Story of the Week
Hilco Global and TPG Angelo Gordon Ink Consumer-Focused JV with Bluestar Alliance
Hilco Global and TPG Angelo Gordon have formed a new joint venture that will identify, acquire, and finance consumer brands and IP in partnership with Bluestar Alliance, LLC. No financial terms were disclosed. On the transaction, Ryan Mollett, global head of credit solutions at TPG Angelo Gordon, and Jake Gladstone, co-head of research within TPG Angelo Gordon’s credit solutions business, said in a statement, “TPG Angelo Gordon has been investing in the consumer sector for many years, and we are excited to work with industry-leading partners to capitalize on attractive opportunities in the sector. We believe combining Bluestar’s licensing and operating expertise, Hilco’s unique sourcing and asset capabilities, and TPG Angelo Gordon’s structuring and financial expertise creates a differentiated competitor, and we are eager to grow this platform.”
Apparel & Footwear
Esprit US subsidiaries file for bankruptcy
Esprit Holdings Limited, a global publicly-traded retail company, announced the bankruptcy of its two U.S. subsidiaries, adding to insolvency filings in Europe and Asia as the brand struggles to stay afloat. Both Esprit U.S. Distributions Limited and Esprit U.S. Retail Inc. filed notices of Chapter 7 bankruptcy on October 28th, according to a company announcement. Esprit U.S. Distributions, an indirect wholly-owned subsidiary of Esprit Holdings, and Esprit U.S. Retail, a direct wholly-owned subsidiary of Esprit U.S. Distributions, had combined intra-group liabilities of approximately 315 million Hong Kong dollars, or about $40.5 million, as of June 30, per the company.
Draper James hires Michael Kors veteran as CEO
Southern-inspired lifestyle brand Draper James announced on October 29th it named Jeannie Yoo its new chief executive officer, effective Oct. 15. Yoo is a fashion industry veteran, who most recently served as president of Adam Lippes where she drove growth across all channels, including DTC. She has also been director of e-commerce at Coach and global merchandising for Michael Kors, per a news release. At Draper James, Yoo will focus on direct-to-consumer channel growth, category diversification and global scaling. She also takes on an advisory role within the broader Consortium Brand Partners portfolio, which also includes activewear brand Outdoor Voices.
The RealReal CEO out after less than 2 years
The RealReal said President and Chief Operating Officer Rati Sahi Levesque, who helped found the luxury resale site in 2011, has replaced John Koryl as president and chief executive officer. Koryl, who took the CEO post in February 2023, has left the resale marketplace and no longer serves on its board, according to a company press release. The company also provided preliminary Q3 results that it said exceeded its expectations, and raised its guidance for the year.
Athletic & Sporting Goods
Kanye West and Adidas reach settlement after years of lawsuits
Adidas has reached an out-of-court settlement with Kanye West – known as Ye – ending all legal proceedings between them, the sportswear brand has said. Adidas and West had been embroiled in multiple lawsuits for the past two years after the German manufacturer ended a partnership with the rapper over antisemitic comments he made in 2022. A mountain of West’s popular brand of Yeezy trainers were left unsold after the partnership ended. Yeezy trainers had been a big hit for the company and were much sought after on the used market, routinely selling for hundreds of pounds. Last year, Adidas confirmed some proceeds from the sale of Yeezy stock – which was initially in high demand but more recently selling at a discount – would be given to charity.
World Gym International Acquired by World Gym Taiwan, Largest Franchisee in the World Gym Network
World Gym International, the iconic global fitness brand, has been acquired by World Fitness Services, Ltd (“WFS”), the parent company of World Gym Taiwan, a publicly listed company (Taiwan Stock Exchange) and the largest franchisee in the World Gym network. WFS owns and operates 130 World Gym fitness centers in Taiwan, demonstrating its deep understanding of the brand and commitment to fitness excellence. This strategic move marks a significant milestone for World Gym, positioning it for accelerated global expansion and an enhanced member experience while preserving its legendary fitness legacy. WFS brings substantial resources and expertise to the table, enabling World Gym to further solidify its position as a global leader in the fitness industry. John Caraccio, Chairman of WFS, will serve as interim CEO of World Gym International, while Michael Sanciprian, former CEO of WFS, shall serve as Executive Director.
Ōura, a San Francisco, CA-based maker of Oura Ring, the smart ring that delivers personalized health data, insights, and daily guidance, acquired Sparta Science, an enterprise software company that transforms health and performance data into actionable intelligence. The amount of the deal was not disclosed. ŌURA will leverage Sparta Science’s Trinsic data platform, which streamlines the process of collecting, analyzing, and delivering human health and performance information at scale to improve and expand the Oura Teams B2B offering. The result will be an enhanced Oura Teams platform to serve ŌURA’s base of enterprise, healthcare, and government customers, helping them empower their employees and service members to deliver improved organizational readiness and resilience.
Cosmetics & Pharmacy
Estée Lauder Appoints Stéphane de La Faverie as New CEO, and Jane Lauder steps down from company
Stéphane de La Faverie, a long-time Estée Lauder executive and current group president, has been chosen as the new CEO of Estée Lauder, according to sources reported by The Wall Street Journal. De La Faverie has been with Estée Lauder since 2013, managing an array of high-profile brands like Jo Malone London, Le Labo, and Kilian Paris. Before joining Estée Lauder, he held executive roles at L’Oréal. His anticipated promotion follows internal shifts, including Jane Lauder stepping down from her executive role by year-end. The decision comes as Estée Lauder confronts global market pressures, particularly in China, where consumer demand has been softer.
It was also announced that Jane Lauder, formerly a candidate for the CEO role, will be stepping down from her position as chief data officer and executive vice president of enterprise marketing at Estée Lauder Companies (ELC), effective from the end of 2024. She intends to support the company’s “transformational change” as an advisor throughout the fiscal year. She spent 28 years at ELC serving in multiple leadership roles.
SFEP-Backed SV Labs Announces Acquisition of Sigan Industries
SV Labs Corporation, a portfolio company of San Francisco Equity Partners (SFEP) and a leading contract development and manufacturing organization (CDMO) serving beauty and personal care brands, announced the acquisition of Sigan Industries Group, Inc. Financial terms of the transaction were not disclosed. Sigan Industries shareholders retained a meaningful ownership interest in the combined entity, which will be led by SV Labs CEO Graham Orriss. Sigan Industries is a full-service CDMO serving beauty and personal care brands in multiple end markets including haircare, skincare, body care and Over-the-Counter products. Based in Toronto, Canada, the company has developed a reputation for innovation, quality and exceptional customer service over its 26-year operating history.
Fresha Invests in Yuv To Revolutionize Hair Coloring
On the heels of securing a $31 million venture debt facility from J.P. Morgan, beauty, wellness, and self-care platform Fresha made a strategic investment with Yuv, a cutting-edge company specializing in AI-powered hair color technology. London-based Yuv is a beauty tech company focused on transforming the hair industry through innovation and sustainability. Its flagship product, the yuv Lab, is the world’s first smart device designed for freelancers and salons, offering customizable hair color formulations at the touch of a button. Fresha boasts a network of over 120,000 merchants, with a strong presence in the United States, United Kingdom, Canada, Australia, New Zealand, and Europe. The platform’s reach extends across 120 countries, where customers book tens of millions of appointments monthly. Fresha has facilitated transactions worth over $35 billion in gross merchandise volume, showcasing its significant impact on the global beauty and wellness industry.
Discounters & Department Stores
Walmart+ annual membership fee slashed in half for the holidays
Walmart has slashed the price of its Walmart+ membership in half ahead of a holiday push for what will be the shortest shopping season in years. The $98 annual fee is $49 now through Dec. 2; shoppers can also opt for a shorter free trial instead. At the same time, the retail giant this week also unveiled a host of deals on a wide assortment of products, including toys, tech, electronics, kitchen appliances, home, fashion and décor. Specials will be featured during three sales events, on Nov. 11, Nov. 25 and Dec. 1. This year, Black Friday falls on Nov. 29 and Cyber Monday is Dec. 2.
Ross Stores announced the appointment of James Conroy as its next chief executive officer. He will join the company on Dec. 2 and take over the top position on Feb. 2, when current CEO Barbara Rentler will move into an advisory position. Rentler will continue “to play an important role” in merchandising strategies with the company through March 31, 2027, according to a company press release. She has been with the retailer for nearly 40 years, and has served as CEO since 2014. The company announced a long-term succession plan last June that originally had Rentler staying on as CEO through January 2026. Ross did not immediately respond to questions as to why Rentler is stepping down from the CEO role a year early.
Emerging Consumer Companies
First raises $4.2 million seed round to simplify prenuptial agreements
First, a San Francisco-based company aiming to simplify prenuptial agreements, announced a $4.2 million oversubscribed seed funding round led by Expa, with participation from Springbank, Cleo Capital, and Karman Ventures. First helps consumers obtain a prenuptial agreement online, reviewed by independent, experienced family law attorneys. It currently works with customers in California and plans to use funds raised to accelerate our expansion, boost product growth, and enhance its existing platform to meet the growing needs of its customers. Interest in and adoption of prenuptial agreements has exploded over the last several years, particularly among Millennials, digital natives, and women.
Men’s skincare brand Caldera + Lab raises $6 million
Caldera + Lab, a premium skincare brand focusing on providing high-performance, clean, and sustainable products for men, has raised a $6 million Series A from HIPstr, the early-stage investment arm of HighPost Capital. Caldera + Lab intends to use the proceeds to accelerate growth, increase its market share and marketing efforts, fuel its retail expansion strategy, drive R&D, and add talent throughout the organization. The brand was launched in 2019.
Cruisebound, digital cruise assistant, raises $13 million
Cruisebound, the digital cruise assistant favored by first-time cruisers, announced it closed a $13 million financing round. The investment was led by Thayer Ventures with participation from Link Ventures, former Booking Holdings Chairman and CEO Jeff Boyd, PAR Capital Ventures, Tripadvisor co-founder and former CEO Steve Kaufer, Flybridge, Plug & Play Ventures and several others. The fresh capital will accelerate Cruisebound’s already-popular cruise booking products. “We think of Cruisebound as your friendly cruise co-captain and leverage new technologies like AI wherever we can to make the booking experience better,” said Bjorn Larsen, co-founder, Cruisebound. “As a result, 83 percent of our customers book without any agent assistance, which is significantly higher than the industry average. And the technology appeals to a younger consumer. The average Cruisebound customer is 37 years old, 10 years younger than the average cruiser.”
Food & Beverage
PE firm Encore buys pizza-products group DeIorio’s
Private-equity firm Encore Consumer Capital has bought US pizza-products supplier DeIorio’s for an undisclosed sum. DeIorio, based in Utica in New York state, manufactures pizza dough balls, pre-formed crusts and shells. The company’s customers include pizza restaurants, convenience stores and grocery retailers in North America. DeIorio’s Luis Pereira CEO said: “Encore brings deep industry experience and is the right partner to support us as we continue on our growth trajectory.” Encore will add DeIorio’s to a portfolio that includes over 40 companies. It is said to have raised more than $900m in committed capital to date.
Double B Foods of Texas Bought by Private Equity Firm Anderson Group
Private equity firm Anderson Group has acquired Double B Foods Inc., a manufacturer of frozen, handheld, dough enrobed protein products, wrap and rolled snack/appetizers and dips for customers in the retail (primarily private label) and foodservice channels.
Members of Double B’s senior management team participated in the buyout, including CEO Patrick O’Ray and CFO Don Wall. This is Anderson’s third transaction in 2024 and its 17th (including add-on acquisitions) in the food and beverage space since 2010.
UpSnack Brands brings together Pipcorn, Spudsy
UpSnack Brands, a recently formed company focused on snacking and sustainability, has acquired the assets of Pipcorn Heirloom Snacks and Spudsy. Financial terms of the deal were not disclosed. Pipcorn made its debut in 2012 as a marketer of popped heirloom corn, and the brand’s portfolio has grown to include cheese balls, corn chips, crunchy snacks, upcycled heirloom flour twists and cornmeal fries. Spudsy was founded in 2018 and sources imperfect sweet potatoes to create puffed snacks, sweet potato fries and more. Joe DePetrillo, chief executive officer of Pipcorn, will become CEO of UpSnack Brands following the transaction.
Grocery & Restaurants
TGI Fridays files for Chapter 11 bankruptcy
TGI Fridays filed for Chapter 11 bankruptcy early on Saturday morning just days after shuttering nearly 50 restaurants. Added to the list of closures in January, when the struggling casual-dining chain closed another 36 underperforming restaurants, TGI Fridays now has 39 domestic company-owned restaurants remaining, in addition to franchised stores owned by 56 franchisees globally, down from 233 restaurants at the end of 2023, according to Technomic data. According to the bankruptcy filing in the Northern District of Texas, the remaining restaurants will remain open during this time of restructuring, and TGI Fridays will use this time to “explore strategic alternatives in order to ensure the long-term viability of the brand.” The TGI Fridays brand and intellectual property are owned by a separate investor group and are not part of the Chapter 11 process. The franchisee-owned restaurants are also not a part of the bankruptcy filing.
Chipotle Misses Revenue Estimates
Chipotle Mexican Grill on Tuesday reported mixed quarterly results despite another quarter of higher traffic to its restaurants. Chipotle reported third-quarter net income of $387.4 million, or 28 cents per share, up from $313.2 million, or 23 cents per share, a year earlier. The company’s food and beverage costs increased during the quarter, in part due to Chipotle’s decision to reemphasize generous portions after social media-fueled backlash over the size of its burrito bowls this summer. Same-store sales rose 6%, just shy of StreetAccount estimates of 6.3%. Traffic to restaurants increased 3.3% in the quarter, continuing the chain’s streak of bucking an overall slump in foot traffic across the industry. While many consumers have opted to eat out less, Chipotle has benefited from having a wealthier customer base that is willing to pay more for its burritos and bowls.
McDonald’s Reverses U.S. Same-Store Sales Decline, but E. Coli Fallout Looms
McDonald’s on Tuesday reported quarterly earnings and revenue that beat analysts’ expectations as its U.S. restaurants reversed last quarter’s same-store sales decline. However, investors are worried about another dent to U.S. sales fueled by a recent E. coli outbreak across 13 states linked to McDonald’s Quarter Pounder burgers. As of Friday, 75 health cases have been tied to the outbreak, including one death of an older adult. Daily sales and traffic turned negative immediately after McDonald’s was linked to the outbreak, CFO Ian Borden said Tuesday during the company’s earnings call. Still, the company isn’t expecting the situation to have a material impact on its business. Health authorities have honed in on the burger’s slivered onions as the likely source, and McDonald’s has suspended its relationship with the supplier. Quarter Pounder burgers will return to affected restaurants on a rolling basis this week, sans slivered onions. Executives tried to reassure investors, saying that the company had addressed the issue and was moving on to bring back diners.
Home & Road
Wayfair CEO Shah Cites Q3 Progress, Improving Outlook
Wayfair turned in an adjusted profit in the third quarter and beat or equaled Wall Street earnings and revenue expectations. Net loss was $74 million, or 60 cents per diluted share, versus a net loss of $163 million, or $1.40 per diluted share, in the quarter a year before. Adjusted for one-time events, Wayfair reported, net income was $28 million, or 22 cents per diluted share, versus a loss of $15 million, or 13 cents per diluted share in the year-previous period. An analyst consensus estimate published by Yahoo Finance called for earnings of 13 cents per adjusted diluted share and revenues of $2.88 billion.
SharkNinja Posts Q3 Gains with a Lift from All Divisions
For the third quarter, SharkNinja beat analyst estimates on sales and earnings as revenues gained across all the company’s business segments. Net income increased to $132.3 million from $18.7 million as net income per diluted share increased to 94 cents from 13 cents in the prior-year quarter. Adjusted for one-time charges, net income advanced to $170.5 million from $133 million as adjusted net income per diluted share advanced to $1.21 from 95 cents in the year-earlier period, the company reported. A Yahoo Finance-published analyst consensus estimate called for earnings per adjusted diluted share of $1.14 and revenues of $1.32 billion.
Hamilton Beach Cites New Premium Products in Reporting Q3 Sales Gain
Hamilton Beach Holdings Co. reported a year-over-year revenue gain while earnings declined in its third quarter. Net income was $1.9 million, or 14 cents per diluted share, versus $10.3 million, or 74 per diluted share, in the year-earlier period, the company reported. Total revenue was $156.7 million versus $153.6 million in the year-prior quarter, when the company saw the post-pandemic normalization of business conditions and trends, Hamilton Beach noted. The revenue gain reflected a favorable product mix and higher volume. In the company’s consumer markets, revenue increased in the United States and Mexico and decreased in other Latin American markets and Canada. The company’s global commercial business revenue decreased because of international markets softness, to reported.
Jewelry & Luxury
Fenix Buys Lusix in Lab-Grown Remix
Indian lab-grown diamond company Fenix has received court approval to buy rival Israeli producer Lusix for $4 million, the two companies confirmed to JCK. They declined further comment. The news first appeared in Israeli business publication CTech. Lusix had filed for debt relief under Israel’s insolvency law in August. The following month, Japanese manufacturer EDP, which produces lab-grown diamond seeds, made a deal to buy Lusix for around $2.5 million, pending court approval. But EDP eventually withdrew its offer, citing Israel’s security situation and Fenix’s higher bid, CTech reported.
Gold Jewelry Sales Fall as Price Keeps Rising
Gold jewelry sales fell 12% year-over-year in the third quarter, with consumers wary of the yellow metal’s soaring price, according to the World Gold Council’s latest Gold Demand Trends report. After crossing the $2,700 mark less than two weeks ago, gold appears headed for yet another milestone: $2,800 an ounce. Its spot price at press time on Wednesday was $2,785 an ounce. In its report, the World Gold Council (WGC) said gold jewelry sales dropped to their lowest third-quarter level since the COVID crisis in 2020. Nonetheless, sales increased 17% over 2024’s second quarter. In the United States, gold demand declined 2% year-over-year and 14% from the second quarter, the WGC said. But it added, “Lean inventory levels bode well for restocking ahead of the seasonally strong fourth-quarter holiday season.”
De Beers’ Production Drops 25% as Demand Remains Sluggish
Production dropped 25 percent in the third quarter for De Beers Group as diamond demand remains sluggish, particularly in China. The diamond miner and marketer reported late last week that third-quarter production totaled 5.6 million carats, compared with 7.4 million carats in Q3 2023. Year-to-date, production has totaled 18.9 million carats, a 21 percent drop-off when compared with 23.9 million carats in 2023. De Beers cited the “prolonged period” of lower demand for diamonds that has resulted in a glut of goods in the midstream, and its continued focus on managing costs as parent company Anglo American looks to offload it as the reasons for the drop in production. Production was down in three of the four countries where De Beers mines diamonds.
Office & Leisure
Caesars Unloading LINQ Promenade for $275 Million
Caesars Entertainment announced that it is selling the LINQ Promenade on the Las Vegas Strip for $275 million as part of the gaming company’s ongoing debt reduction efforts. A joint partnership comprised of TPG Real Estate and Acadia Realty Trust investment management platform is acquiring the collection of retail and boutiques located near the Caesars-operated LINQ Hotel. That casino resort is not part of the transaction, which is slated to close in the current quarter. “The sale of the LINQ Promenade represents an accretive, non-core asset sale that will accelerate our debt reduction goals. I want to thank all the team members and the tenants of the LINQ Promenade for their partnership over the last 10 years and wish them continued success,” said Caesars CEO Tom Reeg in a statement.
Pure Treats Acquires Manufacturer of Raw Freeze-Dried Pet Treats
Pure Treats, a Montreal-based manufacturer of dog and cat treats, food and toppers has agreed to acquire Bar W Foods & Eighteen Below Partners (18 Below) and its human-grade meat processing and freeze-drying facility in Fort Worth, Texas. “We’re ecstatic for the opportunities this acquisition brings our brands, our customers and our loyal pet parents,” said Marc Cathcart, president of PureBites. “18 Below operates a leading human grade kitchen that has been making raw freeze-dried treats, food and toppers for pets for the past 11 years. They are led by Paul Wehba and his passionate team who are obsessed with delivering the best quality meat and fish products to people and pets throughout North America.”
Spin Master reports Q3 2024 results
Spin Master has announced its financial results for the three and nine months ended 30th September, 2024. Revenue was $885.7m, an increase of 24.7% from $710.2m, and includes its subsidiary Melissa & Doug Revenue of $155m. Revenue by operating segment reflected an increase of 34.8% in Toys and declines of 41.5% in Entertainment and 16.8% in Digital Games. Toy Revenue was $810.9m compared to $601.5m. Toy Gross Product Sales were $922.7m, an increase of $244.1m or 36.0% from $678.6m, and includes Melissa & Doug Toy Gross Product Sales of $182.3m. Toy Gross Product Sales, excluding Melissa & Doug were $740.4m, an increase of $61.8m or 9.1%.
Technology & Internet
Amazon Shares Pop on Earnings Beat
Amazon reported better-than-expected earnings and revenue for the third quarter, driven by growth in its cloud computing and advertising businesses. In cloud, Amazon Web Services revenue was a hair below consensus estimates, but it’s growing faster than the same period last year. Sales grew 19% during the quarter compared to a year ago when sales accelerated by 12%. Amazon’s capital expenditures surged 81% year-over-year from $12.48 billion to $22.62 billion as it continues to invest in data centers and equipment like Nvidia GPUs to power its artificial intelligence products. Amazon has launched several AI products in its cloud and e-commerce businesses, and it’s also expected to announce a new version of its Alexa voice assistant powered by generative AI. Amazon CEO Andy Jassy said the company plans to spend about $75 billion on capex in 2024 and that he suspects the company will spend more in 2025.
Meta Misses on User Growth, Warns of 2025 Jump in AI Spending
Meta reported weaker-than-expected user numbers and warned of a significant acceleration in its infrastructure expenses in 2025 in its third-quarter earnings report on Wednesday. Sales in the third quarter jumped 19% year over year while net income grew 35% to $15.7 billion from $11.6 billion a year earlier. That represents Meta’s lowest year-over-year growth for net income since the second quarter of 2023. The company reported 3.29 billion daily active people for the third quarter. That was up 5% year over year but came in below analysts’ expectations of 3.31 billion. Meta also raised capital expenditures guidance for the 2024 fiscal year to between $38 billion and $40 billion, up from $37 billion to $40 billion previously. Additionally, the company said it expects capital expenditures to continue to grow significantly in 2025 due to an acceleration in infrastructure expenses.
Finance & Economy
Mortgage Rates Jump for Fifth Week, With 30-Year Reaching 6.72%
Mortgage rates in the US rose for the fifth week in a row. The average for a 30-year, fixed loan was 6.72%, up from 6.54% last week, Freddie Mac said in a statement on October 31st. Borrowing costs have climbed steadily since late September, when the 30-year average hit a two-year low of 6.08%. Higher mortgage rates are cutting deeper into purchasing power for house hunters already struggling to find affordable listings. Uncertainty over the outcome of the presidential election may also be keeping some would-be buyers on the fence. Strong economic reports have bolstered the case for a slower pace of interest-rate cuts by the Federal Reserve, which is scheduled to meet next week.
US consumer spending beats expectations in September
U.S. consumer spending increased slightly more than expected in September, putting it and the economy on a higher growth trajectory heading into the final three months of the year. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.5% last month after an upwardly revised 0.3% gain in August, the Commerce Department’s Bureau of Economic Analysis reported on October 31st. Economists polled by Reuters had forecast consumer spending advancing 0.4% after a previously reported 0.2% rise in August.
Big miss on jobs report, unemployment rate steady
The US labor market added far fewer jobs than expected in October as weather disruptions and worker strikes weighed on the labor market. Data from the Bureau of Labor Statistics released November 1st showed the labor market added 12,000 payrolls in October, less than the 100,000 expected by economists. Meanwhile, the unemployment rate held steady at 4.1%, partly due to a difference in how the BLS collects data for that metric versus monthly job additions. Workers who were employed but earned no money wouldn’t be counted as unemployed in the household survey, which is where the unemployment rate comes from. They would not be considered employed in the payroll survey, which is how job additions are tabulated. October job additions came in far lower than the revised 223,000 added in September. Monthly job additions for August and September were also revised lower by a combined 112,000.
Key inflation rate hits 2.1% in September, as expected, closing in on Fed target
Inflation increased slightly in September and moved closer to the Federal Reserve’s target, according to a Commerce Department report on Oct 31. The personal consumption expenditures price index showed a seasonally adjusted 0.2% increase for the month, with the 12-month inflation rate at 2.1%, both in line with Dow Jones estimates. The Fed uses the PCE reading as its primary inflation gauge, though policymakers also follow a variety of other indicators. Fed officials target inflation at a 2% annual rate, a level it has not achieved since February 2021. The September headline rate was down 0.2 percentage points from August.
