Just two weeks into Kohl’s rollout of an initial 200 Sephora in-store shops, Kohl’s CEO Michelle Gass said the partnership is showing the potential to offer benefits in a myriad of ways.
According to Ms. Gass, the Sephora shops in Kohl’s are driving “extraordinary growth” in Kohl’s beauty business and boosting average unit retails (AURs) in the category. “This is prestige beauty into categories that we’ve really never offered to this level,” said Ms. Gass on Kohl’s third-quarter analyst call. Early standout sellers include Fenty, Too Faced, NARS and the entry price point Sephora collection in makeup, Tatcha in skincare, Olaplex in hair care and Gucci and Armani fragrance.
Across the store, Sephora is supporting a mid single-digit sales lift to sales in stores where in-store shops were introduced and that’s expected to build in the months ahead as more customers learn about the shops.
Ms. Gass said Sephora customers are purchasing across a wide range of beauty categories and price points and tend to shop across the store. Roughly half are making purchases in at least one other category.
Kohl’s is positioning the 2,500-square-foot shops at the front of its locations, and placing growth categories, including active, alongside the shops.
In addition, over 25 percent of those shopping Sephora are new to Kohl’s. Ms. Gass said, “They are younger and more diverse, and we are successfully driving loyalty signups.”
“We’re finally in the beauty business,” Ms. Gass added. “It’s prestige. It’s making us an even more relevant, useful retailer. And then on top of that, we’re going to build a very big beauty business. So there’s a lot to like with this partnership — the traffic, getting into beauty and relevancy.”
Management plans to have an additional 400 Sephora shops open by late spring 2022 and 250 in 2023. Kohl’s owns the Sephora inventory and the two retailers share profits generated by the shops.
Discussion Questions: What’s the most encouraging sign that Kohl’s partnership with Sephora is off to a strong start? How transformative do you see the partnership potentially being for Kohl’s?
Comments from the RetailWire BrainTrust:
The fact that Kohl’s is seeing a significant lift in loyalty sign-ups is encouraging, plus its commitment to adding an additional 650 Sephora shops over the next two years.
Kathleen Fischer, Director of Retail Marketing, enVista
The latest results from Kohl’s were weak. While most retailers are seeing gains over 2019, Kohl’s is not – its sales are down 0.5 percent. This in an environment where the consumer is spending like crazy and Kohl’s should be benefiting from elevated return rates via Amazon and its handful of new Sephora shops. That tells you all you need to know. Sephora is a great win and it will attract footfall. However, unless Kohl’s improves its own offer, that traffic will not convert into substantial incremental sales. Indeed, in some stores the addition of a bright shiny Sephora shop-in-shop has left the rest of Kohl’s looking extra drab. As we saw with J.C. Penney, having a great brand like Sephora as a part of the mix does not transform fortunes!
Neil Saunders, Managing Director, GlobalData
If you haven’t been in a Kohl’s store lately, brands like Calvin Klein, Eddie Bauer, Nine West and Cole Haan represent quite a reinvention of the retailer’s positioning. The Sephora installation is the most significant move yet to capture a new and more upscale customer. The history of Sephora at J.C. Penney suggests that the shop will draw new customers to Kohl’s, but in this case there is other compatible merchandise to buy.
On a personal note, I usually point out that I worked for Kohl’s from 1982 to 2006. I started as the cosmetic buyer, and the store’s brands included Cover Girl, Maybelline and so forth. (I exited those businesses as the company sought to move away from discount and drug competitors.) It’s surreal for me to walk into a Kohl’s store today, and to find brands like Clinique and Lancome represented, but I certainly applaud Kohl’s newly ambitious approach to the category.
Dick Seesel, Principal, Retailing In Focus LLC
The success in prestige beauty is a particularly interesting callout – it’s a great reminder that most consumers cross-shop across price points. While the Sephora/Kohl’s partnership was at first a bit surprising, given the slightly different profile of consumers externally, the success of higher-end brands shows the gains of simply more eyeballs on brands. Though at first blush, it seems like Sephora is better positioned for benefit than Kohl’s.
Katie Thomas, Lead, Kearney Consumer Institute
Encouraging signs include the percent of new Kohl’s shoppers Sephora is bringing in, and that they are younger and more diverse. And the fact that Kohl’s is opening more stores signals strength too. As for being transformative, I think the other panelists are right, Kohl’s has to work on their store experience and merchandise adjacencies on the path to and within sight of Sephora and ensure they impress those new shoppers. I think understanding the insights into new shoppers and their consideration of other Kohl’s offerings is important. They should then act on those insights in a constructive way. You don’t want people coming in, making a beeline for Sephora and then leaving.
Kohl’s is making other good moves in the business operations. I am traditionally a Kohl’s naysayer but I think it is a viable shopping place for many and they appear to be trending in the right direction.
Raj B. Shroff, Founder & Principal, PINE Strategy & Design
Headlines of the Week
Constellation Brands and energy drink maker Monster Beverage Corp. are considering a deal, according to Bloomberg. Citing “people familiar with the matter,” Bloomberg reported that Monster has discussed a potential deal with its advisers, however “the exact structure of a potential tie-up couldn’t be immediately learned and it’s unclear whether discussions will lead to a full merger or asset deal.” A potential deal between Constellation and Monster would be a tectonic shift in the beverage industry at a much more rapid pace than expected. Monster ($47 billion) and Constellation ($44 billion) hold similar market values, and thus have the potential to create a combined entity worth nearly $100 billion.
Impossible Foods closed a $500 million funding round, bringing its lifetime funding to more than $2 billion. This latest round was led by Mirae Asset Global Investments. Other participants were existing investors. The funding will help Impossible Foods continue to grow in the U.S. and internationally. It will use the new investment to expand retail growth through its supply chain, product portfolio and technology platforms, which the company said will help it achieve its mission of addressing the threat of climate change caused by animal agriculture. This is the first significant funding round for Impossible Foods this year. The company received a total of $700 million in two separate rounds in 2020: $500 million in March — also led by Mirae — and $200 million in August.
Dollar Tree’s sales increased 3.9% year over year to $6.4 billion in the third quarter. Comparable sales were up 2.7% in the retailer’s Family Dollar business and 0.6% at its namesake banner. CEO Michael Witynski said the retailer had a strong finish to the quarter “as shoppers are increasingly focused on value in this inflationary environment.” At the same time, cost pressures led to a drop in operating income of more than 33%. While customers sought out value at Dollar Tree, the discounter is raising its own prices, as it plans to trade out its 35-year-old $1 price promise for a $1.25 price point across a majority of its assortment.
Apparel & Footwear
Authentic Brands Group sold “significant” equity stakes to investment firms CVC Capital Partners and HPS Investment Partners. The firms agreed to purchase the equity from current, unspecified shareholders. The deal, expected to close in December, values the brand licensing conglomerate at $12.7 billion and leaves BlackRock as its largest shareholder, as the firm has been since 2019, according to a press release. With the new investors, Authentic Brands is delaying a planned initial public offering. In its IPO filings, Authentic Brands outlined an ambitious imagined path toward growth, whereby the brand owner and manager will enter new categories and add many billions of dollars in revenue as it takes on more, and more varied, intellectual property. Authentic Brands already owns or co-owns Forever 21, Barneys New York, Nine West, Nautica, Brooks Brothers, Lucky, J.C. Penney and other brands, along with the rights to Elvis Presley, Muhammad Ali and other celebrity names, as well as the sports media giant Sports Illustrated. It also agreed to buy Reebok earlier this year for $2.5 billion, a deal that the company expects to close in next year’s first quarter and bring its portfolio to $20 billion in retail sales.
Gap CEO Sonia Syngal on Tuesday defended the apparel retailer’s air freight investments, telling CNBC’s Jim Cramer the near-term profitability impacts were worth taking ahead of the crucial holiday shopping season. In a “Mad Money” interview after Gap’s disappointing quarterly results, Syngal said the company decided to take those costly transportation steps to overcome what proved to be longer-than-expected Covid closures in Vietnamese factories. “We believe the right thing to do is compete in the holiday season to have the right stock across all four of our brands, and that’s what we’re doing,” Syngal said, referring to Old Navy, Gap, Banana Republic, and Athleta. “About a half billion top line [revenue] affected by stock out, and about a half billion of transitory air costs that we’re incurring” to ensure products arrived at their intended end markets, she said. Gap shares plunged 16% in extended trading Tuesday as Wall Street reacted to the company’s weak third-quarter results and forecast changes. The company also lowered its full-year guidance for sales and earnings, both of which now check in below where analysts polled by Refinitiv had projected.
If you walk into an Abercrombie & Fitch, the first thing you’ll notice is this: It smells exactly the way you remember. It smells like a hot upperclassman leaning up against your locker, toying with his puka shell necklace, asking to “borrow” your algebra homework. Most of the identifying features of Abercrombie that shoppers recall from the early 2000s have been vanquished like so many other badly aging artifacts of the era. Fierce has been around since 2002 and will probably outlast us all, but the sameness of the scent only throws into relief the fact that almost everything else about Abercrombie & Fitch has changed beyond recognition. The stores, once dark and loud, are light and airy. The A&F brand and its mascot, the moose, were once emblazoned across nearly every garment, but no more; save for a few vintage-looking tees, the name “Abercrombie” is nowhere to be found, and the best-selling tops are logoless. That last part is the real twist. The store’s shelves were once stocked with sizes ranging from extremely skinny to still-pretty-thin. Now it offers extended sizes, lengths and fits.
Frankie’s on the Park, a Chicago-based tween apparel retailer, sued Francesca’s in the U.S. District Court for the Northern District Of Illinois. Frankie’s is asking the court to stop Francesca’s use of “Franki” and to award legal fees and damages. Frankie’s is alleging “trademark infringement, unfair competition and false designation of origin and unfair and deceptive trade practices,” related to Francesca’s tween brand, Franki, per court documents. Frankie’s on the Park runs two stores, in Chicago and Santa Monica, California, its e-commerce site, and pop-ups in various cities. Francesca’s — which earlier this month spun Franki into a stand-alone brand after a quiet launch before its bankruptcy last year — didn’t immediately return requests for comment. “Frankie’s established its retail store in 2008, more than 13 years ago,” the retailer points out in its lawsuit.
Athletic & Sporting Goods
The ASICS Group has announced that it will acquire 100% of the shares from Registration Logic Pty Ltd (RL), which operates Register Now, a race registration site in the Oceania. Register Now is Australia’s number one race registration platform and ASICS will use it to expand consumer touch points and increase sales of its products. The purchase forms part of the brand’s mission to transform into a digital-driven company, which is the strategic objective of its mid-term plan 2023. The major business of RL is the operation of a website used by runners when applying for races, and this includes the provision of other related pages for some races, such as those for race results. Australia is a high-growth and profitable market for the Group, with the number one market position in the performance running category. The acquisition of RL will allow ASICS to expand its marketing channels for running events and accelerate its interaction with Australian runners.
Felt Bicycles has been acquired by Pierer Mobilty, better known as the Austrian parent group to KTM motorcycles, but also as one of Europe’s faster growing e-Bike businesses. The change of hands shuffles Felt’s ownership once again with the brand having only been taken on by the French Rossignol Groupe in February of 2017. Pierer is the parent to electric bike labels Husqvarna, R Raymon, and GasGas. It is not however the parent to KTM Fahrrad, the branded business for bicycles and e-Bikes, as carried in the UK by Fli Distribution. As a whole, Pierer has annual revenues north of €1.5 billion. Founded in 1991, Felt Bicycles has a reputation for producing high-spec bikes for the road, triathlon, track, gravel, cyclocross and adventure segments.
Cosmetics & Pharmacy
Mentholatum is expanding its offerings. The company recently announced that it has acquired Hydrox Laboratories as one of its subsidiaries. Through this transaction, the company looks to provide opportunities that will grow its capabilities in sales, manufacturing, and research and development. Based in Orchard Park, N.Y., Mentholatum is parent to such brands as Rohto eyedrops, Oxy Acne Care, Mentholatum Ointment and Soft Lips, as well as Private Label products, the company said. Hydrox Laboratories currently manufactures infection prevention and personal care products, as well as hand sanitizers.
Lush Cosmetics, the eco-friendly bath, body, skin and haircare retailer is discontinuing its use of Facebook, Instagram, TikTok and Snapchat, with its accounts to be deactivated effective Nov. 26, 2021. Lush said its global presence across the four social media platforms will remain deactivated until the platforms take action “to provide a safer environment for users.” The new policy is rolling out across all 48 countries where Lush operates. “As an inventor of bath bombs, I pour all my efforts into creating products that help people switch off, relax and pay attention to their wellbeing,” said Jack Constantine, chief digital officer and product inventor at Lush. “Social media platforms have become the antithesis of this aim, with algorithms designed to keep people scrolling and stop them from switching off and relaxing.” Lush, which operates more than 920 stores worldwide and has a long history of environmental leadership and social activism, noted that the same way that evidence against climate change was ignored for decades, concerns about the serious effects of social media are barely being acknowledged.
Discounters & Department Stores
Nordstrom on Tuesday said that third quarter net sales rose 18% year over year and fell 1% from 2019 to $3.5 billion. Digital sales fell 12% year over year but were up 20% compared to 2019, according to a company press release. Nordstrom doesn’t release comp sales. Net sales at Nordstrom full-line stores rose 11% year over year and 3% from 2019, with the timing of the Anniversary Sale (in Q3 this year) contributing 300 basis points compared to 2019. Net sales at off-price Rack rose 35% year over year but fell 8% compared to 2019, the company said. Net income rose 20.8% year over year.
Macro headwinds are often actually tailwinds for off-price retailers — consumers flock to them for deals during economic downturns, for example. These days, inflation and lean supply at other retailers, which are leading to fewer markdowns, are sending shoppers to off-pricers’ below-retail price tags. Still, these retailers are not immune to the pressures plaguing the industry, including high freight costs and a choked supply chain. “While demand appears to be solid, the bigger concern for off-price retailers comes in terms of supply,” GlobalData Managing Director Neil Saunders said in emailed comments last week. “Here a lack of apparel inventory at other retailers, reduced manufacturing volumes by brands, and a pull back from off-price by some fashion labels are all combining to potentially create a perfect storm of crimping available product.”
In a letter to Target workers, CEO Brian Cornell announced that Target stores will stay closed on Thanksgiving Day moving forward, according to an excerpt emailed to Retail Dive. What was initially a temporary measure has now become permanent. Target was one of the retailers that closed stores on Thanksgiving back in 2020 due to the pandemic and, in January, Target said it would do the same this year. Cornell said the decision came after visiting several stores and hearing how the team was thankful to have stores closed on Thanksgiving. “You don’t have to wonder whether this is the last Thanksgiving you’ll spend with family and friends for a while, because Thanksgiving store hours are one thing we won’t ‘get back to’ when the pandemic finally subsides.”
Emerging Consumer Companies
TheDrop, a Las Vegas-based marketplace platform that aggregates and curates products targeted to the Millennial and Gen Z consumer, announced its Series A close of $4.6 million. Investors included Continental Investment Partners, Rimrock Venture Partners and previous angel and seed investors. The company has now raised $8.5 million in total. TheDrop aims to be the leading youth lifestyle marketplace platform that syncs with the trendiest streetwear, sneaker and skateboard brands and boutiques. Through its proprietary platform, TheDrop synchronizes the inventories of 300+ brands from the U.S., UK, Australia and Mexico, as well as over 30 of the top streetwear, sneaker, and skateboard shops from across the country.
WatchBox, a leading online destination for collectible luxury watches, announced that it has raised $165 million of equity capital. Lead investors The Radcliff Companies and The Spruce House Partnership were joined by CMIA Capital Partners as well as other existing investors. WatchBox will invest the capital to further scale its digital platform, expand into new markets, and enhance what is already the world’s most valuable and extensive inventory selection. Founded in 2017, the Philadelphia-based company aims to offer the largest collection of pristine condition luxury watches, authenticated, and backed by a global warranty. Members of the WatchBox collector community receive white- glove concierge service online or at any of our global locations in the US, Hong Kong, Singapore, Switzerland, and Dubai, with additional locations on the way.
Mosaic, maker of plant-based frozen meals, announced that it has raised $6 million. The investment was led by Gather Ventures with participation from Greycroft and Alleycorp. Mosaic will use the new capital to scale its core direct-to-consumer business, expand into offline channels, and launch new product lines. Founded in 2019, Mosaic launched with a line of veggie bowls that were home-cooked, packed with quality ingredients, and frozen to preserve freshness. The company is based in Brooklyn and operates a 16,000-square-foot kitchen in New Jersey.
Food & Beverage
Almost exactly one year after launching, Canada’s $100 million Telus Pollinator Fund for Good is expanding the number of “responsible agriculture” ventures in its portfolio with investments in Montreal-based beekeeping tech startup Nectar and Los Angeles alt-dairy company Goodmylk. This latest round of investments, which also includes Toronto-based healthtech startup Gotcare, brings Telus Pollinator Fund’s total number of portfolio companies to 10. Nectar and Goodmylk join Torontonian urban farming operation Fresh City Farms as the portfolio’s ag-focused startups. Canadian telecom giant Telus launched the Pollinator Fund in 2020 to drive more investment into early-stage startups building solutions for agriculture, healthcare, and inclusive communities. The fund looks for startups poised to have social and environmental impact while still being able to generate a financial return.
Animal-free dairy company New Culture Foods closed a $25 million Series A investment round, which the company said will help it make key hires and scale up production for a planned 2022 launch. The round was led by Ahren Innovation Capital and CPT Capital, and also includes ADM Ventures, Be8 Ventures, S2G Ventures, Future Ventures, Kraft Heinz venture arm Evolv Ventures, SOSV’s IndieBio, Bee Partners, Mayfield, Alumni Ventures Group and Bluestein Ventures. New Culture uses precision fermentation to make an animal-free casein protein, which gives cheese its trademark stretch. The company uses this casein to make animal-free mozzarella cheese, which it plans to launch as an ingredient at select pizzerias next year.
Plant-based meat alternative maker Sundial Foods raised $4 million in a seed funding round that included Nestle SA, Food Labs, Clear Current Capital, SOSV / IndieBio and others. Co-founded by Siwen Deng and Jessica Schwabach, the Albany, Calif.-based startup is developing chicken wing alternatives that feature plant-based skin, meat and bone. Featuring eight easy-to-recognize ingredients like water, chickpeas and sunflower oil, the wings are made without artificial flavors or synthetic chemicals, according to the company. They contain more fiber and less saturated fat than chicken but approximately the same amount of protein.
Grocery & Restaurants
MOD Pizza Inc. joined the growing parade of restaurant companies to announce plans to go public. The Seattle-based chain announced it has confidentially submitted a draft registration to the Securities and Exchange Commission for a proposed initial public offering of its common stock. Founded in 2008 by Scott and Ally Svenson, MOD — an acronym for Made On Demand — was one of the first in what was once a crowd of fast-casual pizza brands, where guests are invited to choose their toppings as they walk the line and pizzas are baked in minutes in an 800-degree oven. This year, the franchised brand surpassed 500 units. Over the years, the company has grown with the help of equity financing, including $160 million from Clayton, Dubilier & Rice in 2019. The pandemic year wasn’t kind to fast-casual pizza brands like MOD, which were initially built around an order-in-restaurants model. Earlier this year, MOD said it saw a 5% decline in systemwide sales to $461 million for fiscal 2020. But MOD last year added curbside to-go and third-party delivery, and invested in digital marketing and a loyalty program.
Fat Brands announced Monday the intention to acquire the 23-unit, Phoenix, Ariz.-based Native Grill & Wings for $20 million from purchase from Wingtime, LLC, a subsidiary of Cybeck Capital Partners, LLC. The deal, which is expected to be finalized in mid-December 2021, marks Fat Brands’ third wings concept (including Buffalo’s Café & Express and Hurricane Grill & Wings), and fourth acquisition in six months following the purchases of Global Franchise Group, Twin Peaks and Fazoli’s. According to a press release, once the acquisition is finalized, Fat Brands will oversee 2,300 franchised and corporate-owned stores globally with a combined annual system sale of about $2.3 billion. With the acquisition, Fat Brands intends to expand Native Grill & Wings into new markets, and already has new locations in development.
Home & Road
Franchise Group Inc. has completed the acquisition of W.S. Badcock Corp., a leading home furnishings company in the Southeast U.S., in an all cash transaction valued at approximately $580 million. Founded in 1904, W.S. Badcock Corp. operates 383 stores in eight Southeastern states, with 68 corporate locations and 315 independent dealer-owned stores. The stores are branded Badcock Home Furniture & more and carry furniture, appliances, bedding, electronics, home office equipment, accessories and seasonal items. Brian Kahn, president and CEO of Franchise Group, said, “A sincere thank you to the Badcock family for entrusting their 117-year legacy to Franchise Group. We are very excited to welcome the Badcock management team, employees, dealers and customers to Franchise Group.” Franchise Group is an owner and operator of franchised and franchisable businesses with brands including Pet Supplies Plus, American Freight, The Vitamin Shoppe, Badcock Home Furniture & more, Buddy’s Home Furnishings and Sylvan Learning.
Comvest Partners, an operationally-focused middle-market private investment firm, is pleased to announce a strategic investment in Renovation Brands, a multi-brand e-commerce platform of home improvement products. Renovation Brands becomes the third direct-to-consumer e-commerce company in Comvest’s private equity portfolio, and its sixth platform in a home-related category. In the transaction, Comvest partnered with Renovation Brands’ founder, Rick Morse; Digital Fuel Capital, a private investment firm and existing investor; and members of the management team. Financial terms were not disclosed. Founded in 2002, Renovation Brands is a pioneer in the online home improvement products sector. The company, led by Marc Sieger, Chief Executive Officer, operates a platform of 11 distinct e-commerce destinations spanning categories such as kitchen and bath, decorative finishes, and hearth and patio. Renovation Brands serves consumers as well as professionals, including builders, architects, designers, and property managers, in residential and commercial projects.
Jewelry & Luxury
Luxury goods companies don’t generate much digital revenue now, but that could change soon, according to a research note from Morgan Stanley that was published last week. Metaverse gaming and non-fungible tokens could represent a revenue opportunity of 50 billion euros for the luxury market by 2030, Morgan Stanley said. That would be 10% of the total addressable market. ”NFTs and social gaming present two near-term opportunities for luxury brands, allowing them to monetize their vast IP (intellectual property) built over decades,” the report says. Dolce & Gabbana’s sale of nine NFTs for $5.7 million last month shows the huge potential for “virtual and hybrid luxury goods,” and the bank estimates that the total NFT market will grow to around $300 billion by 2030.
Movado Group’s sales climbed double digits in the third quarter, exceeding pre-pandemic levels, and the company once again upped its fiscal guidance. Net sales in the third quarter were up 28 percent to $217.7 million, compared with $169.9 million in the previous year’s third quarter. The company saw strong growth across all channels, including online (both on its owned and wholesale customers’ websites), in Movado stores, and in wholesale customers’ brick-and-mortar stores. U.S. net sales surged 42 percent year-over-year, exceeding pre-pandemic fiscal 2020 sales by 8 percent. International sales were up 20 percent year-over-year and up 4 percent compared to pre-pandemic fiscal 2020.
Since the magazine’s launch in the 1930s, the term “Esquire” has become synonymous with the sophisticated, stylish man. Jared is borrowing some of that cache for its newest men’s jewelry collection. It’s called “estd. 1933 by Esquire” in honor of the magazine’s founding. The partnership, brokered by IMG, sees Jared collaborating with Esquire and SHR Jewelry Group, a company that works in licensing, product development, and brand building. The collection’s tagline is: “A collection for the curious, confident, and cultured.”
Office & Leisure
The world’s largest toy maker, Lego, had a huge first half of 2021: Consumer sales were up over 35% and operating profits “more than doubled,” the company said in September. Now, Lego is passing on some of that success to its over 20,000 employees: The company is giving staff three additional days off and annual bonuses “will get a top-up in April,” Bloomberg reported. Spokesperson Benjamin Hjorth told Bloomberg the move is intended as a token of appreciation for employees who have worked throughout “an extraordinary year” and during the coronavirus pandemic. Though many business sectors faced significant declines during lockdown, companies like Nintendo and The Lego Group experienced major sales spikes across the last 18 months. That’s due in part to major releases, like “Animal Crossing” from Nintendo, which spurred sales. But that sales success is primarily due to the nature of their businesses: With so many people stuck indoors, looking for something to do, playing video games and building Lego sets was more attractive than ever.
General Motors has taken a 25 percent stake in Pure Watercraft, a Seattle-based startup that makes electric outboard motors and batteries for boats, CNBC reports. The deal is worth $150 million, though that’s split between cash and payment-in-kind contributions from GM. The two companies didn’t tell CNBC what that split will look like, but GM “will become a supplier of components to Pure Watercraft, a co-developer of new products, and will provide engineering, design and manufacturing expertise to help [Pure Watercraft] establish new factories,” according to the report. GM struck a similar deal — though half the size — with Lordstown Motors in 2020 as part of that electric pickup truck startup’s merger with a special purpose acquisition company.
Northern Michigan’s local and independent bookstores are gearing up and asking customers to prepare for holiday shopping earlier than ever this year due to worldwide supply shortages. McLean and Eakin — as well as Saturn Booksellers in Gaylord and Between the Covers in Harbor Springs — prepared earlier than ever this year buying up stock of popular titles as far back as May and June to make sure they had books in stock. “To be candid, there are some items here and there that are running out. Certain book titles and a few games we have that have a more elaborate production are starting to run short already,” said Norcross. Between the Covers owner Katie Boeckl noted that they have been telling customers since early October to buy something if you see it.
Technology & Internet
Samsung is planning to build a $17 billion semiconductor factory in Taylor near Austin, Texas, over the next three years as part of an effort to increase its manufacturing capacity and alleviate the global chip shortage. The factory will aim to help boost production of advanced logic semiconductors, which are used in phones and computers. “Like other chipmakers, Samsung badly needs more capacity,” Glenn O’Donnell, vice president and research director at analyst firm Forrester, told CNBC Tuesday. “It is following Intel, TSMC and others to build more production.” Samsung said it expects building work to commence in the first half of 2022 and it hopes to have the site in operation by the second half of 2024. The total expected investment of $17 billion will be the largest investment Samsung has ever made in the U.S.
Best Buy has acquired Yardbird, a direct-to-consumer company that specializes in outdoor furniture. Founded my Minnesota natives Bob and Jay Dillon, Yardbird offers a selection of outdoor furniture, from dining sets and lounge seating to fire tables and accessories, with seven showrooms across the country. Best Buy added that one of the most exciting aspects of welcoming Yardbird into the Best Buy family is its commitment to sustainability. Best Buy will begin to sell Yardbird products online in the coming months. Yardbird will also continue to sell its own selection of outdoor furniture on Yardbird.com and in the company’s showrooms across the country. Founders Bob and Jay Dillon will also remain in leadership roles at Yardbird.
Finance & Economy
Traffic at retail stores on Black Friday dropped 28.3% compared with 2019 levels, as Americans shifted more of their spending online and kicked off their shopping earlier in the year, according to preliminary data from Sensormatic Solutions. Traffic was up 47.5% compared with year-ago levels, Sensormatic said. This time in 2020, many shoppers stayed at home due to fears around the coronavirus pandemic and as retailers operated on somewhat reduced hours. Black Friday is still predicted to be the busiest in-store shopping day of the season, according to Sensormatic.
U.S. business activity slowed moderately in November amid labor shortages and raw material delays, contributing to prices continuing to soar halfway through the fourth quarter. Data firm IHS Markit said its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to a reading of 56.5 in mid-November from 57.6 in October. A reading above 50 indicates growth in the private sector. The rate of growth remains above the survey’s long-run pre-pandemic average, and is consistent with an economy that is regaining steam after a brief lull in the summer. The services sector accounted for the pull back in activity, with IHS Market noting “some resistance to higher prices.”
The ranks of those submitting jobless claims tumbled to their lowest level in more than 52 years last week, the Labor Department reported. New filings totaled 199,000, a number not seen since Nov. 15, 1969, when claims totaled 197,000. The report easily beat Dow Jones estimates of 260,000 and was well below the previous week’s 270,000. The Labor Department did not indicate any special factors that caused the stunning fall, which could provide an important signal about a jobs market that has been struggling to come back since the Covid-19 shock in March 2020. Along with the drop in weekly claims, continuing claims, which run a week behind, fell by 60,000 to 2.05 million, a fresh pandemic-era low and a strong sign that the labor market is getting notably tighter.