Story of the Week
Key Fed inflation gauge at 2.2% in August, lower than expected
Inflation moved closer to the Federal Reserve’s target in August, easing the way for future interest rate cuts, the Commerce Department reported on Sep 27th. The personal consumption expenditures price index, a gauge the Fed focuses on to measure the cost of goods and services in the U.S. economy, rose 0.1% for the month, putting the 12-month inflation rate at 2.2%, down from 2.5% in July and the lowest since February 2021. The Fed targets inflation at 2% annually. Economists surveyed by Dow Jones had been expecting all-items PCE to rise 0.1% on the month and 2.3% from a year ago. Excluding food and energy, core PCE rose 0.1% in August and was up 2.7% from a year ago, the 12-month number 0.1 percentage point higher than July.
Apparel & Footwear
H&M Revenue Flat, Profits Sink in Q3
Revenue was flat in local currency terms and profits sank 30 percent in the third fiscal quarter at Hennes & Mauritz Group, with macro pressures and a chilly start to the summer taking their toll. The Stockholm-based group said that revenue was 60.89 billion Swedish kronor, or 5.38 billion euros at current exchange. Profit after tax was 2.31 billion Swedish kronor, or 203.7 million euros at current exchange. Operating profit was down 26 percent to 3.51 billion Swedish kronor, or 309.7 million euros, with adjusted operating margin broadly in line with the corresponding period last year. The company said that sales and administrative expenses increased by 1 percent in the period.
Salt Life retail stores to close in bankruptcy
Delta Apparel Inc., parent company of the Salt Life active apparel brand, was sold through a court sanctioned bankruptcy auction to brand management entity Iconix International and Hilco for $38.74 million on Sept. 16. The purchase includes the Salt Life brand and its related assets. Salt Life’s 28 retail stores in 10 states began liquidation sales on 9/20, Hilco said in a recent announcement. Hilco is also overseeing the sale of distribution center inventory and store fixtures and equipment. Iconix plans to pivot Salt Life to focus on e-commerce and wholesale. Delta Apparel filed for Chapter 11 on June 30 in bankruptcy court in Delaware. Court documents indicate the company reported $337.8 million in assets and $244.5 in debts. Court documents also show the company’s top five creditors were collectively owed over $29 million.
Stitch Fix expects return to growth in 2 years
Stitch Fix on Sep 24 said its Q4 net revenue fell 12.4% year over year to $319.6 million; accounting for an extra week in its fiscal year, net revenue fell 18.3%. Number of active clients declined by 613,000 — down 19.6% year over year and 4.7% from the previous quarter — to 2.5 million. Lower transportation costs helped push gross margin up 50 basis points to 44.6%. Net loss widened more than 27% to $36.5 million, according to financial filings. For full fiscal year 2024, net revenue fell 16% to $1.3 billion, as net loss narrowed 25% to $128.8 million. Net revenue per active client at the end of the period was up 4.5%, reaching $533 from $510 a year ago.
Athletic & Sporting Goods
Omega Fitness and Rainier Partners Acquire MDS Fitness Gyms in Wisconsin
Rainier Partners, a private equity firm investing in lower middle-market service businesses, and its portfolio company Omega Fitness announced the acquisition of 21 gyms in Wisconsin from MDS Fitness. Omega Fitness is an Anytime Fitness franchisee that was formed by combining businesses built by two franchise operators, Andy Gundlach and Russ Allen. Since Rainier’s partnership began, Omega has roughly doubled the number of gyms in its portfolio. The company is the second largest Anytime Fitness platform in the U.S., now with over 120 gyms in California, Florida, Illinois, Minnesota, and Wisconsin. The acquisition of MDS’s Wisconsin assets strengthens Omega’s position in the state and remains consistent with the company’s focus on establishing geographic density in select markets.
L Catterton Acquires Majority Stake in Solidcore Amid Pilates Boom
Private equity firm L Catterton has acquired a majority stake in Solidcore, the targeted strength training workout founded by serial fitness and wellness entrepreneur Anne Mahlum. The deal values the Pilates-inspired brand between $600 million and $700 million, according to Reuters, and follows an earlier report in May that Solidcore was exploring a sale. Solidcore is also preparing to open roughly 30 studios nationwide in 2025, ATN has learned.
Wellness platform EGYM secures $200M of growth capital
German healthtech company EGYM has raised approximately $200M of growth capital at a valuation of over $1B from L Catterton, a leading global consumer-focused investment firm, and Meritech Capital, a leading Silicon Valley technology-focused venture firm. The investment will support the continued expansion of the EGYM Wellpass corporate wellness network and further development of innovative digital solutions, smart strength equipment and tech-enabled products for data-driven and personalized training, allowing fitness club operators to deliver a distinctive experience to its members.
Cosmetics & Pharmacy
Christopher de Lapuente, CEO of Selective Retailing, Is Retiring From LVMH
Christopher de Lapuente, chairman and chief executive officer of the selective retailing division at LVMH Moët Hennessy Louis Vuitton, and a member of its executive committee, will retire on Oct. 31. Following de Lapuente’s departure, the CEOs of Sephora, DFS and Le Bon Marché will report to Stéphane Bianchi, LVMH group managing director. “Sephora has become five-times bigger since Chris took the helm. He also established a culture of performance within the organization, strengthening the pride of being a part of it. Chris’ leadership has fueled a passion for product innovation and for delivering enthusiastic service to customers. He has also trained teams that are ready to take over and continue to share these unique values.” LVMH’s selective retailing division, despite exposure to China in the duty-free channel, registered sales of 8.63 billion euros in the first half of 2024, up 3 percent in reported terms and 8 percent on an organic basis versus the same prior-year period.
Dermatologist-Developed Hair Care Brand SEEN Closes $9 Million Series A
SEEN, the award-winning haircare brand developed by Harvard-trained Dermatologist Dr. Iris Rubin, has closed a $9 million Series A funding. This investment will accelerate SEEN’s growth as the premier science-backed, clinically-proven beauty brand, which sits at the intersection of multiple billion-dollar markets, including haircare, sensitive skin, acne, eczema, dry scalp, and hair thinning. The round was fully subscribed, including a strong uptake from existing and new strategic investors. Participants include Mitch Rales, Co-Founder of Danaher Corporation; Somerville SPV, led by acclaimed investor Feroz Dewan; Sator Grove Holdings, a permanent capital investor; and George Mrkonic, a Board Director of Ulta Beauty, Inc.
Discounters & Department Stores
Walmart plots October sales event to compete with Target, Amazon
Walmart plans to launch its holiday shopping season “weeks earlier than previous years,” the company said in a Thursday press release. Its first Walmart Holiday Deals event will take place in-store and online from Oct. 8 through Oct. 13. Walmart+ members will get early access to shop the deals online and through the app starting at 12 a.m. EST on Oct. 8. The deals will open to everyone online and in the app at 12 p.m. EST on Oct. 8 and in stores at the local opening time on Oct. 9. The retailer said the early start is a response to how price-conscious consumers are shopping right now. The company cited a Bankrate survey that found nearly half of consumers will start their holiday shopping before Halloween.
Lulus partners with Dillard’s amid wholesale push
Lulus is expanding its wholesale operation via a strategic collaboration with regional department store Dillard’s, the companies said on Thursday. Special occasion and event collections from the California-based women’s apparel brand will be found at more than 30 Dillard’s stores, per a Lulus press release. The first collection is timed for homecoming events, and a prom collection is planned for early next year. Lulus CEO Crystal Landsem last month told analysts that the brand is adding wholesale partnerships, specifically with department stores, in a quest for growth.
Emerging Consumer Companies
Oak Essentials, beauty brand founded by Jenni Kayne, raises Series A
Jenni Kayne-founded natural skincare brand Oak Essentials has secured first-round dual funding from Silas Capital and Unilever Ventures to fuel the brand’s expansion, allowing for enhanced product development, increased marketing efforts, and broader distribution. In the three years since Oak Essentials’ inception, the brand has launched 26 products, initially focusing on skincare before successfully expanding into body care. Oak Essentials has sold over half a million products since launch, with over 8,300 5-star reviews across all offerings. The brand’s hero products, including the cult-classic Moisture Rich Balm, Ritual Oil, and Dew Body Oil, have been consistent best-sellers since the initial product launch.
Feno, smart toothbrush and oral care brand, raises $6 million
Feno, a Los Angeles, CA-based healthtech company which specializes in at-home oral health technology, raised $6M in Seed funding. The round was led by BOLD Capital Partners, True Ventures, Upfront Ventures, and Share Ventures. The company intends to use the funds to advance product development, scale manufacturing, and meet the demand for its flagship device. The Feno Smartbrush is an at-home dental device that combines 20-second full-mouth brushing with real-time AI-powered oral health insights.
Food & Beverage
Billionaire Patrón founder buys Waterloo gin
John Paul DeJoria, the billionaire founder of Patrón Tequila, is purchasing Waterloo Gin for an undisclosed amount. Waterloo, the first gin brand to be distilled in Texas, fuses fruits and botanicals in its flagship No. 9 Gin. It also sells Antique Gin aged for two years in white oak barrels to achieve a woody flavor. Many wealthy business executives have succeeded in the alcohol market by acquiring existing brands, including the Bronfman family and LVMH CEO Bernard Arnault.
Butterfly Announces $300 Million Dividend Recapitalization of Milk Specialties Global
Butterfly, a Los Angeles-based private equity firm specializing in the food sector, announced the successful closing of a $300 million second lien term loan facility issued by portfolio company Milk Specialties Global. GoldenTree Asset Management LP provided the Second Lien Term Loans for the transaction and the net proceeds thereof were used to complete a distribution to Milk Specialties shareholders. The Company’s preexisting first lien secured credit facility remains in place. Based in Eden Prairie, Minnesota, Milk Specialties is an industry-leading, vertically integrated ingredient manufacturer focused on the processing of raw dairy inputs, such as milk and liquid whey, into value-added functional ingredients for a variety of growing nutrition end markets.
Danone offers to buy kefir maker Lifeway Foods for $283M
Dairy giant Danone offered to buy the remaining stock it doesn’t already own in kefir products maker Lifeway Foods for about $283 million, or $25 a share, according to a regulatory filing. Danone, a long-time shareholder in Lifeway, currently owns 23.4% of its common shares. Danone said in a letter sent to Lifeway on Sep 23 that the offer “represents a compelling proposition to [its] shareholders and reflects the fundamental potential of the Company.” The $25-a-share offer is a 59% premium to $15.74, Lifeway’s average price during the last three months. Lifeway’s stock closed Sep 23 at $21.50 a share, giving it a market cap of $318 million.
Mondelēz buys majority stake in fast-growing Chinese cake and pastry maker
Mondelēz International is buying a “significant majority stake” in Evirth, a leading manufacturer of cakes and pastries in China, the snacking giant said in a statement. The ownership stake and financial terms were not disclosed. The Oreo and Ritz maker said the deal “represents an important step” to accelerate its growth in the cakes and pastries category. The segment is a core focus for the company, alongside chocolate and biscuits. Mondelēz already has a minority investment in Evirth to develop, manufacture and supply frozen-to-chilled cakes and pastries in China featuring some of its brands, including Oreo and Philadelphia.
Grocery & Restaurants
Wagamama acquires Conversion Venture Capital’s stake in its business
Wagamama, a casual-dining chain serving ramen and other Asian cuisine, announced on Thursday that it had acquired the remaining 80% of its joint venture partnership from Conversion Venture Capital (CVC2), thus taking full control of its U.S. operations. The joint venture with CVC2, which has been 80/20 since its inception, began in early 2020 as Wagamama was expanding in the U.S. The chain now has eight U.S. locations in New York City, Boston, Tampa, Fla., Dallas, and Arlington, Va. The Virginia location — which opened in August — is the latest. “The U.S. is an exciting growth market for Wagamama and we are looking forward to expanding our popular concept into new locations across the country,” Wagamama CEO Thomas Heier said in a statement.
PE firm Beach Point invests in New York Dunkin’ franchisee Metro
Private equity firm Beach Point Capital Management has invested in Dunkin’ franchisee Metro Franchising, the investor said Wednesday. The firm bought the equity from Quilvest Capital Partners. Metro Franchising was founded in 1988 and operates 105 Dunkin’ locations in the New York City metropolitan area, making it one of the largest franchisees in Dunkin’s system of more than 13,000 units globally. Metro’s co-founders, chief executive officer Stuart Cohen and president Paul Waltzer, will continue in their roles and remain shareholders of the business. Cohen said he was looking forward to continued growth thanks to the Beach Point investment. “The partnership with Beach Point represents a new chapter for Metro Franchising, and we are confident that with their support, we will be able to accelerate our growth locally and in new markets. Beach Point’s deep understanding of our business and the franchising landscape is exactly what we need to further our expansion goals,” he said.
Home & Road
Ikea Will Test Smaller Stores in China to Woo Cautious Shoppers
Ikea will add more smaller outlets across China, as the furniture giant known for sprawling big-box stores experiments with more accessible retail formats amid an economic slowdown and surging local competition. “We have learned a lot about how to meet customers,” Sara Del Fabbro, deputy retail manager of Ingka Group, Ikea’s largest franchisee, said in an interview in Shanghai. “Even if the wallets are smaller, the needs of people are the same and life at home is important.” She didn’t elaborate on specific plans or a timetable for the new outlets. Ikea began testing smaller formats in the cities of Xi’an and Shenzhen earlier this year. Shenzhen’s store has been designated a Plan and Order Point, which offers customers one-on-one advice on how to plan more complex orders, such as kitchens, before choosing home delivery or heading to a nearby collection point. At 300 square meters, the outlet is about one-tenth the size of Ikea’s sprawling traditional stores.
Surya CEO lays out plans for Mitchell Gold & Bob Williams
Before deciding to purchase Mitchell Gold + Bob Williams last year, Surya CEO Satya Tiwari walked the floor of the factory in Taylorsville, N.C. The former workplace, which at its peak employed nearly 700 workers and was a shining example of how progressive factory work can be, was eerily quiet. Nearly the entire workforce had suddenly found itself out of work in August 2023, when the company abruptly filed for bankruptcy. “We saw hundreds of people with nowhere to go,” Tiwari told an engrossed audience packed into the Global Views 200 Lex showroom during What’s New What’s Next last week. Mitchell Gold, who sat beside him during a panel discussion, added, “Satya’s focus is ‘How can we employ more people?’” If you employ more people, you make more money, Tiwari agreed. Now, 13 months later, Tiwari owns the brand, has brought some of the factory workers back, has been rebuilding the business with Gold’s help and is prepping introductions for next month’s High Point Market. He is also looking for his next acquisition (but more on that later).
Jewelry & Luxury
Kay Jewelers to revamp store fleet amid new brand positioning
Kay Jewelers is updating its brand to target the next generation of shoppers, including through new products, a fresh brand campaign and updates to its store footprint, the company said Tuesday in a press release. The company’s new brand positioning will focus on presenting authentic relationships. A new collection, Studio By Kay, will be available online and at select stores starting Oct. 28. It will offer more than 30 “fresh, luxurious designs that enhance everyday looks,” the company said. Prices for pieces in the collection, which includes stackable rings and hoop earrings, will range from $199 to $2,199. Kay’s store revamps, which will take place over this year and next, will include integrated technology and a dedicated customization and collaboration area that will enable the retailer to offer personalized, full-service experiences. The stores will be able to host wedding parties, friends and other groups.
Kendra Scott Eyes Network, Product Expansion Following New Investment
Investment firm 65 Equity Partners announced earlier this month that it has sunk money in Kendra Scott Design Inc. to help the popular jewelry brand expand into new categories and open more stores. The exact amount of the “significant” minority investment was not disclosed, though it was noted that the brand’s founder and namesake, Kendra Scott, will still hold a majority stake in the company. Under the terms of the transaction, she also will acquire a larger equity position than what she currently holds. HPS Investment Partners and Belzberg & Co. invested alongside 65 Equity Partners, while former investors Berkshire Partners and Norwest Venture Partners have had their preferred stock investments fully redeemed.
Office & Leisure
Party City cuts prices on 2K items ahead of the holidays
Party City has lowered prices on over 2,000 products ahead of the holiday season. The move has resulted in average savings of approximately 20% across impacted items, the company said in a Tuesday press release. Party City has reduced prices on tableware, kids’ birthday supplies, candy and latex balloons. The company said the move is an effort to make party goods more affordable. The price cuts began a few months ago and continued into last week with reductions to an additional 500 products on the cusp of “the busiest party hosting time of the year,” the company said.
Blue Buffalo Parent General Mills’ Pet Segment Sees Slight Sales Decline in Q1
Net sales for General Mills’ North America Pet segment were down 1 percent to $576 million in the first quarter 2025, which ended Aug. 25, driven by unfavorable net price realization and mix, partially offset by higher pound volume, company officials reported. Organic net sales were also down 1 percent. Beginning in fiscal 2025, General Mills renamed the former Pet segment to North America Pet, to reflect the fact that pet food results outside North America are captured in its international segment. This name change had no impact on prior-year operating segment results, officials reported.
Flutter to Repurchase up to $5B in Stock, Lifts Long-Term FanDuel Outlook
Flutter Entertainment introduced medium-term 2027 guidance on Sep 25th, forecasting better-than-expected growth in North America where its FanDuel unit dominates while telling investors it could repurchase up to $5 billion worth of its shares over the next several years. The Dublin-based gaming company sees the total addressable market for regulated global gross gaming revenue (GGR) swelling to $368 billion by 2030, representing a CAGR of 8%. At the midpoint of its 2027 US and rest of the world (ROW) guidance, Flutter forecast 2027 revenue of $21 billion, indicating a three-year CAGR of 14%. That would result in 2027 adjusted EBITDA of more than $5 billion with margin expansion of 700 basis points.
Technology & Internet
Meta unveils $299 Quest 3S VR headset, Orion AR glasses prototype
Meta announced the Quest 3S, the latest virtual reality headset to come out of the company’s Reality Labs division and a cheaper offering than its predecessor. The device will go on sale on Oct. 15, and it’ll retail starting at $299, down from the $499 starting price for 2023′s Quest 3. The device can be used to watch movies, as well as run VR fitness apps and gaming, Meta said Wednesday at its Connect event in Menlo Park, California. The company positioned the headset as a multitasking computer, putting it in competition with Apple’s $3,499 Vision Pro headset that launched in February. In addition to the Quest 3S, Meta on Wednesday also showcased its latest prototype of augmented-reality smart glasses and announced a flurry of new features for its Meta AI chatbot. Meta’s previous Quest devices are the bestselling VR headsets, with millions shipped thanks to heavy marketing and a lower price than many competitors, but those efforts have yet to spark a cultural phenomenon or a mainstream software ecosystem around VR. Including its acquisition of Oculus in 2014, Meta has poured more than $65 billion in expenses into its hardware efforts.
Finance & Economy
US economy grew at a solid 3% rate last quarter, government says in final estimate
The American economy expanded at a healthy 3% annual pace from April through June, boosted by strong consumer spending and business investment, the government said, leaving its previous estimate unchanged. The Commerce Department reported that the nation’s gross domestic product — the nation’s total output of goods and services — picked up sharply in the second quarter from the tepid 1.6% annual rate in the first three months of the year. Consumer spending, the primary driver of the economy, grew last quarter at a 2.8% pace, down slightly from the 2.9% rate the government had previously estimated. Business investment was also solid: It increased at a vigorous 8.3% annual pace last quarter, led by a 9.8% rise in investment in equipment.
Fed-Fueled Bonds on Track for Longest Run of Gains Since 2010
Treasuries are poised for their longest monthly winning streak in 14 years as traders bet on more half-point reductions in interest rates as the Federal Reserve aims for a rare soft landing. US government bonds have so far handed investors returns of 1.2% in September, set for a fifth month of gains that would be the longest run since 2010, according to the Bloomberg US Treasury Total Return Index. The gauge has been rallying since the end of April, extending this year’s gain to 3.8% — and its advance over the past 12 months to nearly 10%. “Bond markets, in particular, have delivered strong returns,” wrote AXA Investment Managers CIO of core investments Chris Iggo and chief economist Gilles Moec. Those gains are “reflecting the aggressive shift in central bank rate expectations.”
September consumer confidence falls the most in three years
Consumers’ view on the economy tumbled in September, falling by the largest level in more than three years as fears grew about jobs and business conditions, the Conference Board reported on Sep 24th. The board’s consumer confidence index slid to 98.7, down from 105.6 in August, the biggest one-month decline since August 2021. The Dow Jones consensus forecast was for a reading of 104. By contrast, the index had a reading of 132.6 in February 2020, a month before the Covid pandemic hit. Each of the five components the organization samples fared worse on the month, with the biggest fall coming among those aged 35-54 and earning less than $50,000. “Consumers’ assessments of current business conditions turned negative while views of the current labor market situation softened further.
