Thank you to all our presenters, exhibitors, sponsors and guests for joining us once again at last week’s Consensus Great Brands Show. We were thrilled to be back for our tenth show after pausing for several years due to the pandemic. Supported by tremendous positive feedback from many who were there, our view is that the latest show was the best one yet.
Throughout the day, elements of the theme, The Future of Better Living, were woven into the presentations and products of our participating companies. Jason Karp of Humanco, one of our featured special guests, told us the compelling story of how he cured himself of numerous illnesses through changes in his diet, inspiring him to start, sell and then invest in clean food companies. Founder Dan Freedman described how his journey from high school dropout to advanced degrees from Yale and INSEAD was enabled by nootropics, leading him to start his company, Thesis, to share his solution with others. CEO Elizabeth Gazda of Embr Labs described how her company’s product, the EMBR Wave, helps both women and men control body temperature spikes through a watch-like device worn on the wrist.
An element of better living, sustainability, was highlighted by several presenters. Fair Harbor, a certified B Corp founded by siblings Caroline and Jake Danehy, is known for its clothing made with recycled plastic bottles and environmentally friendly fabrics. Two more of our featured special guests, Scarlett Johansson and Kate Foster, spoke with our colleague Tara Foley (a founder herself) about their sustainable skin care brand The Outset.
Attendees lucky enough to see some of our prior nine shows could not help but notice a more diverse group of founders and presenters this year. Half of our presenting companies were founded and/or are run by women. In addition to those highlighted above, Thirteen Lune, which features beauty brands founded by Black and Brown founders, was started by Nyakio Grieco and her partner Patrick Herning. The winners of the University of Georgia Collegiate Brands Competition, Gently Soap and SWAKE, were well represented by founders Kristen Dunning and Vanessa Sachs, respectively. We also heard presentations from Kate Boyer of Anatomie, Natalie White of Moolah Kicks, and Kat Cole of Athletic Greens.
When you entered the Great Hall, the energy in the room emanating from the 40+ food, beverage, beauty and wellness exhibitors was inspiring. The Hall opened at noon, and from that moment on until the end of the day we had a steady stream of guests sampling food and other products and interacting one on one with exciting up-and-coming founders and their brands. We hope during your visit to the Great Hall you had time to enjoy the delicious food products served by the James Beard sponsored entrepreneurs, our presenting companies Nicks and Tacombi, as well as the 20+ additional food and beverage brands. In addition, the Great Hall featured another 15 beauty and wellness brands, all showcasing products designed to make everyone look and feel better.
While here we were not able to mention by name all of the participating companies, we encourage you to see the complete list of the brands at the show at Consensus Great Brands | Leading program for rising consumer brands and growth capital (greatbrandsshow.com). We will be updating this site with additional pictures from the event in the coming days, and we will remind you to check back as updates are made. The Consensus team will also be meeting this week to evaluate our collective show experiences and follow-up opportunities resulting from our tenth event, and we welcome your feedback. Of course, we’ve already started thinking about the next Consensus Great Brands Show, and we are happy to hear your suggestions for that as well.
Headlines of the Week
JM Smucker to buy Twinkies manufacturer Hostess Brands for $5.6B
M. Smucker is buying Hostess Brands for about $5.6 billion as the maker of Uncrustables and its namesake jams deepens its presence in growing categories and consumer occasions focused on convenience. Hostess is being purchased for $34.25 per share in cash and stock. The deal, which is expected to close in Smucker’s fiscal third quarter ending in January, will allow the Ohio company to add to its portfolio iconic sweet brands such as Twinkies and Donettes. For Hostess, it marks a startling turnabout for a storied company that just over a decade ago was on the verge of going out of business following two bankruptcies. In recent years, it has been a beneficiary of consumer demand for indulgent snacking, recognizable brands and innovation.
Birkenstock files for IPO as it eyes global growth
Birkenstock filed a registration statement with the U.S. Securities and Exchange Commission for a proposed initial public offering, according to a company press release Tuesday. The number of ordinary shares to be sold and the price range for the proposed offering have not been determined. The company intends to list on the New York Stock Exchange using the ticker symbol BIRK. During its 2022 fiscal year, Birkenstock generated 1.24 billion euros (about $1.33 billion as of press time) in revenue and a net profit of 187.1 million euros, according to its filing. Birkenstock will be a controlled company following the completion of its IPO, with private equity firm L Catterton controlling a majority of the combined voting power of its outstanding ordinary shares. L Catterton acquired a majority stake in Birkenstock in 2021 through affiliated entities, with the company joining the private equity firm’s portfolio of brands such as Ganni and Hanna Andersson. The company believes its vertically integrated manufacturing structure is a key differentiator. Birkenstock assembled 95% of its overall products and 100% of its footbeds within five owned factories across Germany, with certain component manufacturing supplemented in Portugal.
Apparel & Footwear
True Religion’s Growing Faith in International Expansion
True Religion is extending its international reach with a far-reaching expansion plan entailing a mix of freestanding and in-store shops in Asia, Africa and the Middle East. New markets will be India, Indonesia, South Korea, the Philippines, South Africa, Lebanon and Qatar, bringing True Religion to a total of 26 markets outside the U.S. Locations will open this fall in Mumbai, Jakarta, Manila and Johannesburg, and in spring 2024, in Shanghai, Beijing and Seoul. The disclosure this week follows True Religion’s announcement in March 2023 that the business would enter China by partnering with the Aurorae Group. “Global expansion into high growth markets, anchored by our expansion into China, remains a key strategy for us for the near future,” said Michael Buckley, True Religion’s chief executive officer. “Predominantly, it’s going to be freestanding stores,” ranging in size from 1,000 to 2,000 square feet. The freestanding overseas stores will be licensed, providing True Religion with a royalty stream, while retail operations in America, Canada and the U.K. are company-owned. Partners overseas include Samarth in India, Mitra Adiperkasa in Indonesia, the Aishti Group in Lebanon, Marcalec in Italy, and Corpus Callosum in South Africa.
Heydude to pay $1.95M to settle FTC charges
Shoe brand Heydude has agreed to settle charges with the Federal Trade Commission related to the suppression of negative reviews and violations of the organization’s Mail, Internet, or Telephone Order Merchandise Rule. The Crocs-owned brand will pay $1.95 million to the FTC in monetary relief, according to an FTC press release Monday. Heydude violated the FTC’s Mail, Internet, or Telephone Order Merchandise Rule between 2020 and 2022 by not issuing shipping delay notices, failing to cancel orders and issue prompt refunds after not issuing such notices, and issuing gift cards to consumers instead of refunds of the original payment for unshipped orders, per the FTC release. The $1.95 million in monetary relief is expected to be used to provide refunds to impacted consumers. If the proposed court order is approved, Heydude will also be required to publish all reviews it receives with limited exceptions, including reviews previously not published. The FTC said Heydude suppressed negative reviews, including “more than 80 percent of reviews that failed to provide four or more stars out of a possible five.”
Parent company of Altar’d State to close all stores — all day — on Christmas Eve
Christmas Eve typically brings a surge of last-minute shoppers to stores. But that won’t happen at one national retailer this year. Stand Out For Good, parent company of women’s fashion brand Altar’d State, said it will close all its stores all day on December 24 this year. Although the down-to-the-wire shopping surge makes Christmas Eve one of Stand Out For Good’s busiest days, the company said the importance of associates spending quality time with family outweighs financial gain. Altar’d State has gained a reputation for its philanthropic efforts and community engagement as a giveback-focused company. Closing its stores on Christmas Eve further exemplifies the brand’s dedication to making a positive impact, not only on its giveback partners and customer experience but also on its employees, the company said. In addition to 118 Altar’d State stores, Stand Out For Good operates 32 Arula boutiques, 10 Vow’d boutiques, seven Tullabee boutiques and nine AS Revival stores in 38 states. All stores will remain closed through the Christmas holiday, reopening on December 26.
Athletic & Sporting Goods
New Era Preparing for Initial Public Offering
New Era Cap, LLC is reportedly talking to law firms and investment banks as part of a plan to go public next year, according to Reuters. The IPO comes after fourth-generation company leader Chris Koch stepped down last fall from daily operations as private equity firms bought a significant stake in the headwear manufacturer. The IPO could value Buffalo-based New Era in the range of $4 billion to $5 billion. The Koch family has privately owned New Era since its founding in 1920, with the family remaining majority shareholder. New Era’s earnings before interest, taxes, depreciation, and amortization (EBITDA) may reach or surpass $300 million in 2023, Reuters added. New Era generated more than $1 billion in revenue in 2022, according to Bloomberg.
Pure Hockey Acquires North Georgia Hockey
Pure Hockey acquired North Georgia Hockey, located in Roswell, GA. The hockey specialty retailer said the acquisition marks its first entry into the Georgia market and underscores its commitment to serving hockey players in the U.S. With the acquisition, Pure Hockey operates over 70 retail locations across 23 states, further solidifying its position as a destination for hockey players, coaches and fans.
August Retail Sales Growth Moderates; Sporting Goods Trends Down
The U.S. Census Bureau reported Thursday that overall U.S. retail sales in August were up 0.6 percent month-over-month from July and up 2.5 percent year-over-year versus the comparable month in 2022. The August year-over-year trend moderated from the 2.6 percent posted in the July year-over-year trend. The month-over-month trend accelerated compared to July, which had increased 0.5 percent month-over-month. On a yearly basis, the Census Bureau’s report for August saw sales up in five out of nine retail categories led by health and personal care stores, online sales and clothing and accessory stores, and up in all but two categories on a monthly basis. Sporting goods stores were down 1.6 percent month-over-month seasonally-adjusted and down 1.6 percent unadjusted year-over-year.
Cosmetics & Pharmacy
Sephora North America Names New President & Future CEO
Sephora North America has named Artemis Patrick as its president, effective October 2. Patrick succeeds Jean-André Rougeot, the current president and CEO, who has announced plans to retire next April. At that time, Patrick, who is currently Sephora’s global chief merchandising officer, will succeed him as CEO of Sephora North America—making her the first woman to lead the LVMH Moët Hennessy Louis Vuitton-owned retailer. In her new role, Patrick will report to Guillaume Motte, president and CEO of Sephora’s global business.
Natura &Co raises US$1 billion in Sustainability-Linked Notes
Natura&Co, which includes the Avon, Natura, The Body Shop and Aesop brands, concluded an international fundraising of US$1 billion in bonds linked to sustainability goals (“ESG Bond”). The issue was carried out by its subsidiary, Natura Cosméticos S.A. (“Natura”), with Natura & Co Holding S.A. acting as the guarantor. The offer was the single largest Sustainability Linked Bond issuance to date in Latin America. Since 2007, Natura has been a carbon neutral company. In addition, the company has also been making a series of efforts to reduce its relative emissions, which fell 33% between 2007 and 2013, and an additional 11% through 2020. The transaction commits Natura to meet two environmental performance indicators by 2026 year-end: i) reducing scopes 1, 2 and 3 of relative greenhouse gas (“GHG”) emissions intensity by another 13%, and ii) reaching 25% of post-consumer recycled (“PCR”) plastic in plastic product packaging.
Discounters & Department Stores
Nordstrom shuffles leadership, again
Among a flurry of leadership announcements, Nordstrom appointed Jamie Nordstrom as the company’s chief merchandising officer. Jamie Nordstrom previously was the company’s chief stores officer and is cousin of CEO Erik Nordstrom and President and Chief Brand Officer Pete Nordstrom. Gemma Lionello was named president of Nordstrom Rack, according to a company press release. Lionello was most recently the senior vice president and regional manager of Nordstrom’s Northeast region. Fanya Chandler was appointed president of Nordstrom stores. She most recently was the senior vice president and regional manager of the department store’s Southwest region.
Walmart CEO talks consumer spending, inflation predictions
Grocery inflation is on track to continue coming down during the coming months, but food prices are unlikely to return to their levels from two years ago, Walmart President and CEO Doug McMillon said Tuesday during Goldman Sachs’ 30th annual Global Retailing Conference. “Inflation and higher prices are kind of with us. We’ll see disinflation, but not all the way back to deflation … certainly not in the short term,” McMillon said, adding that he would like to have lower prices faster for consumers. “What we’ve seen over the last few years has resulted in dry grocery/consumables having a pretty big two-year stack inflation number and that’s coming down a little bit but not a lot,” McMillon said.
Macy’s taps international department store veteran as Bloomingdale’s CEO
To replace Bloomingdale’s longtime CEO Tony Spring, who is taking over from Jeff Gennette as chief executive of Macy’s, the company on Tuesday said it’s found a department store veteran from overseas. Olivier Bron, who will start sometime in early November, most recently was CEO of Central Group’s Central and Robinson Department Stores in Thailand. Before that he was chief operating officer and director of strategy at Galeries Lafayette in Paris. Bron, who is moving to New York City for the job, will lead Bloomingdale’s overall strategy, reporting to Spring, according to a Macy’s press release.
Target partners with Kendra Scott in time for the holidays
Target and Kendra Scott on Tuesday announced a collaboration on affordable jewelry and accessories that will be sold online and in select Target stores starting Oct. 22. Prices will start at $15, with most under $40. The more than 200 “Kendra Scott at Target” pieces will include newly designed items exclusive to Target, including necklaces, rings and earrings, as well as ring dishes and jewelry storage. They will include genuine stones, 14K gold over brass and other quality metals. The partnership is not a limited edition. Target and Kendra Scott will refresh the collection “multiple times each year with a number of items that will carry forward from season to season,” according to their press release.
Emerging Consumer Companies
Japanese snack startup Bokksu acquires competitor Japan Crate
Japanese snack startup Bokksu has acquired its competitor, Japan Crate, in a deal whose terms were not disclosed. The acquisition will allow Bokksu to expand its retail distribution significantly, as Japan Crate sells its products through over 5,000 locations, including World Market, Hot Topic, and FYE. Bokksu, which is known for its Japanese snack subscription boxes, aims to position itself as more of a membership model rather than a subscription service. The acquisition aligns with Bokksu’s goal of developing a greater variety of services and offerings. Bokksu CEO Danny Taing stated that the acquisition will provide immediate retail distribution, which the company has been trying to break into for the past seven years. Both Bokksu and Japan Crate will continue to operate as separate brands. Bokksu plans to integrate Japan Crate into its operations and revamp its supply chain. In early 2024, Bokksu intends to raise a Series B funding round.
AI reading coach startup Ello raises $15 million
Ello, an AI reading coach startup, has raised $15 million in Series A financing to support its mission of eradicating childhood illiteracy. The funding will be used for product development and expanding access to consumers. Ello is a subscription-based service that delivers five books every month to children from kindergarten through Grade 3. The app uses artificial intelligence and child speech recognition technology to listen to the child read out loud and provide feedback on mispronunciations and missed words. It also incorporates gamification mechanics to engage children and reward their progress. Ello aims to provide a learning experience that is enjoyable and doesn’t feel like a test. The company claims that its AI reading coach outperforms competitors in the market. Ello currently has 10,000 families using its app, with children having read over 300,000 books. In the future, Ello plans to partner with schools and develop a product specifically designed for classrooms. The company is also integrating generative AI into its app and testing versions of Ello in other languages. The funding round was led by Goodwater Capital and included participation from Reed Hastings, Common Sense Growth, Homebrew, and Ravensburger.
Bacardi acquires ILEGAL Mezcal
Bacardi Limited, the largest privately held international spirits company, has acquired ILEGAL Mezcal, a leading super premium artisanal mezcal brand. Bacardi has been in a successful partnership with ILEGAL since 2015 and aims to accelerate the brand’s growth within the fast-growing super premium mezcal category. The super premium plus mezcal category is expected to grow at a CAGR of 16% over the next five years, making it a lucrative market. The United States dominates the super premium mezcal category with an 86% global market share. Bacardi believes that ILEGAL has the potential to lead the super premium mezcal category globally. ILEGAL is known for its lifestyle branding and commitment to responsible and sustainable business practices. The brand works with fourth-generation maestros mezcaleros in Oaxaca, Mexico, and produces mezcal using 100% Espadin agave without any artificial colors, yeasts, flavors, or additives. John Rexer, the creator of ILEGAL, will continue to guide the brand’s vision. Bacardi’s acquisition of ILEGAL will help the brand reach a larger audience while maintaining its commitment to sustainability and responsible growth.
Food & Beverage
Molson Coors boosts its investment in Zoa Energy
Molson Coors Beverage Company is expanding its partnership with better-for-you energy drink brand Zoa. Financial terms of the expanded deal were not disclosed, but the increased funds will help Zoa more than double its investment in marketing in 2024, and fuel expanded distribution to international markets, it said. According to the beverage giant, the zero-sugar energy drink brand reported over $100 million in sales in 2022, with 138% year-over-year growth. The deal will further the beverage giant’s strategy, which began in 2019 when CEO Gavin Hattersley took control of the company, to overhaul its portfolio and expand beyond its beer roots through acquisitions and new product launches in other beverage categories.
PepsiCo to invest $175 million in Instacart
PepsiCo, Inc. recently took another step toward advancing its digital future with the disclosure it has agreed to purchase $175 million of Instacart’s Series A preferred convertible stock. The potential investment was disclosed as part of proposed initial public offering documents. Founded in 2012 “to bring the grocery industry online and help make grocery shopping effortless,” Instacart is partnered with more than 1,400 national, regional and local retail banners representing more than 85% of the US grocery market. Instacart generated approximately $29 billion of gross transaction value (GTV) in 2022, according to its SEC filing. PepsiCo’s decision to take a stake in Instacart comes as the company seeks to build out its digital capabilities. Ramon L. Laguarta, chairman and chief executive officer of PepsiCo, hinted at such a strategy in a July 13 conference call to discuss financial results, saying the company is focused on being a more intelligent company in a broader sense, “having better data, having better digitalization and execution capabilities.”
Grocery & Restaurants
McDonald’s advocacy group criticizes new California fast food bill
After California lawmakers passed a landmark fast-food bill, an independent advocacy group of McDonald’s owners is pushing back against what it says will be a “devastating financial blow” to its franchisees in the state, according to a memo to its membership viewed by CNBC. The bill, AB 1228, was passed by the state Senate late Thursday and heads to Gov. Gavin Newsom’s desk for signature. He has already pledged to sign the bill into law. It includes a wage floor of $20 for California workers at fast-food chains with at least 60 locations nationwide, starting April 1. Labor groups pushed for even higher wages in previous legislation, but the resulting $20 an hour floor prevailed. Even in a state where the minimum wage is $15.50 and the pay floor is even higher in some municipalities, the deal will bring a significant raise for many workers. But despite support from franchisee and restaurant advocacy groups, some owners are concerned about what the bill means for operations in a challenging labor market and during a period of high inflation. The National Owners Association, an independent advocacy group of more than 1,000 McDonald’s owners, projects in the memo the bill will cost each restaurant in the state $250,000 annually. The group said the costs “simply cannot be absorbed by the business model.” It also warned similar legislation will follow in other states.
Home & Road
GigaCloud named stalking horse for bankrupt furniture maker and retailer
End-to-end B2B e-commerce solutions provider GigaCloud Technology announced that it has entered into a definitive agreement as the stalking horse bidder to acquire substantially all of the assets of Noble House Home Furnishings and certain of its affiliates for $85 million in connection with Noble House’s Chapter 11 bankruptcy proceedings. Noble House is a distributor, manufacturer and retailer of indoor and outdoor home furnishings with distribution throughout e-commerce channels including partners such as Amazon, WalMart, Costco, Wayfair, Overstock, Target and Home Depot, fulfilling direct to consumer orders from its distribution centers. Family-owned since its founding in 1992, the company designs, markets and sells products under several brands including Christopher Knight Home, NobleHouse, LePouf, OkiOki, Best Selling and GDFStudio, and it leases offices, warehouses and other sites in Texas, California, and Georgia.
New owner promises to bring energy, ideas to DTC retailer HomeThreads
Offering to “add high-octane fuel based on what I know and do,” Antoine Grant, who took over as owner and CEO of online furniture and home furnishings retailer HomeThreads in May, is looking to take the company to the next level, including with an offline strategy. “HomeThreads presented me with a lot of great raw material,” said Grant. “Our goal is to revolutionize home design through technology and to meet customers where they are.” Grant, who at one point oversaw Wayfair’s $1 billion plumbing, vanities and hardware businesses, said he has always loved the home space and is now using the logistics, consumer and business development experience gained at the major online retailer and elsewhere at HomeThreads.
Jewelry & Luxury
De Beers to Spend $20 Million Promoting Natural Diamonds This Holiday
De Beers will spend $20 million promoting natural diamonds this holiday—in a campaign that marks the return of both its celebrated “A Diamond Is Forever” slogan and its “Seize the Day” advertising. “This obviously is a very challenging time,” says De Beers chief brand officer David Prager, who blamed macroeconomic factors for the industry’s downturn. “We wanted to create a campaign that was category-supportive. So what you will see, for the first time in many years, is a De Beers-led category campaign.” The company is resurrecting “Seize the Day,” the male-oriented “call to action” positioning that De Beers ran for the holidays in the late 1990s and 2000s.
American Exchange Group Buys Danecraft
American Exchange Group—which owns watch and jewelry brands Kendall & Kylie, Alexis Bendel, and Ed Hardy—has acquired Danecraft and its Primavera Italy brand. No financial details were released. Danecraft was founded by the Primavera family in 1934 in Providence, R.I. Its product is sold by such retailers as Macy’s, Kohl’s, Belk, and J.C. Penney. American Exchange said in a statement that it plans to formulate “a holistic marketing and sales blueprint for Danecraft product and the Primavera Italy brand, while simultaneously launching direct-to-consumer channels.”
LVMH, Gucci to expand in India with new outlets in Reliance’s luxury mall
Gucci, Cartier and Louis Vuitton are among brands to sign leases for stores in Indian tycoon Mukesh Ambani’s new Mumbai mall, as luxury firms and Reliance Industries seek to profit from strong economic growth and a rapid rise in the number of millionaires. The Jio World Plaza, which an industry source said is likely to open this year, is located inside Reliance’s $1 billion business and cultural hub in Mumbai’s business district. Reliance has yet to disclose details about the tenants, but lease documents provided by real estate analytics firm CRE Matrix showed that Burberry Group as well as several brands owned by LVMH, Kering and Richemont have agreed to rent shops in the mall, and also share between 4% and 12% of their monthly net revenue with Reliance.
Office & Leisure
MGM cyberattack continues to create chaos for Vegas operations; SEC notified
MGM Resorts International in Nevada confirmed a recent cyberattack in a Wednesday filing with the Securities and Exchange Commission (SEC). The Las Vegas-based company experienced a computer system outage on Monday that affected operations at headquarters as well as its properties and websites. “MGM Resorts recently identified a cybersecurity issue affecting certain of the company’s systems,” an MGM spokesperson said in a statement. “Promptly after detecting the issue, we began an investigation with assistance from leading external cybersecurity experts. We also notified law enforcement and are taking steps to protect our systems and data, including shutting down certain systems. ” On Monday, one of the company’s properties, the Bellagio Las Vegas, confirmed that the computer systems were down at all resorts and that all computer-based operations were forced to go manual. When visiting mgmresorts.com, a page comes up that says, “The MGM Resorts website is currently unavailable,” followed by an apology as well as numbers to make reservations, reach out to member services or call a concierge. On social media, the company posted a statement about the technical issues the company is facing. The company operates 19 resorts with more than 40,000 rooms around the world, including the MGM Grand, Mandalay Bay, Luxor and New York-New York in Las Vegas as well as the Borgata in Atlantic City, New Jersey, and more.
Threadless brings digital apparel designs to Roblox
Joining a long list of collaborators, intellectual property licensing platform Spaceport and e-commerce company Threadless have introduced Threadless T-shirts and apparel on Roblox, the companies announced in a press release Thursday. With the in-game currency Robux, players can buy the digital clothing in the Roblox Marketplace and wear the attire on their digital avatars across every experience within the game. The launch includes hundreds of real-life designs from Threadless artists and is one of the largest branded collections on Roblox, according to the release. Threadless artists will receive royalties paid out in U.S. dollars. Retail experiences and product integrations within Roblox have soared as the platform has gained steam. In addition to Threadless, Roblox has partnered with a full roster of companies over the past year or so, including Foot Locker, Forever 21, Walmart, Shipt, Gucci and Vans. In its Q2 2023 quarterly results, Roblox reported a 15% jump in revenue year over year to $680.8 million. As the platform has attracted more brands and retailers, it has also grown its user base. Per its second quarter results in August, it reported a 25% increase in daily active users from last year, reaching 65.5 million.
Joann undergoes restructuring, layoffs
Craft retailer Joann on Wednesday announced changes to its corporate structure that resulted in the elimination of some positions “from various departments.” In a statement to Retail Dive, the company said that over the “past few months” it has restructured both its field and corporate operations “to more closely align our expense and corporate structure to the needs of the business.” The company declined to say how many people were let go or to provide information on any severance payment arrangements. The retailer did not specify what departments the impacted employees worked in. News of the restructuring and layoffs comes a few months after the retailer’s CEO retired and about two weeks after the retailer reported its Q2 earnings. Last quarter, e-commerce sales rose 3%, and gross profit of $232 million was up 8%, but Joann’s net sales for the quarter fell 2.1% to $453.8 million year over year. The craft retailer “has been exploring every opportunity to improve profitability, drive top-line growth and operate the business more efficiently,” a spokesperson said in an emailed statement to Retail Dive.
Technology & Internet
The TikTok Shop rolls out in the US
TikTok users in the US can now buy stuff directly in the TikTok app as the company rolls out TikTok Shop, its online marketplace that’s already live in the UK. With this change, brands and creators alike can sell directly to you in their videos — and it may even be fulfilled by TikTok itself. The change isn’t immediately obvious when you open the app, but now, when you search for something, a new Shop tab can show you related items. You may also notice certain videos now have a button labeled “Shop” just above an account’s name — tapping that will let you buy whatever it is the video is hawking. Whether this will be annoying is up in the air. Along with the marketplace, TikTok also has a shiny new affiliate program that will let creators get commissions on products they sell in both videos and livestreams without needing to work out deals outside of TikTok itself. Creators have been pushing products with varying degrees of obnoxiousness on us for years in social media videos, and one wonders if cutting out the extra steps could supercharge that. TikTok also has its own fulfillment centers, so products can be stored and shipped by the company itself, just like Amazon.
Amazon announces Supply Chain by Amazon, which includes restocking physical stores
Amazon announced an expansion of its logistics network that will allow its selling partners to move their products in bulk from Amazon’s low-cost storage service, Amazon Warehousing Distribution (AWD), to any sales channel, including physical stores and warehouses, instead of only directly to consumers’ doorsteps. The new solution, called Multi-Channel Distribution (MCD), will allow sellers to replenish all their sales and fulfillment channels from a single inventory pool, Amazon explains, which simplifies supply chain management and allows for cost savings on inbound shipping. The solution also allows sellers to leverage Amazon’s investment in its distribution network and technology to maintain the right inventory levels across all their sales channels, including online and physical store locations, in order to grow their business.
Finance & Economy
Fears over access to credit hit highest level in more than a decade, New York Fed survey shows
American consumers are worried about access to credit amid persistently higher interest rates and tighter standards at banks, according to a New York Federal Reserve survey. Respondents indicating that the ability to get loans, credit cards and mortgages is harder now than it was a year ago rose to nearly 60%, the highest level in a data series that goes back to June 2013. The results were part of the New York Fed’s Survey of Consumer Expectations for August. Fears of credit access have been rising steadily since early 2022, around the same time that the Fed began raising interest rates. Since March of last year, the central bank has hiked its key borrowing rate 11 times totaling 5.25 percentage points as it seeks to tame inflation.
Retail sales pick up steam as consumers shell out more for gas
August retail sales were stronger than the prior month as consumers spent more on gas amid a surge in oil prices. Retail sales rose 0.6% in August from the previous month, above Wall Street’s estimates for 0.1% growth. Sales excluding auto and gas increased 0.2%, above estimates for a 0.1% decline compiled by Bloomberg. Meanwhile, July’s sales were revised down to a 0.5% uptick from a previously reported 0.7% increase. The August report, released by the Commerce Department, offers a snapshot of consumer spending at a time when economic data has been coming in largely stronger than expected despite the Federal Reserve’s interest rate hiking campaign as the central bank seeks to cool inflation.
