the virus. Nonfarm payrolls declined by some 22 million at the onset of the crisis, and about half those jobs have been recovered so far. However, even August showed some slowing in those gains, even though the 1.4 million growth was better than Wall Street estimates.