The Big Story

A Return to Fundamentals

Consensus

Earlier this month, Walmart announced that it was selling ModCloth, a digitally native women’s fashion brand, a little over two years since acquired the business. ModCloth sells clothing, footwear, bags, and jewelry, and targets the 18- to 35-year-old demographic.

News of the sale, which is expected to close later this year, comes after reports this summer of mounting losses in Walmart’s e-commerce unit, and increasing pressure on management to turn performance around. In addition to ModCloth, Bonobos and Eloquii, two other acquisitions made over the last two years, are said to be unprofitable. And Jetblack, the Walmart-launched personal-shopper service, is said to lose roughly $15,000 annually per member.

This small sample set suggests that acquiring and scaling digital-first businesses is more challenging than many believed, especially when it comes to attaining profitably. Perhaps most concerning, these brands haven’t been able to turn the corner even with the resources of the world’s largest retailer have been behind them. The question we’re left with is whether this is an issue specific to Walmart, or whether it’s a reflection of the broader landscape. Are these indications of the headwinds faced by other acquirers, or were these just not the right businesses or conditions for incubation?

Walmart made a splash with its acquisition of Jet.com and the arrival of Mark Lore to transform Walmart’s digital business. The acquisitions of Bonobos, ModCloth, and Eloquii weren’t easy to synthesize as a group or within Walmart – they weren’t selling low-priced items and targeting a mass audience. The deals did succeed in sending a message to the market that Walmart was interested in shaking up its tradition. It was a clear and decisive attempt to build its digital business and to compete with Amazon. A Walmart spokesperson noted “When we acquired ModCloth, our primary focus was to build assortment through proprietary, digitally-native brands.”

But recent strategic initiatives have yielded mixed results. Jet.com has helped propel Walmart’s online grocery business – Walmart is the largest grocer in the world and the company expects 80% of the U.S. population to be able to order products for curbside pickup by the end of the year. Walmart’s e-commerce unit, however, is on track to lose $1 billion this year.

The challenged growth and profitability led to a reevaluation of the businesses in the portfolio, and the action plan is now manifesting. The first sign is the sale of ModCloth to Go Global, a brand investment company. Terms of the deal were not disclosed. The second sign is the layoffs at Bonobos last week – a few dozen of the roughly 600 employees. Grumblings about Jetblack are growing.

All indications are that profitability will be far more important than it has been. The company has said that it will focus more on incubating its own brands – brands like Allswell, the mattress and home goods business that Walmart launched in 2018. While launched online, Allswell can be sold in Walmart stores – unlike Bonobos, ModCloth, and Eloquii, which never made it to walmart.com or Walmart stores. This follows the path of Target, which has successfully introduced and grown private label brands such as Cat & Jack, a children’s apparel brand, and Threshold, a home goods business.

 

ModCloth will operate as a standalone brand with Go Global. The company expects that its “team of experienced retail and brand practitioners will supplement existing management in areas of digital strategy, supply chain and operations.” It will remain focused on ModCloth’s core customers. In other words, back to basics – no reliance on tangential infrastructure or resources, and instead the simple but difficult task of building an independent business expected to stand on its merits. Go Global’s approach may be different than that of Walmart’s, but the challenges of growth and profitability remain the same.

 

 

 

Headlines of the Week

Target is going to power Toys R Us’ new website

You’ll be able to shop at Toys R Us online again — thanks to a little help from Target. Target announced on Tuesday that it’s partnering with the parent company of the Toys R Us brand, TRU Kids, to help it relaunch ToysRUs.com. The deal will allow Toys R Us to once again have an online presence, post bankruptcy, as it simultaneously begins to open Toys R Us stores in the U.S. again. And it could also be a huge boost to Target’s already-strong toy business ahead of this holiday season. Starting Tuesday, shoppers who visit ToysRUs.com to buy the latest L.O.L. Surprise! dolls or Hot Wheels cars will be redirected to Target.com, to complete the purchase, once they select “buy.” The companies declined to comment on how much of each sale goes to Target versus TRU Kids.

Shiseido to acquire Drunk Elephant

There’s a new brand joining the Shiseido family. The Tokyo-based company announced that its Shiseido Americas subsidiary has signed a definitive agreement to acquire the Drunk Elephant brand. Known for its clean compatible and effective products, Drunk Elephant was founded in 2012 by Tiffany Masterson. Since then, the brand has gone on to create cross-generational products for all skin types, and curated an assortment of hero products that use biocompatible ingredients. The transaction will allow Tiffany Masterson to continue on as the brand’s chief creative officer and assume the role of president.

 

 

Apparel & Footwear

Allbirds, a shoe brand born online, to double stores

Online shoe brand Allbirds plans to more than double its store count next year, hoping to reach shoppers who want to touch and try on its wool shoes. The company said Tuesday that it plans to open 20 stores in 2020, bringing its total number of stores to about 35 by the end of the year. While many mall-based retailers are closing locations, online startups like mattress seller Casper and men’s clothing brand Untuckit are expanding into brick-and-mortar stores. Allbirds said it can’t ignore stores since most footwear sales are still happening there. Plus, the staff in stores can explain the unusual materials used in its shoes, such as wool, tree fiber and sugar cane. Founded five years ago, Allbirds’s shoes have found their way onto the feet of tech CEOs and movie stars. Allbirds said all its U.S. stores have been profitable within two months of opening.

H&M raises its secondhand bet: takes majority stake in Sellpy

H&M raises stake in Sellpy. The company, that started investing in the Swedish secondhand platform in 2015, has taken a majority stake in the company with around 70%. Since 2015, Co:Lab, H&M’s investing arm, has participated in all the financing rounds of the company, with an accumulative investment of 5 million dollars. Recently, H&M has also acquired a new pack of shares for 9.2 million dollars and has injected other 4 million dollars. The company has also stated in a press release that it is planning to invest another 6 million dollars in two financing rounds in the “next couple of years”.  This will raise their stake up to 74%.  “Sellpy has a unique circular business model, which perfectly aligns with H&M Group’s vision to become fully circular,” stated Nanna Andersen, Head of Co:Lab.

Levi Strauss’s 3Q profits drop 4.1%

Levi Strauss & Co. reported a 4.1% drop in third-quarter profits on Tuesday as the denim giant wrestles with a weak business at its wholesale accounts in the U.S. The earnings report comes eight months after Levi’s returned to the stock market amid increasing competition and a changing retail landscape. Under its CEO Chip Bergh, the San Francisco company has been refashioning its brand and further expanding online. It’s also been juggling between selling to low-end and high-end stores. Recently, it expanded a test with discounter Target Corp. It’s also further expanding outside of the U.S. During a phone interview with The Associated Press Tuesday, Bergh acknowledged that sales at traditional department stores continue to be weak but he pointed to a strong online business. “Our strategy to diversify is working,” said Bergh. “The Levi’s brand is hot.”

Rent the Runway ‘back to business as usual’ following supply chain meltdown

Rent the Runway announced that fulfillment operations are back to normal and that it is once again accepting new subscribers and orders, according to a company statement. The retailer said that system upgrades, which were initially expected to be finished by Oct. 15, were completed ahead of schedule. The initial disruption was caused by “unforeseen issues associated with a significant transformation that we are executing in our fulfillment operation,” according to the company. According to Rent the Runway’s corporate blog The Shift, its fulfillment operations began experiencing delays Sept. 13 while in the process of upgrading its warehouse system. In an email to customers dated Sept. 20, Rent the Runway’s CEO Jennifer Hyman said the retailer’s “operational transformations” would ultimately improve the overall customer experience, inventory availability and access to its unlimited subscription service offering, once the current mistakes were worked out. Rent the Runway’s value proposition to deliver high-quality designer wear for time-sensitive special events requires a fast and efficient supply chain.

 

Athletic & Sporting Goods

JackRabbit acquires Maine-based Olympia Sports

Forty-four years after opening its first store in The Maine Mall, regional retail sporting goods company Olympia Sports has been acquired.  Running and active lifestyle brand retailer JackRabbit announced its purchase of the Westbrook, Maine-headquartered business’ stores.  According to a release from JackRabbit, the deal consists of certain assets and liabilities, including Olympia’s online presence and brand.  JackRabbit will continue to operate the acquired stores under the Olympia Sports banner, according to a statement from company CEO Bill Kirkendall.  Olympia opened its first store in 1975 at The Maine Mall in South Portland. From there, it grew to more than 200 locations throughout the Northeast, Mid-Atlantic and Mid-West, with stores from Ohio and Virginia to Presque Isle.

China’s battle with the NBA could hurt Nike

An ongoing spat between the NBA and China could end up hurting Nike, which has ties to both the basketball organization and the region.  Greater China, which is a term generally used to refer to mainland China, Hong Kong, Macao and Taiwan, has been Nike’s fastest-growing region for over a year now, with the sneaker maker continuing to cite heightened momentum overseas for its Jordan brand and other gear.  Nike did $6.21 billion in sales in Greater China in fiscal 2019, up 24%, excluding currency, from the prior year, according to financial reports.

Under Armour accuses sportswear brand of copying logo

Hotsuit, a sportswear company focused on weight loss and sauna suits, has copied Under Armour’s logo, according to a lawsuit filed October 8.  Athletics company Under Armour accused Hotsuit of selling apparel under a “copycat” mark, in a claim filed at the US District Court for the District of Maryland.  According to the suit, Hotsuit’s use of the mark has already caused confusion and given it an “unfair boost in the marketplace at the expense” of both Under Armour and consumers.

Cosmetics & Pharmacy

Walgreens stores to act as hubs for e-commerce returns

In time for the holidays, Walgreens stores will become hubs for returns of online purchases. Starting in November, Walgreens will partner with FedEx to accept returns at its stores of purchases made from any e-tailer that has implemented FedEx returns technology. Any e-tailer using the FedEx returns technology platform can send their customer a return code via email that can be taken to a participating Walgreens location. From there, a store associate will print a return label in-store, eliminating the need for the customer to print a label at home or for retailers to include a return label in packages. Walgreens is part of the FedEx retail convenience network, which currently offers FedEx pickup and drop-off services at nearly 14,000 retail locations.

Sizing up the men’s grooming boom

Are men going to save the day? With sales of women’s beauty products relatively stagnant over the last few years, many industry officials are turning to the men’s grooming industry as a savior of sorts. In fact, many hope that increasing buzz on social media and elsewhere, a flurry of product introductions and more space on retail shelves, will continue to drive sales of men’s products and help retailers weather the storm in the women’s sections. So far, they are getting what they want. Industry statistics show that men’s grooming sales are growing by about 5% annually and the category is producing strong margins, thanks in large part to higher price points and the simple fact that most men do not pay close attention to prices when they shop for themselves. The global male grooming products market is estimated at $57.7 billion. By 2023, it could balloon to $78.6 billion.

 

Discounters & Department Stores

Walmart’s US president Greg Foran to depart, with Sam’s Club CEO John Furner taking over

Walmart said on October 10th that its president and CEO in the U.S., Greg Foran, is stepping down, to be replaced by the head of its wholesale Sam’s Club business, John Furner. Foran is leaving to become CEO at Air New Zealand Limited, the company said in a press release. The move will be effective on Nov. 1, Walmart said, while Foran will stay around with the retailer through Jan. 31 “to ensure a smooth transition.” “John has done a fantastic job at Sam’s Club, and he will continue the momentum we have in Walmart U.S.,” CEO Doug McMillon said in a statement.

Target taps Michael Fiddelke as CFO

Target announced on October 9th it’s named Michael Fiddelke as its next executive vice president and chief financial officer. It also said Chief Merchandising Officer Mark Tritton will resign — to take the CEO post at the embattled Bed Bath & Beyond. Fiddelke replaces Cathy Smith, who had already announced her intention to step down earlier this year. He moves into this role at a crucial time for Target, ahead of the upcoming holiday season. He has been at Target for more than 15 years, and most recently held the role of senior vice president of operations, the company said.

Macy’s inks deal with Potbelly for 4 in-store restaurants

For retailers, adding an in-store dining concept is a tactic that targets consumer love for experience-based shopping. Consumers are looking for more than just a store that sells their favorite products at the right prices. They want to have a memorable interaction with the store, too. The strategy also allows restaurant brands to explore alternative formats, access new consumer groups and expand to geographic territories that may have been too costly to launch a full-scale brick-and-mortar store in. For Macy’s, adding a restaurant partner may be an effort to help it cope with the ongoing downturn in conventional retail shopping. It recently reported plans to cut profit forecasts due to inventory oversupply and declining year-over-year foot traffic at its mall locations.

 

 

Emerging Consumer Companies

Natalist, emerging fertility brand, raises $5 million

Natalist, a Charleston, South Carolina-based women’s health company startup focused on fertility, announced it has raised $5 million from angel investors and venture capital firms, including Collaborative Fund, Cowboy Ventures, Fuel Capital, Rock Health, Katrina Lake, founder of online personal shopping service Stitch Fix, and John Doerr of Kleiner Perkins. The company is focused on science-backed conception essentials such as fertility tests and prenatal vitamins.

ROAM, makers of premium, customizable luggage, opens pop-up in Bloomingdales

New York City-based luggage brand, ROAM, is launching its first-ever retail store through a pop-up at Bloomingdales. The ROAM shop-in-shop officially opens this. Founded by the original team behind Tumi, ROAM claims to be the world’s first fully customizable premium luggage brand.

Maude launches beauty

Maude, the Brooklyn-based sexual wellness brand, has expanded beyond the bedroom into bath. The intimacy essentials business known for its minimalist and gender-neutral products has added bath salts, a coconut-milk bath, and compressed towels to its affordable luxury stable. This follows the recent launch of massage oil candles. Maude has raised $2 million to date in two rounds of funding.

 

 

Grocery & Restaurants

Slapfish draws Mac Haik investment

Slapfish, the fast-casual seafood brand, has drawn an investment from a Houston-based franchisee of First Watch, the company said Thursday. Huntington Beach, Calif.-based Slapfish said it had partnered with Houston-based Mac Haik Enterprises Ltd. to develop 30 or more Slapfish locations in Texas and Arkansas. Slapfish is known for sourcing sustainable seafood, both farmed and wild, and its menu features a variety of tacos, lobster rolls, sandwiches, salads and bowls. Slapfish has 23 units open California, Arizona, Florida, Indiana, Maryland, New Mexico, Oklahoma, Utah, Virginia and the District of Columbia.

 

One Group acquires Kona Grill

One Group Hospitality Inc. and its affiliates have completed the bankruptcy court purchase of Kona Grill Inc., the company said Monday. The One Group, parent to the STK steakhouse concept, acquired 24 Kona Grill domestic restaurants and franchise rights for one international location in Dubai, for $25 million in cash and assumed of working capital liabilities of about $11 million. Scottsdale, Ariz.-based Kona Grill casual-dining chain filed for bankruptcy protection April 30. One Group said the acquisition is expected to add $100 million in annual revenue and $23 million to $25 in adjusted EBITDA. One Group’s primary restaurant brand is the 19-unit STK concept.

 

Hain Celestial sells US brands Arrowhead Mills, SunSpire to Hometown Food Company

US food group Hain Celestial has sold domestic brands Arrowhead Mills and SunSpire to the private-equity-backed Hometown Food Company. Baking-to-breakfast brand Arrowhead Mills and SunSpire chocolates become the latest disposals made in the US by Hain Celestial, which is looking to accelerate sales from brands that stay within the business and improve the company’s profitability. Private-equity house Brynwood Partners created Hometown Food Company last year to house the assets it bought from local food business J.M. Smucker. It has agreed to pay a combined US$15m for Arrowhead Mills and SunSpire. The deal includes a manufacturing plant in Hereford in Texas.

 

Hershey shifting from ‘huge bets on innovation’ strategy

Hershey has adopted a start-up approach to product development under the leadership of Mary Beth West, a former Mondelez International executive who joined the company as chief growth officer in May 2017. A small entrepreneurial team at The Hershey Co. called The Garage is developing and incubating new brands. Another new way Hershey is approaching innovation is through investments in start-ups. In September, Hershey acquired One Brands, L.L.C., a maker of low-sugar, high-protein nutrition bars, for $397 million. Hershey continues to invest in new capabilities and business models to stay ahead of the rapidly evolving marketplace.

 

Home & Road

Target’s Chief Merchant To Lead Bed Bath & Beyond

Bed Bath & Beyond Inc. announced the appointment of Mark J. Tritton as president and chief executive officer (CEO) and as a member of its Board of Directors, effective November 4, 2019. He succeeds interim CEO, Mary A. Winston. Tritton has over 30 years of experience in the retail industry, including most recently as Executive Vice President and Chief Merchandising Officer at Target Corporation, where he was instrumental in transforming the omni-channel shopping experience. He has end-to-end retail industry experience in merchandising, design, manufacturing, marketing and distribution at some of the world’s leading iconic retailers and brands. In addition to Target, this includes Nordstrom, Inc., Timberland LLC and Nike, Inc.

What’s Driving Dinnerware Sales?

Dinnerware sales—a combination of casual and formal, which together account for 37 percent of tabletop sales—grew 1.7 percent in 2018, to $2.05 billion, according to HFN’s recent State of the Industry report. “As more people are cooking at home, averaging five out of seven meals, dining has become a more entertaining type experience with social media influencers driving this trend,” noted Laurie Gates, senior vice president of creative at Gibson Overseas,  when asked about what is driving growth in the category. “For millennials who may have grown up more on a fast-food experience, they are embracing cooking and sharing good times with their friends and close family. Now as they are married, having children and buying homes, they may not have the funds to go abroad looking for treasures from, let’s say the sooks of Marrakech, so they look for home products speaking to that exotic aesthetic. So, our challenge is responding to this trend in a way that cookware and dinnerware reflect those experiences.”

China’s mattress import share falls to 1% in August

Chinese mattress imports, already trending sharply downward, dropped again in August, giving China just a 1% share of the U.S. mattress import market that month, a new report says. Raymond James, an analyst firm which tracks the mattress industry in addition to several other industries, released the August mattress figures from the U.S. International Trade Commission. Its analysis of those figures is closely watched by bedding insiders. In its latest report, Raymond James noted that Chinese mattress imports in August were 7,068, a 99% decline from the year-earlier figures. That gave China a 1% share of the August mattress imports, a market it has dominated in recent years.

FrontRoom Furnishings going out of business

FrontRoom Furnishings, which began liquidating five of its six stores last month, now plans to go out of business completely. The retailer is closing all six central Ohio stores, including the showroom at 940 Polaris Parkway in Columbus, which was not initially included in the mix. It’s also selling all company-owned real estate. After much consideration, the FrontRoom executive team made the difficult decision to close the last remaining store in Columbus because the business model was no longer profitable for the firm,” said Tom Liddell, senior vice president and managing director for Planned Furniture Promotions, which is handling the going-out-of-business sale and assisting with the real estate marketing. Store-closing events at five locations have been under way since Sept. 2, while liquidation at the Polaris Parkway store will begin Oct. 12. The GOB sale is expected to wrap up in early December, Liddell said.

Jewelry & Luxury

Lightbox’s First Retail Partners: Bloomingdale’s and Reeds

Lightbox, De Beers’ lab-grown diamond brand, is selling its wares for the first time at brick-and-mortar stores. The brand’s long-awaited first retail trial will start Oct. 21 at Bloomingdale’s stores in New York City and San Francisco, as well as 30 Reeds Jewelers stores, primarily in the Southeast. Up until now, the diamonds, which are available in blue, pink, and white, in 1 ct. sizes and under, were sold only on the brand’s website. The Lightbox lab-growns will be sold as part of a freestanding unit in the retailers’ fashion jewelry section, says chief marketing officer Sally Morrison. The stores will also sell the brand on their e-commerce platforms.

Why luxury goods are so expensive in China

Luxury brands are finding success with streetwear among Chinese consumers — a move that has enabled them to charge higher prices. Louis Vuitton, Chanel, Hermès and Dior were among the top five brands listed under the “sneaker” hashtag on popular Chinese shopping app RED, according to Gartner L2′s “Luxury China: Streetwear Insight” report last month. The only other brand among the top five was Nike. “Luxury brands have supported their development of youth-oriented product categories like sneakers and streetwear items with innovative e-commerce models and celebrity-driven activations on relevant digital platforms,” said Danielle Bailey, managing vice president for APAC Research and Advisory at Gartner L2, in a press release.

Luxury stocks are soaring after Louis Vuitton beats sales forecasts despite Hong Kong protests

Luxury fashion brands soared on Thursday after LVMH, the parent company of Louis Vuitton and Moët, revealed its third-quarter sales were better than expected. LVMH reported a 19% rise in organic revenue from fashion and leather goods in the period, beating the 15% increase expected by Bloomberg’s analysts. The luxury goods titan’s overall revenue jumped 17%, contributing to a 16% rise for the first nine months of 2019. Sales across its other divisions — wines and spirits, perfumes and cosmetics, watches and jewelry, and selective retailing — rose in the first three quarters. LVMH often serves as a canary in the coal mine for how other fashion brands are performing. Investors sent its stock up 4.6% in morning trading — surpassing the 0.2% rise for France’s CAC 40 index — and drove shares in Hermes up 3.4%, Gucci-parent Kering up 5.3%, and Tiffany and Co. up 2.2%.

Tiffany removes ad over Hong Kong controversy

Iconic jeweler Tiffany & Co. deleted a tweet with an image of a Chinese model covering one eye after backlash over speculation the ad was a veiled statement of support for pro-democracy protesters in Hong Kong. Model Sun Feifei showed off a Tiffany ring while covering her right eye with her hand in the ad, which critics connected to a pose adopted by Hong Kong protesters after clashes with police left two women with eye injuries, reported AFP.

 

Office & Leisure

Away Rolls Out Soft-Side Luggage in a Quest to Gain More Market Share

Six months after raising $100 million, landing unicorn status (valued at $1.4 billion), the digitally native brand Away is looking to dominate the soft-side luggage market in the same way it became a household name in hard luggage. For the past four years, Away has built out a market for hard-side luggage with heavy content marketing, advertising and good old word-of-mouth. But now, Selena Kalvaria, svp of brand, said it’s time for Away to tackle the soft-side market and respond to consumer demand—of which she says, 50% of consumers prefer soft-side to hard-side. “[It took] a ton of time developing, and for us it was really about getting it right,” Kalvaria said. “This was a data- and customer feedback-driven decision, and we think our community will be excited to see it.” According to a Rakuten Intelligence report from October 2018, Away accounted for 16% of total luggage revenue, ahead of other brands like Samsonite at 11%. However, Samsonite still pulls ahead in terms of how much product it sells, and leads luggage makers by 7.9%.

Legos lying around? Toy maker tests way to recycle bricks

Lego is looking to keep its plastic bricks out of the trash. The Danish toymaker is testing a way for customers to ship their unwanted bricks back and get them into the hands of other kids. It said Tuesday that customers in the U.S. can print out a mailing label on its site, dump their used Lego bricks in a box and ship them off for free. Lego said the pieces will be cleaned, put in a box and given to Teach for America, a nonprofit that will donate them to classrooms across the United States. Lego said if the test is successful, it may expand the program beyond the U.S. next year. Lego, like other big brands, is looking to please customers worried about plastic’s impact on the environment.

Michaels completes crafting in-store package service

Shoppers at Michaels Stores have a new omnichannel activity to pursue. The retailer has completed a rollout of the UPS Access Point network to its more than 1,100 U.S. retail locations. This collaboration enables stores to offer one-stop package pickup and pre-labeled drop-off services aimed at e-commerce buyers and sellers. UPS is in the midst of expanding several new delivery services, including Access Point, this year in an effort to keep pace with FedEx and Amazon. This effort includes expanding the Access Point network to up to 12,000 additional locations across CVS Pharmacy, Michaels, and Advance Auto Parts stores.

Technology & Internet

Zulily launches price-comparison tool to combat Amazon and Walmart

Zulily, owned by Qurate Retail Group, is heads down in preparing for the holidays. The flash-sale site this week rolled out a new price-comparison tool on Zulily.com and its mobile app to get an early start. To better serve its deal-seeking shoppers, Zulily is testing its price-comparison feature. On its product detail pages, shoppers will see a badge that displays a “Best Price Promise.” If the same product can be found on Amazon.com or Walmart.com, its price on those retailers’ sites will be displayed next to Zulily’s price. The feature is available to all U.S. shoppers on Zulily.com and on its mobile app from Oct. 2-Dec. 19. The price feature is in a pilot phase and may be extended beyond Dec. 19.

 

Group Nine acquires PopSugar

Group Nine — the digital media company formed by the merger of Thrillist, NowThis, The Dodo and Seeker — just announced that it has reached an agreement to acquire women’s lifestyle publisher PopSugar. The financial terms of the deal were not disclosed, but The Wall Street Journal reports that it’s an all-stock transaction that values PopSugar at more than $300 million. PopSugar was founded by husband-and-wife Brian and Lisa Sugar in 2006, and previously raised $41 million in funding from Sequoia Capital and IVP. Group Nine, meanwhile, just announced a fresh $50 million in funding from its backers Discovery and IVP, which it said would be used to grow its commerce business and for strategic acquisitions.

 

Finance & Economy

U.S. wholesale prices hit 3-year low

September’s producer price index reading was significantly weaker than forecast. The index of wholesale goods and services came in well below expectations on both month-over-month and year-over-year metrics.  The overall headline reading fell to its lowest level in 3 years, while the core figure, which strips out volatile food and energy prices, reached its lowest level in 2 years. The weak reading on wholesale prices is the latest sign that inflation is not picking up and could provide more ammo for the Fed to cut U.S. interest rates this month.

Weekly mortgage refinances jump 10% as rates drop to the lowest level since August

An unexpected decline in mortgage interest rates had homeowners calling their lenders last week, looking to save money on their monthly payments.  Refinance demand surged, pushing total mortgage application volume up 5.2% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 69% higher than the same week one year ago, when interest rates were considerably higher.

U.S. consumer credit growth weakens a bit

Consumer borrowing growth weakened a bit in August, led by weaker credit card debt, according to Federal Reserve data. Total consumer credit increased $17.9 billion, or an annual growth rate of 5.2%. Borrowing was up $23 billion in July. Economists has been expecting a $18.2 billion gain, according to Econoday. The trend rate for 2019 had been closer to $16 billion.  With business investment weak, consumers are the key to the economic outlook.

 

 

 

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