Since inception, digital-first brands have relied on data, tracking, and insight to reach consumers and to communicate in a more personal way. It has been critical for acquiring customers in a cost-effective manner and scaling these businesses. Over the years, digital-first brands have focused a large part of their advertising spend on third-party channels like Facebook, Instagram, and Google to market their products, build their brands, and drive traffic. The systems allowed brands to access a wealth of information about customers and prospective customers – from their interests to their spending patterns. This further enabled brands to actively market to these customers and to then evaluate user activity to measure the effectiveness of each ad.
In April 2021, as part of Apple’s iOS 14.5 update for iPhones and iPads, Apple introduced new privacy settings for users. As part of the update, Apple gave users the option to opt out of having their online activity tracked by apps. These apps now need to receive permission from users to track their data for marketing purposes. The new protocol, App Tracking Transparency, enables users to directly opt out. Before, users were automatically opted in. So, the default setting allowing apps to1) monitor consumer behavior, 2) share that data with third parties, and 3) enable brands to market products based on that information. But once the update was released, an estimated 96% of iPhone users decided to disable tracking.
The change gives users dramatically more control over their data – and dramatically less information to brands, as platforms like Google and Facebook are no longer able to use that data to identify the most promising prospective consumers. Apple states that the change was intended to give its users more control over how their data is being used. Online privacy advocates see that as a positive. It also means that it is now far more difficult for companies to run highly targeted ads, and for digital-first brands, that’s problematic.
While still early in evaluating the long-term impact, it has been widely felt. With the ability to target, track, and measure impeded, brands no longer have visibility into ad efficacy, making marketing spend less efficient and diminishing results. Return on ad spend has declined and acquisition costs have increased. Many digital-first brands have felt an immediate impact. They’ve experienced weakened performance firsthand – lower revenue, higher marketing costs, lower profitability – and directly attributed it to less effective Facebook and Instagram spend caused by the iOS 14.5 changes. Without the comprehensive data picture, brands are less informed and don’t have the same insights about their customers or their ad strategies.
The significance of the effects and the uncertainty over the future has led many digital-first brands to rethink plans and change their approach. Without the ability to measure the effectiveness of their ads, brands are switching to platforms and apps that provide more actionable insight. Many are shifting their focus and advertising dollars to other platforms (TikTok, YouTube, Pinterest) and channels (email, text, direct mail).
Already, the iOS changes are spurring innovation and accelerating a transition to what’s next – a movement to less reliance on Facebook, Instagram, and any one particular app or platform. That should create opportunity for digital-first brands moving forward – and ideally, more customer acquisition vehicles, lower customer acquisition costs, and better data.
Headlines of the Week
Last week, six-year old athleisure brand Vuori announced an investment by Softbank of $400 million at a valuation of $4 billion. In its most recent capital-raise prior to this transaction, Vuori was valued in 2019 at about $200 million when Norwest Venture Partners invested $45 million in the company. Obviously, the founders, shareholders and Norwest have a big win on their hands. There is very little public information on the financials of Vuori. But if you ask any ten people if they’ve heard of the brand, the odds are you will not get all ten saying yes. Because it’s a consumer brand, that’s an important indicator of the scale of the business. Those same ten people will have heard of Lululemon and other consumer businesses you know in the same market. Because Vuori has the potential for future growth that those brands don’t have, like opening stores and expanding awareness, it has higher growth potential than established brands. And based on the multiples we see right now for Lululemon, VF Corp. and others, you can make the multiples make sense on the deal. For management and ownership, it’s a transaction they have to do because it’s so economically compelling; it’s smart of them to do this deal.
Activist investor Jana Partners has taken a stake in Macy’s and sent a letter to the department store chain’s board on Wednesday urging it to separate its e-commerce business, a person familiar with the matter told CNBC. The person said Macy’s online business has already drawn interest from firms that would invest in it, in conjunction with a spinoff. Macy’s shares closed Thursday up nearly 3%, having risen more than 105% year to date. A representative from Macy’s declined to comment. Jana didn’t immediately respond to CNBC’s request for comment. In a presentation earlier this month, Jana said Macy’s online business could be worth about $14 billion, which is higher than $7 billion market value the department store currently has. Jana suggested the split at that time without saying anything about its stake in the department store operator.
Apparel & Footwear
Is Britain’s fast-fashion bubble about to burst? After watching sales soar during — and after — lockdown, fast-fashion retailer Asos saw its shares plunge 14 percent last Monday as it warned profit margins will be squeezed and sales forecasts bogged down by Brexit-related duty costs and broader supply chain issues linked to the aftermath of COVID-19. The company said full-year adjusted profit before taxes in fiscal 2022 is expected to be in the range of 110 million pounds to 140 million pounds, reflecting a variety of factors, including “notable cost headwinds, incremental inbound freight costs; Brexit duty annualization, outbound delivery costs and labor cost inflation.” Fast fashion isn’t the only sector feeling the heat, with supply chain woes hitting nearly every industrial and consumer sector due to post-COVID blockages at ports. The U.K. in particular is also seeing a spike in energy and labor costs as the country adjusts to the post-Brexit reality and tries to return to normal following the prolonged COVID-19-related lockdowns.
Poshmark, a leading social marketplace for new and secondhand styles for women, men, kids, pets, home, and more, announced that it has acquired Suede One, a platform that combines machine learning, computer vision, and expert human review to virtually authenticate sneakers. The Suede One team will join the Poshmark team, effective immediately. This deal marks Poshmark’s first acquisition and reflects the company’s focus on strategic investments that drive continued platform innovation, accelerate growth in high-growth resale categories and enhance the user experience to attract and retain both buyers and sellers. Founded in 2020, Suede One’s technology enables an inventoryless approach to authentication. The technology analyzes product images, running algorithms on consistencies to identify whether an item is real or counterfeit. For popular sneakers such as Jordan 1s and Yeezy 350s, Suede One can automatically authenticate the majority of submissions with greater than 99% accuracy, based on internal testing.
Lulu’s is joining the hoards of retailers going public this year. The online fast-fashion company, also known as Lulu’s Fashion Lounge Holdings, this week announced that it has filed a Form S-1 registration statement with the U.S. Securities and Exchange Commission. Lulu’s, which plans to list on the Nasdaq Global Market under the ticker “LVLU,” was expected to be in the black in its most recent quarter ended Oct. 3, with net income of $3.3 million, up substantially from $377,000 in net income in the year-ago period, per the S-1. But the e-retailer ended its last two fiscal years in the red, with net losses of $469,000 in 2019 and $19.3 million in 2020. Some may think that fast fashion is under intense pressure, in part due to younger consumers’ concerns about the environment and labor practices. Analysts at both UBS and Moody’s earlier this year warned that fast fashion companies will lose customers as sustainability and transparency grow in importance, and as resale and other apparel segments take advantage of the changing market dynamics. But companies like Lulu’s and Shein might beg to differ, and, in fact, Lulu’s pretty much does in its prospectus.
Athletic & Sporting Goods
Dorel Industries has agreed to sell Dorel Sports to Pon Holdings for $810 million in cash. Dorel Sports is the parent group of Cannondale, Schwinn, GT and Mongoose. Pon Holdings is the parent of many bike brands, including Cervélo, Santa Cruz, and Gazelle. Pon, a privately held Dutch group with businesses in several sectors, recently acquired the Mike’s Bikes retail chain in California. Dorel will retain its juvenile and furniture divisions and said it expects to use net proceeds to strengthen its balance sheet, return capital to shareholders and for general corporate purposes. The sale is expected to close before the end of the first quarter of 2022.
PEAR Sports has announced the acquisition of Aaptiv. Aaptiv is one of the most popular workout apps on the market, boasting nearly 13 million downloads and more than 36 million classes taken. Aaptiv is a natural fit with PEAR’s personalized, scientific approach to fitness and wellness digital coaching. The Aaptiv brand will continue operations and will benefit from the combined strengths of PEAR and Life Fitness. Life Fitness adds to its equity investment in PEAR and will distribute Aaptiv through its strategic sales and marketing partnership. Life Fitness is well positioned to grow the Aaptiv community through increased investment, and the company plans to deliver more immersive content and connected fitness experiences to Aaptiv users by integrating their equipment expertise.
With attendance to in-person fitness classes on the rebound, Mindbody said it will acquire ClassPass in an all-stock deal. Mindbody is often described as something akin to the OpenTable of the fitness world: Gyms and fitness studios use its backend software to help organize classes and bookings. ClassPass, on the other hand, is used by consumers to sign up for workout classes on a subscription basis. More recently, ClassPass has expanded to work with beauty salons and other wellness providers. Financial terms were not disclosed. However, Axios reported that Mindbody will hold between a 60% to 70% stake in the combined business. Before the pandemic, ClassPass had been valued at more than $1 billion. While in 2019, Mindbody was taken private in a $1.9 billion buyout by Vista Equity.
Cosmetics & Pharmacy
Highlander Partners has announced the acquisition of RMS Beauty for an undisclosed sum. David Olsen, Managing Director of the Dallas-based private equity firm, will assume the role of CEO at RMS Beauty, effective immediately while Elaine Sack will move to a Chief Strategic Officer role. “Like [Founder] Rose-Marie herself, the RMS brand is unique,” said Olsen. “It was the prescient first-mover in clean beauty and continues to push the industry with its formulation standards. Yet it also creates the highest quality and most effective products, as you’d expect from a master makeup artist. With these attributes, RMS has an opportunity to scale considerably. We intend to revamp the brand, strengthen and expand RMS’ extensive retail relationships, drive the DTC business, and enhance and broaden the product assortment.” Jeff L. Hull, President and CEO of Highlander Partners, noted, “We have been exploring the beauty and personal care category in a meaningful way for the past two to three years. All of our efforts in assessing the beauty industry have led to an ideal investment with RMS. We believe RMS is the pioneer and leader in clean beauty and has significant growth opportunities, while also giving us optionality to create a larger clean beauty platform. It is our intention to continue to grow in this category through additional acquisitions.”
iNNBeauty Project, an effective, clean, and accessible skincare brand, announced the closing of a minority investment led by leading consumer investors Strand Equity and Beechwood Capital. Funds will be allocated towards growing the brand and supporting its nationwide launch in Sephora. Terms of the transaction were not disclosed. iNNBeauty Project represents the culmination of over 30 years of combined experience from its co-founders, Alisa Metzger and Jen Shane. Shane’s products have won over 20 beauty industry awards including Allure Best of Beauty Hall of Fame. While at Tula, Shane met Metzger, who led the brand’s marketing team and helped launch the brand nationwide at ULTA Beauty in over 1,200 stores. In 2019, the two joined forces to launch iNNBeauty Project after identifying a void in the beauty space for clean and efficacious skincare that was affordable to younger consumers. Consumers responded, fueling iNNBeauty Project towards 300% year-over-year growth and gaining the attention of Sephora. Now available in all 490 Sephora stores, 200 Sephora x Kohl’s stores and Sephora online, iNNBeauty Project seeks to continue its meteoric rise.
BRANDED Group, a leading consumer goods e-commerce company, announced the full acquisition of Puracy, a leader in plant-based natural cleaning and personal care products. BRANDED acquires and partners with top performing entrepreneurs and businesses to transform them into global consumer brands. Puracy was founded in 2013 with the mission to provide effective, natural products to clean and care for the home while helping all families to feel secure in the products they are using around themselves and their loved ones. BRANDED brings extensive experience and centralized resources to allow Puracy to grow and thrive in a competitive environment. BRANDED is on track to grow 50x this year since launching in 2020. Today, BRANDED has more than 200 employees around the world and has acquired over 40 brands, continuing its expansion in the United States, Europe, the Middle East and Asia.
Discounters & Department Stores
Target and Walmart want shoppers to know that their supply chains are OK. Both retailers in recent days have issued public comments reassuring customers that they are proactively managing their imports and logistics and will be stocked for the holiday season. The statements come amid media reports of widespread supply chain woes that could leave many retailers under-stocked for the season. In a press release Tuesday, Target said that “even as unprecedented supply chain challenges continue to impact retailers and industries across the globe, including the situation at our nation’s ports, we’re ready to deliver the easy, inspirational holiday shopping experience our guests love.”
Macy’s announced that it has entered into “an exclusive long-term partnership” with Fanatics that will broaden the company’s assortment of fan gear online and through its app, according to a company announcement sent to Retail Dive. The deal will grow the fan apparel product offering at Macy’s by nearly 20 times and marks the largest selection of licensed sports products ever offered to the department store. Macy’s will oversee the front end of e-commerce operations, while Fanatics will fulfill and ship orders.
In a move that leverages its shows’ popularity, Netflix is teaming up with Walmart to sell exclusive merchandise at the big-box retailer this fall. Products from top Netflix shows like “Squid Game,” “Stranger Things,” “The Witcher,” and “CoComelon” will be available at Walmart through the launch of a digital storefront called the Netflix Hub at Walmart, according to an announcement Monday. The Netflix Hub at Walmart is the streaming service’s first digital storefront with a national retailer, the announcement said.
Ross Stores will be finished, at least for the year, with its string of store-opening announcements, saying last week that its 2021 footprint growth plans will be fulfilled once its latest locations open this month. In September and October, the retailer opened 18 Ross Dress for Less and 10 DD’s Discount locations. The company this year will have opened a total of 65 locations, per a company press release. Including the new stores, the company operates 1,924 off-price apparel and home fashion stores in 40 states, the District of Columbia, and Guam, per its release. Earlier this year the off-pricer said it was on track to end with 3,000 locations across both banners.
Emerging Consumer Companies
FitOn, a digital fitness brand that offers personalized fitness and wellness programs along with a social experience, raised an $18 million Series B round led by Delta-v Capital, with participation from existing investors Accel, Telstra Ventures, Crosscut Ventures, Maverick Ventures and Second Avenue Partners. The latest round of funding gives FitOn a total of $30 million raised to date, which includes a seed round in 2018 and Series A in 2020. FitOn is a freemium product, and members have access to hundreds of workouts in cardio, strength, yoga, stretch and meditation. It also has a pro subscription model that includes music tracks on top of the workouts, connection to health monitoring devices, offline downloads, meal plans and recipes. It also has a social platform built in with a chat feature, and members can invite friends to participate in programs and challenges. The funding comes as the Los Angeles-based company hits 10 million members for its app. It was created to provide 15- or 20-minute workouts aimed at getting people moving in whatever time they can make.
Winnipeg-based startup Callia has raised a $6.4 million CAD Series A financing to fuel the expansion of its flowery delivery service and perishable, direct-to-consumer logistics model. The round consisted of a combination of debt and equity and was supported by investors from across Canada, spanning four provinces. Montreal-based Brightspark Ventures led the round, while Toronto’s Golden Ventures and Halifax-based Sandpiper Ventures supported, the latter through its new fund focused on investing in women entrepreneurs. Saskatchewan-based Conexus Venture Capital, which led Callia’s $1.1 million CAD January seed round, also reinvested as part of the round.
Blank Street, a Brooklyn-based, 14-unit coffee chain that debuted in 2020, has secured $25 million in Series A funding led by investors General Catalyst and Tiger Global. Blank Street opened its first location (a mobile coffee cart) in Williamsburg, Brooklyn in August 2020 and quickly expanded by 13 more locations throughout New York City, with a mix of coffee carts and what they call micro retail locations that are about one-quarter the size of an average café. The mobile carts operate in partnership with EV Foods, producing zero gas emissions and zero noise pollution. With such a small footprint size, Blank Street can tout its relatively low prices compared with coffee chain competitors. Blank Street claims its prices are 20-30% lower than Starbucks and on par with Dunkin’. A Blank Street cappuccino is $3.50, while a Starbucks cappuccino in the same market might cost over $4. Following a $7 million seed fundraiser earlier this year, this round, the funds will be used to help realize Blank Street’s ambitious growth plans of opening 100 locations in New York City by 2022.
Grocery & Restaurants
A unit of Abu Dhabi’s Mubadala Investment Co. acquired one of the largest Taco Bell Corp. franchisees in the U.S., underscoring the $243 billion sovereign wealth fund’s growing appetite for private equity deals. Mubadala Capital, the fund’s asset management arm, bought K-Mac Holdings Corp. from Lee Equity Partners Opportunities Fund, according to a statement on Thursday. Financial terms weren’t disclosed. K-Mac operates some 300 fast-food Taco Bell outlets that are primarily located in the country’s Midwest and South. The deal reflects Mubadala Capital’s foray into the food and beverage sector, where it invested about $1.8 billion in the past seven years alone. It also underlines the buyout division’s U.S. focus, a destination for about 80% of its capital, said Adib Martin Mattar, who heads private equity at Mubadala Capital.
Portillo’s Inc., the hot dog restaurant chain backed by Berkshire Partners, is seeking as much as $400 million in a U.S. initial public offering. The Oak Brook, Illinois-based company plans to sell 20.27 million shares at $17 to $20 apiece, according to a prospectus filed to the U.S. Securities and Exchange Commission on Tuesday. At the top end of the range, Portillo’s would have a market capitalization of over $1.4 billion, according to the number of shares outstanding listed in the filing. Founded in 1963, Portillo’s owns and operates 67 restaurants across nine states, according to the filing. Banking on the recovery from the pandemic, restaurant chains including First Watch Restaurant Group Inc. and Dutch Bros Inc. also went public this year.
Palm Beach, Fla.-based fast-casual burger chain BurgerFi International announced Monday the intention to acquire Anthony’s Coal Fired Pizza & Wings for $161.3 million from growth investment firm L Catterton. When the deal goes through, likely in the fourth quarter of 2021, L Catterton will become one of the largest shareholders of Burger Fi International. Anthony’s Coal Fired Pizza was founded in South Florida as an independent restaurant and has since grown to 61 locations nationwide and is known for their coal-fired pizza and wings, as well as homemade meatballs and other Italian specialties. The brand also launched a virtual kitchen, The Roasted Wing, in 2020, serving up different wing varieties. With the acquisition of the pizza brand, BFI will have a total of 177 stores in its portfolio across the country.
Home & Road
Lowe’s Cos. Inc. is the latest in a rapidly growing line of retailers creating an omnichannel advertising platform to connect brands with its customers. The home improvement giant is launching Lowe’s One Roof Media Network, a retail media service designed to provide a portfolio of omnichannel advertising services. The platform includes data-driven insights integrated with analysis of consumer behaviors and home category trends, as well as customized advertising products. More than 100 partner brands, including Samsung, Kohler, and GE Lighting, participated in the network’s early beta tests, with limited categories and inventory. According to Lowe’s, one kitchen and bath partner achieved a 700% return on ad spend, with several vendors in the pilot seeing returns over 1,000%. As part of the next public beta phase, Lowe’s will scale onsite inventory, select offsite activation partners, and ramp sales demand as brands plan for 2022.
It’s a good thing that consumers are in a mood to spend heading into the holiday season. They may have to dish out more for a new artificial Christmas tree this year, depending on where they buy it from. Some large sellers of artificial trees say they are increasing their prices by double-digit percentages and are blaming unduly high shipping costs tied to the ongoing global supply chain mess. “We’ll have to raise prices. For trees, it’ll be on average about 20% higher,” said Mac Harman, CEO of Balsam Hill. The company, based in Redwood City, California, does more than $200 million in direct-to-consumer annual sales of artificial Christmas trees and other decorations in the United States. “Even then it won’t cover our own costs because we’re paying as much as 300% more per shipping container this year,” said Harman.
Jewelry & Luxury
Signet Jewelers on Tuesday said it has an agreement to acquire off-mall rival Diamonds Direct for $490 million. The all-cash deal is expected to close in Q4 of fiscal 2022, subject to customary closing conditions and regulatory approval, per a Signet press release. Diamonds Direct’s leadership team will remain, with company president Itay Berger reporting directly to Signet CEO Virginia Drosos, the company said. Signet also raised its guidance for the third quarter and full year, based “on continued strong business momentum,” per the release.
After online sleuths from a Chinese jewelry publication tied lab-grown diamond jewelry brand Cama to Chow Tai Fook, the retail giant reluctantly admitted it had started the brand as a “research project.” “Chow Tai Fook fully supports the natural diamond industry as always and sells only natural diamonds,” a Chow Tai Fook Jewelry Group spokesperson told JCK. “From time to time, the group conducts research projects on emerging industry trends or technology to ensure the group stays ahead of the curve.” When asked if Cama was one of those projects, the spokesperson replied, “Your understanding is correct.”
Indian retail giant, Reliance Brands Limited (RBL) has taken a 40 percent stake in 16-year-old luxury brand Manish Malhotra for an undisclosed sum, the companies said Friday. The deal is intended to boost the brand’s positioning and drive international growth. It comes amid mounting investor interest in India’s luxury labels. “A question I am often asked is: why isn’t there a true luxury brand out of India? In three years’ time, I would expect people to say, ‘Well, there’s Manish Malhotra, that’s a global luxury brand that comes out of India.’ That’s the mission we are driving towards,” said Darshan Mehta, RBL’s managing director and chief executive. The executive pointed to the popularity the brand already enjoys among wealthy Indian expats in Europe, the US and the Middle East as an opportunity for broader expansion.
Luxury brand Coach announced that it will no longer destroy damaged or “unsaleable” goods returned to its stores, after a viral TikTok video claimed the label intentionally “slashed” unwanted items for tax purposes. Without directly referencing the allegations, the American brand wrote on Instagram Tuesday that it had “ceased” destroying in-store returns and would look to “responsibly repurpose, recycle and reuse excess or damaged products.” The move follows claims made by TikTok user Anna Sacks, who filmed herself unboxing Coach products that appeared to be rendered unusable. In the minute-long video, Sacks, who goes by the username @thetrashwalker, said it was Coach’s policy to “order an employee to deliberately slash (unwanted merchandise) so no one can use it.”
Office & Leisure
Hasbro chairman and CEO Brian Goldner has died, according to the company. His death comes shortly after Hasbro announced he would take a leave of absence for cancer treatment. “Since joining the Company more than two decades ago, Brian has been the heart and soul of Hasbro,” said the company’s interim CEO Rich Stoddart. “As a charismatic and passionate leader in both the play and entertainment industries, Brian’s work brought joy and laughter to children and families around the world.” Goldner, who was 58, joined the company in 2000, according to Hasbro, becoming CEO in 2008 and was appointed chairman of the board in 2015, the company said. He also served on the ViacomCBS board of directors. Hasbro makes Monopoly, My Little Pony and toys for a number of well-known entertainment brands including Star Wars and Marvel. The company began to refer to itself as a “toy and entertainment company,” after it bought film and TV production and distribution company eOne in late 2019. The company had a resurgence during the pandemic as bored families turned toward Hasbro to entertain themselves.
Alpha Paw has raised $8 million in a Series A funding. The funding, led by Nordic Eye, supports the astronomical growth the company has experienced since launching in late 2018, according to company officials. Alpha Paw represents one of the largest breed-specific pet communities globally with more than 10 million followers across various breed fan pages and social platforms, officials said. In the three years since Alpha Paw was founded by father-son entrepreneur duo Ramon and Victor van Meer, it has skyrocketed, earning $750,000 in sales in its first year to more than $20 million in 2020, and a projected $35 million this year, officials reported. The Series A funding will help Alpha Paw continue to expand its product line, acquire other pet brands and move forward with its vision to be the best breed-specific health resource for every pet need. In the coming months, Alpha Paw will launch a line of wellness subscription boxes that include everything a pet owner needs for personalized pet health regiments, officials said.
A perfect storm of events around the globe is leading to snarled shipping lanes on the high seas — and could mean coal in the stocking this Christmas. Pandemic lockdowns, followed by a burst of demand once things have opened up — along with labor shortages and extreme weather events — have all combined to wallop the global supply lines of everything from food and fashion to drinks and diapers. Some retailers are looking to take matters into their own hands. Craft retailer Jo-Ann Stores is floating a plan to lower its astronomical shipping costs by looking into buying its own ship, The Post has learned. A container full of goods now costs the retailer around $30,000 to ship from Asia — compared to $3,000 before the pandemic, CEO Wade Miquelon told The Post. That’s why Miquelon said his 850 stores could join a small but growing number of retailers that are looking to secure their own private freight ships. Such a move could come in the form of buying a vessel — likely with a group of other retailers — or leasing a ship, Miquelon said.
Technology & Internet
The global chip shortage could persist for another two to three years before ending, the President of Hisense, one of China’s largest TV and household goods makers, told CNBC. Industries from consumer electronics companies to automakers are dealing with a shortage of semiconductors. This has led to a shortage of products such as game consoles and manufacturers struggling to keep up with demand. Hisense Group Holding Co., a Chinese state-backed maker of TVs and household appliances, has seen some impact too. Jia Shaoqian, president of the Qingdao-based company, said the cost of production for its products has risen but business remains normal. A number of factors have led to the chip shortage including a surge in demand for consumer electronics amid lockdowns around the world after the pandemic began. The U.S. trade war with China also led to companies stockpiling supplies. Jia said if there are “no big issues” with global trade disputes, the chip shortage “could be sorted within two to three years.” “Otherwise if sanctions of trade and economy between nations continue, it is really hard to estimate,” Jia said. Major executives globally expect the chip shortage to last into 2022. Some even believe it could extend beyond that.
Best Buy said Tuesday that it agreed to acquire Current Health, a U.K. tech company that helps with remote patient monitoring and telehealth. With the move, Best Buy is pushing further into health care — a sector that CEO Corie Barry frequently describes as a growth opportunity. She has pointed to several trends that work in the retailer’s favor, such as the desire of many baby boomers to age at home, the health-care industry’s need to manage costs and the popularity of watches and other tech that tracks people’s health. The consumer electronics retailer already owns businesses that operate in the space. It acquired GreatCall in an $800 million deal in 2018. The company makes easy-to-use cell phones and connected health devices, and provides emergency response services for aging adults. It acquired another senior-focused company, Critical Signal Technologies, in 2019. Current Health’s technology allows health-care organizations to monitor patients at home. It uses data from biosensors, such as wearable devices, to give a doctor insights into a person’s medical condition and to flag if he or she needs attention. Deborah Di Sanzo, president of Best Buy Health, said the consumer electronics retailer already has “the distinct expertise in helping customers make technology work for them directly in their homes.” “The future of consumer technology is directly connected to the future of healthcare,” she said.
Finance & Economy
U.S. consumers have been more punctual than ever before in paying back debts as the economy rebounds from the pandemic. Consumer credit delinquencies fell to 1.21% in the second quarter, according to a report by American Bankers Association. That’s the lowest level since the organization started collecting the data in 1993. Delinquencies declined in nine of the 11 categories tracked by the ABA. For bank-issued credit cards, the delinquency rate fell to a record 1.38% from 2.05% in the first quarter, the report shows. The percentage of consumers who couldn’t pay back home-equity loans fell to 3.42%, while the rate for bank-issued auto loans decreased to 1.45%.
Consumers spent at a much faster pace than expected in September, defying expectations for a pullback, the Census Bureau reported. The increase came during a month when the government ended the enhanced benefits it had been providing during the Covid-19 pandemic and against forecasts that growth would slow in the third quarter due to the delta spread and a perceived pullback in consumer activity. Sporting goods, music and bookstores led the way with a 3.7% increase. General merchandise increased 2% while miscellaneous retailers rose 1.8%. As gas prices pushed higher, spending at fuel stations jumped 1.8%, for a 38.2% surge over the past year.