As the end of 2022 approaches, it is an appropriate time to wonder how the year will be remembered. However, 2022 has been such a volatile year, it will be hard to define. Was 2022 the year that crypto currencies gained legitimacy and entered the mainstream? Or was it the year that the face of crypto ended up in a Bahamian jail cell and the entire market teetered on irrelevance? The answer to both questions is yes, depending upon whether you were looking at Q1 2022 or Q4 2022. Was 2022 the year that superstar Tom Brady retired from football to spend more time with his supermodel wife, or was it the year Tom was a bachelor in Tampa, still playing football but trying to sneak his way into the playoffs? The answer is yes and yes.
A lot can happen over the course of a year. It may be hard to remember, but COVID was still dominating the headlines at the start of 2022. January 2022 saw 84,000 COVID deaths in the U.S., the third highest monthly total since the pandemic began. By November 2022, COVID deaths had dropped by 90%, to 7,300.
In the retail/consumer market, the first part of 2022 was all about shipping delays and empty store shelves, as COVID snarled the supply chain and left retailers starved for product. The second half of the year saw retailers swamped with inventory and distribution centers bursting with goods. Early 2022 saw the global container freight index spike to over $10,000 per container, only to see container prices drop almost as dramatically down to $2,000 per container several months later. Companies struggling with supply chain uncertainty and highly volatile freight costs tried to pass costs on to the consumer, helping to fuel record inflation rates.
In early 2022, consumers, who had just emerged from two years of COVID restrictions, were geared up and ready to spend, but anxiety about inflation helped dampen shopper enthusiasm. Gas prices went from $3.38 per gallon in January to over $5.00 per gallon in early summer (an all-time high), and then back down to $3.35 per gallon currently. In response to inflation worries, the Federal Reserve has continued to raise interest rates throughout the year. The current 30-year mortgage rate of 6.33% is more than double where it stood at the beginning of 2022.
Given the volatility of macroeconomic factors, it is not surprising that experts are concerned about how the American consumer will fare in 2023. It is not clear if inflationary pressure and high interest rates will cause consumers to tighten their purse strings in 2023, or if a strong job market and low unemployment rates will be enough to keep consumers spending.
Wall Street seems to think that consumers will be cautious heading into 2023. While the stock market in general has been down in 2022, consumer stocks have slightly underperformed the overall market. The S&P 500 Index is down 16.2% year-to-date, while the Consumer Discretionary index is down 19.0% over the same period.
As we have learned from 2022 (and the prior two years), a lot can change over twelve months. However, even with all of the uncertainty in the world today, a couple of things are undeniable: American consumers love to spend, and Tom Brady loves to sling the football. I would bet that both will be doing what they love as much as possible in 2023, and probably beyond.
Apparel & Footwear
Gordon Brothers Sells Orsay Women’s Brand
Gordon Brothers has sold the Orsay women’s brand, archives, related trademarks and other intellectual property to a private investor from the Czech Republic operating under Orsay International. The deal, revealed Thursday, comes just fourth months after Gordon Brothers, the Boston-based advisory, restructuring and investment firm, bought Orsay from Orsay GmbH. According to Gordon Brothers, the private investor will continue to invest in the Orsay fashion brand and work to grow its presence in Europe online, in stores and with existing franchisees. Gordon Brothers streamlined Orsay’s operations and “created a nimble team, restructured the brand, optimized the product offering, strengthened and expanded franchisees, and invested in marketing to grow Orsay’s e-commerce channels,” Gordon Brothers said in its announcement. The purchase price was not revealed.
Esprit CEO on the Flagship Strategy for North America
Esprit, pivoting from its California roots to become New York-centric, is developing a “global flagship” that, if all goes well, would open on Fifth Avenue next year or 2024. Additionally, “regional” flagships are seen opening next year in Los Angeles, Miami, Chicago, Toronto and Vancouver, which would be followed by smaller stores around the U.S. On Wednesday, Esprit’s CEO William Pak was in New York City for meetings and to check out the Esprit pop-up opening Thursday at 123 Prince Street in SoHo. Esprit also has a pop-up operating in Los Angeles, where the brand’s permanent store (at 143 South Robertson Boulevard) will open. It’s the first since the brand shut all 93 of its U.S. stores 10 years ago. The permanent Los Angeles flagship is seen opening in the first quarter of 2023 while the Toronto and Vancouver stores will bow in a similar time frame to New York City, about a year from now.
Lanvin Group’s Roller-coaster Wall Street Introduction
The Lanvin Group jumped onto the Wall Street roller coaster on Thursday — shooting up and then plunging down in its first day of trading — giving chairman and chief executive officer Joann Cheng a higher profile and a fresh start as she pushes growth at the luxury house. Trading under the “LANV” ticker symbol, the stock shot up more than 130 percent to $22.81, but the run-up was short-lived and the stock reversed course dramatically, falling by as much as 53 percent. Lanvin shares closed down 25.6 percent to $7.37 — a sign of the mixed-up times on Wall Street. In an interview, conducted shortly after Cheng rang the exchange’s famous opening bell and while the stock was still rushing higher, the executive told WWD the company was getting a new start and had lots of growth potential. “We raised more than $150 million in fresh cash,” she said. “So it’s enough for our operations, for the current brands to move towards profitability.”
Loro Piana Takes Legal Action to Protect White Sole Shoes
Imitation may be the sincerest form of flattery, but Loro Piana is now speaking up and fighting to protect its intellectual property. The Italian luxury brand said it is “taking specific legal action against those who attempt to undermine the iconic nature“ of its White Sole shoes. First launched in 2005 as sailing boat shoes, their popularity, relying on comfort and lightness, turned them into everyday, urban footwear. “Over time, White Sole shoes have become a distinctive mark of the maison, and it is precisely for this reason that Loro Piana is committed to defending its brand heritage,” said the company in a statement seen by WWD. Loro Piana is controlled by LVMH Moët Hennessy Louis Vuitton, and last year it appointed Dior executive Damien Bertrand as its new chief executive officer. The Italian brand is known for its luxury fabrics and quiet chic, and has been increasingly expanding its lifestyle range. Founded in 1924 and based in Quarona, Italy, Loro Piana is billed as the largest cashmere manufacturer and the biggest single purchaser of the world’s finest wools.
Athletic & Sporting Goods
Telemos Capital to acquire majority stake in Vittoria
Telemos Capital has announced the signing of a binding agreement to acquire a majority stake in Vittoria. Telemos will invest alongside Vittoria’s senior management team and Wise Equity, aiming to build on the company’s leadership position in performance tyres and accelerate Vittoria’s growth globally. Founded in 1953, Vittoria produces bicycle tyres and is based in Brembate, Italy. Since Wise’s investment in 2020, the business has grown, led by group chairman and CEO Stijn Vriends, who together with the current senior management team will reinvest and will continue to drive Vittoria’s ‘The Ride Ahead’ strategy. With the backing of Telemos, Vittoria said it will accelerate its plans for international expansion and further development of its products, services and channels. Vittoria will continue to invest in sustainability, innovation and research and development, building upon its manufacturing facilities as well as its recently inaugurated Vittoria Park, a unique cycling innovation and experience venue.
Precor Undergoes Leadership Changes In Peloton Realignment
Precor reported it was repositioned as a wholly-owned subsidiary under Peloton, led by Dustin Grosz, the fitness equipment maker’s interim CEO. As part of the transition, Betsy Webb will step down as vice president of Peloton Commercial, which had supported the Precor subsidiary, effective January 6, 2023. Grosz, a fitness industry veteran of 30 years, most recently guided the restructuring of Core Health and Fitness. Before that, he was president and CEO of StairMaster. Grosz also held various positions while working at Nautilus, Inc. for seventeen years.
VF Could Divest Backpack Brand JanSport
VF Corporation is considering selling its backpack brand JanSport, Bloomberg reported citing people familiar with the matter. The report highlighted that a potential deal might value JanSport at about $500 million. This comes when the apparel, footwear, and accessories company is struggling to lift sales. In Q2, VFC’s top line fell by 4% (up 2% in constant currency), with its big four brands (including Vans, The North Face, Timberland, and Dickies) reporting a decline of 5% (up 1% in constant dollars). While the company increased prices to offset higher costs, weak sales and increased promotional activity to boost the top line took a toll on its margins.
Cosmetics & Pharmacy
LVMH’s Shifting Cha Ling Strategy Illustrates Foreign Brand Challenges in China
In 2016, LVMH founded Cha Ling, a China-first luxury beauty brand built around the power of traditional Chinese medicine and tea. The brand just announced that it has closed all of its physical retail shops, as well as its Wechat store, as detailed in an interesting review by Jing Daily. The move comes amid COVID-19-related challenges for China’s retail sector. Moving forward, Cha Ling will be sold at LVMH’s Sephora, which has added new stores in the market. LVMH acknowledged the challenges in its Q3 2023 financial report, which noted, “Asia (including China) saw a lower level of growth over the first nine months of 2022, though growth in the latest quarter accelerated there due to the partial easing of health restrictions.” The Jing Daily report omits discussion of the pandemic as a factor in the move, but does cite Chinese shoppers’ skepticism of Western brands tapping traditional and local approaches to beauty. This skepticism has benefited locally born brands. LVMH isn’t alone. Jing Daily points out that foreign brands like Maybelline have announced forthcoming store closures.
Skincare Service Brand Heyday Announces $12 Million Series B Extension
Heyday, a fast-growing skincare services provider, has announced a $12 million Series B extension led by existing investor, Level 5 Capital Partners (L5). The funding comes nearly two years after its initial $20 million Series B. With this capital injection, Heyday says it plans to invest in franchise expansion and innovation in-person and online. The company will also expand into skincare products. Since its founding in 2015, Heyday has performed more than 650,000 facials through its 10-plus owned and operated shop locations throughout New York City, Los Angeles, and Philadelphia. Heyday plans to open more than 30 shops in 2023, with a total of 135 committed franchise units on the horizon in major markets including Denver, Boston, Austin, Phoenix and others.
Prima Acquires Prospect Farms & Forms Uplifter Brands, Doubling Down on Cannabinoids
Prima has acquired Prospect Farms to form Uplifter Brands, PBC, a CPG house of clean and conscious brands across personal care, supplements, spa and hospitality, private label, and pet wellness. The move is a bet on the future of cannabinoids across categories. The acquisition gives Prima ownership of Prospect Farms, one of the nation’s largest USDA-certified organic hemp farms and manufacturing complexes. Uplifter Brands unifies Prima’s products; national distribution at Sephora and The Vitamin Shoppe; and Prospect Farms’ raw material cultivation and manufacturing capabilities. Uplifter Brands’ next company, launching early 2023, will target the pet health category and will feature actress, model and advocate Brooke Shields as the chief brand officer.
Discounters & Department Stores
Walmart launches Text to Shop functionality
After testing the feature last year, Walmart has launched a free Text to Shop functionality for iOS and Android users, according to a Wednesday blog post from Vice President of Conversational Commerce at Store No. 8 Dominique Essig. Store No. 8 is Walmart’s retail startup incubator, which launched its first project in 2017. Connected to a user’s Walmart account, the Text to Shop function knows what a customer’s usual items are. Shoppers can text the name of a general item — such as “cereal” — and the retailer will add the brand and type typically ordered to the user’s cart, allowing shoppers to swap it, change the quantity or remove it. Walmart’s Text to Shop function also allows shoppers to check out their carts via text or in the Walmart app. Customers can also schedule a time for pickup or use delivery.
How Walmart is pursuing omnichannel profitability
As Walmart’s business model evolves, a focus on omnichannel strategy is the thread tying together its e-commerce business, fulfillment services, advertising and more, Walmart President and CEO Doug McMillon said at Morgan Stanley’s Global Consumer & Retail Conference on Wednesday. Walmart hasn’t been shy about touting its omnichannel efforts and why catering to meet shoppers’ needs across in-store and online channels can boost profitability. “We’ve shared before — if people buy in-store and online with Walmart.com, they generally spend twice as much and they shop in-store more often,” McMillon said.
Lord & Taylor is latest to set up retail media network
Lord & Taylor is partnering with InMobi Commerce to set up a retail advertising network, the martech company said in a release. The media network will be a full-funnel platform that will include shoppable videos that will link product discovery from social platforms back to Lord & Taylor’s owned channels. Lord & Taylor’s addition of a media network comes as the digital retailer is looking to broaden its consumer base by expanding into home, accessories, travel and beauty categories in a bid to provide “obtainable luxury” for shoppers.
Emerging Consumer Companies
Cabinet Health has announced it has raised $17 million in growth funding led by Global Impact Fund with participation from other mission-driven investors including Natureza and Unreasonable Group. This fundraise brings the company’s total funding to $23.6 million to date. The company plans to utilize the fundraise to expand into new categories including prescriptions and retail channels. Cabinet Health remade traditional pill bottle packaging to offer customers the first low-waste solution free of single-use plastics. The brand’s system features elevated glass bottles that can be reused infinitely, along with its patented compostable pill packages that are made out of 100 percent compostable materials and are city-compost friendly. The company’s model has worked as Cabinet Health generated an average of 110 percent growth year-over-year with its over-the-counter offerings, which include cold and flu, allergy, digestion, pain, and sleep. This growth is only expected to accelerate in 2023 with more retail partnerships to come.
Babylist to launch new offering, Babylist Health, through acquisition of SourceMD
Babylist, the Oakland-based baby registry business, acquired medical equipment supplier SourceMD and is launching a new business called Babylist Health. The acquisition of SourceMD, which provides breast milk pumps that can be paid for with health insurance, opens up a whole new market for Babylist as it can now access the broader global mother and child health care market. The acquisition sped up Babylist’s efforts to enter this market by more than 18 months. Babylist currently has 3 lines of business: directing users to third-party retailers via its registry, for which Babylist collects a fee, providing content for parents about them and their babies and the third is directly selling products to customers as a specialty retailer. It remains to be seen how Babylist Health will fit into these 3 lines of business. However, it is expected to only be additive to the business, which did more than $240 million last year in revenue and is growing double-digits this year.
Food & Beverage
NotCo raises $70M to make its AI available to other companies
Artificial intelligence food tech company NotCo will use a $70 million Series D1 investment round to create a new B2B platform. The round was led by Princeville Capital. Other investors include Bezos Expeditions, Tiger Global and L Catterton. NotCo’s Giuseppe platform helps the Chilean company discover which plant-based ingredients to use for an end product with a taste, appearance and behavior most like the traditional foods they are replacing.
Functional soda Poppi raises $25M
Prebiotic soda brand Poppi raised $25 million in new financing led by Cavu Consumer Partners, the beverage brand said in a statement. During the past year, the brand experienced a 148% increase in overall revenue and a 250% increase in online sales. The growth being exhibited by Poppi, Olipop and Wave Soda, among others in the category, has attracted the interest of outside investors eager to put their money to work. Poppi’s latest haul comes just over a year after it raised $13.5 million, with celebrity investors a major part of the fundraising round. Functional soda brand Olipop closed a $30 million Series B funding round earlier this year.
Chr. Hansen will merge with Novozymes in a $12.3B deal
There have been several mega-mergers in the food ingredients space in recent years as companies want to add to their capabilities and reach. This latest deal between Novozymes and Chr. Hansen doesn’t just create a huge player in the ingredients space, but it would also be the largest merger in Danish history. The new company would occupy an outsized place in the biotech ingredients market. The combined company is expected to have annual revenues of 3.5 billion euros ($3.72 billion). It also will have 38 R&D and application centers around the world, 23 global manufacturing sites and more than 10,000 employees. While both Novozymes and Chr. Hansen work in industries other than food ingredients, about half of the combined company’s portfolio will be focused on “enabling healthier lives and producing better foods,” the statement announcing the merger said.
Flowers Foods buys Papa Pita Bakery for undisclosed amount
In 2020, Flowers President and CEO Ryals McMullian set priorities for the company to grow: Expanding the reach of its branded products, and looking for M&A opportunities in grain-based foods. The two years since have seen Flowers make progress in meeting these targets, and the purchase of Papa Pita builds on that momentum. Flowers is adding a suite of well-known regional brands to its portfolio — including Papa Pita, Great Grains, Bubba’s Bagels and Maya’s Tortillas. It also gets a manufacturing hub and distribution network in the Western U.S., where it currently has fewer bakeries. In a statement, McMullian said Papa Pita’s beginnings as a family business and its skill at execution made it attractive to Flowers. Prior to the acquisition, Flowers partnered with Papa Pita as a co-manufacturer.
Grocery & Restaurants
Darden Q2 2023 earnings: Olive Garden parent raises outlook
Darden Restaurants on Friday reported quarterly earnings and revenue that beat Wall Street’s expectations, as consumers continued to eat out despite pressure from inflation. The company also raised its earnings outlook for fiscal 2023 to a range of $10.3 billion to $10.45 billion from its previous range of $10.2 billion to $10.4 billion. Shares of Darden fell more than 3% amid broader market losses Friday. Darden’s total sales rose 9.4% compared with the same quarter last year. Darden also said its total expenses jumped to $2.25 billion from $2.03 billion a year earlier, driven primarily by higher costs for dairy, grains and produce. The company also cited construction and labor costs as reasons for the jump in expenses. CEO Rick Cardenas said in the company’s earnings release he’s pleased with the company’s results during the quarter and said all of their brands “performed at a high level,” saying that the company “surpassed $10 billion in sales on a trailing 52-week basis for the first time in Darden’s history.”
The biggest takeaways from Yum Brands’ Investor Day
Yum Brands, parent company of KFC, Taco Bell, Pizza Hut and The Habit Burger Grill, held its annual investor day Tuesday in New York City and it’s hard to imagine a more confident company right now. Executives touted their diverse portfolio and scale as providing a major advantage against a relentlessly uncertain economic backdrop and presented several examples to support their case. Here are some of the biggest takeaways from the presentation.
Home & Road
Three key takeaways from Hooker Furnishings’ Q3 earnings report
Hooker Furnishings had a strong third quarter, reporting $151.6 million in sales, a 13.6% increase over the same period last year. The company reported optimism in its recent earnings report, with many pandemic-related issues easing. Here are three takeaways:
Sears Hometown files for bankruptcy amid disputes with ‘new Sears’
Sears Hometown Stores, a home goods-focused offshoot of the failed retail giant, on Monday filed for Chapter 11 bankruptcy in Delaware. The company has less than $50 million in assets, but $50 million to $100 million in liabilities, per court documents. The chain, including locations run by independent dealers, has about 121 stores in 26 states and Puerto Rico, down from nearly 500 when TransformCo, also known as “new Sears,” reacquired it. Sears Hometown relies “substantially on TransformCo to provide key products and services,” and the bankruptcy is necessary in part because TransformCo failed to do so, according to a court filing from Sears Hometown CEO Elissa Robertson.
Luxury furniture maker RH acquires two companies
Luxury furniture retailer RH has acquired two trade-based furniture companies: custom upholstery business Dmitriy & Co. and custom furniture company Jeup, Inc. The company has created two new businesses, RH Bespoke Furniture and RH Couture Upholstery, in conjunction with the acquisitions, according to a company press release. Dmitriy founders Donna and David Feldman, and Jeup owner Joseph Jeup, will join RH. A company spokesperson declined to specify what roles they would hold. Margaret Russell, a former Architectural Digest editor, will also join the company to lead RH Media, a new editorial content platform that highlights design innovation and influencers.
Jewelry & Luxury
Lab-Grown Diamond Company Adamas One Goes Public With $11 Million IPO
Lab-grown diamond company Adamas One went public on Dec. 9, with an initial public offering valued at $11 million. That was significantly below its initial hope of raising up to $30 million. The stock now trades on Nasdaq under the ticker “JEWL.” Adamas’ shares were originally priced at $4.50. The day after its debut, the stock briefly rose to $11.94, though at the time of publication it was trading at $4.75 a share. The Nevada-based company’s prospectus contained a “going concern” warning, noting that it has an accumulated $30.2 million in debt as of Sept. 30.
Breitling Plans IPO As Ownership Shifts: Report
Breitling has a new private equity owner, as the company plans to go public on the Swiss stock exchange in 2027, according to anonymously sourced reports in Bloomberg and finews.com. According to the reports, Partners Group Holding plans to increase its stake in Breitling from 23% to 50%. Meanwhile, its current owner, CVC Capital Partners, is decreasing its current majority holding to about 23.6%, the reports said—with management and other investors holding the rest. The deal reportedly values the Swiss watchmaker at $4.2 billion Swiss francs, or $4.5 billion. CVC first purchased an 80% stake in Breitling in 2017. Shortly after, Georges Kern, who then headed Richemont’s watchmaking division, became its CEO. In 2021, Partners Group purchased a “significant minority stake” in the watchmaker, which was then reportedly valued at $3.3 billion. That deal was accompanied by the first public rumblings of an eventual IPO.
Pandora Moves North American Headquarters To New York City
Beginning early next year, Pandora will move its North American headquarters to New York City from its longtime headquarters in Baltimore. The new headquarters will span more than 27,000 square feet on the 35th floor of 1540 Broadway in Times Square. The company signed a 15-year lease for the space, at a rent of $82 per square foot, sources told the New York Post. Pandora opened a temporary location at 1540 Broadway, formerly called the Bertelsmann Building, in September. Pandora plans to keep its current Baltimore corporate office at 250 W. Pratt Street through at least 2026. That office and the brand’s logistics center in Columbia, Md., “will remain integral to business operations,” the company said.
Office & Leisure
Penguin Random House boss resigns after Simon & Schuster deal fails
The head of publishing giant Penguin Random House has resigned, citing the US decision to block the firm’s $2.2bn takeover of rival Simon & Schuster. Markus Dohle will step down at the end of the year, the company said, adding that he was parting at “his own request and on the best of mutual terms”. Mr Dohle had led Penguin since 2013, when it emerged from another big merger as the world’s largest book publisher. Competition concerns scuttled the Simon & Schuster acquisition. A US judge ruled in favour of the US government, which had attempted to block the merger, arguing that the tie-up would reduce pay and opportunities for writers. The company will continue to pursue smaller acquisitions, including in the US, Penguin’s German owner Bertelsmann told Reuters. Penguin’s current US boss, Nihar Malaviya, will serve as interim chief executive from 1 January.
Joann reports third quarter loss, suspends dividend
Joann on Monday reported $562.8 million in Q3 net sales, a 7.9% decline. The crafts retailer swung to a $17.5 million loss from $22.8 million in net income during the same quarter last year. In an effort to improve its liquidity and balance sheet, Joann said it is suspending quarterly dividend payments “to increase liquidity and overall financial flexibility.” Scott Sekella, most recently vice president of corporate financial planning and analysis at Under Armour, joined the company as chief financial officer in September. Previously he served as VP and global controller at Crocs Inc., and as a finance supervisor at Ford Motor Co. In a Monday earnings call, Joann’s CEO Wade Miquelon said that while Halloween was a third-quarter sales bright spot, “overall, we were disappointed.” Sales of Halloween items were up 8% in the quarter. Partly in response, Joann aims to achieve $200 million in cost savings by fiscal 2025 by reducing supply chain, product, overhead and operating expenses.
AMI Announces Sale to Coral Tree Partners from The Gores Group
AMI Entertainment Network, a leading digital jukebox business that provides tech-driven in-venue digital music and video entertainment and advertising content to the bar and restaurant industries, announced that it has been acquired by Coral Tree Partners, a Los Angeles-based media and entertainment focused private equity firm, from The Gores Group, LLC, a global investment firm. Founded in 1909 under the name National Automatic Music Co., AMI has been deeply ingrained in the bar and restaurant entertainment industry for more than a century. Today, AMI operates a network of over 30,000 digital jukeboxes and video systems, delivering music, video and advertising content to patrons in venues throughout North America and the United Kingdom. AMI is headquartered in Grand Rapids, MI with additional offices in Chicago and the United Kingdom.
Build-A-Bear Workshop creates gamified metaverse experience
Build-A-Bear Workshop Inc. is letting customers develop their own virtual worlds on a popular immersive gaming platform. The specialty retailer is working with content creators Gamefam to launch a metaverse experience called “Build-A-Bear Tycoon” within the Roblox virtual gaming environment. Build-A-Bear Tycoon is not the first step into gaming and virtual play for the Build-A-Bear brand, as the company previously offered an interactive game called “Bearville” (which was shut down in 2015), but does mark the retailer’s initial entry into the metaverse and Roblox. Beginning Wednesday, Dec. 14, customers will be able to join Build-A-Bear Tycoon on Roblox across Android, iOS, Mac, Windows PC, and Xbox One devices. In Build-A-Bear Tycoon, users can select, stuff, and personalize a virtual bear, build their own digital workshop, and explore an immersive metaverse environment. St. Louis-based Build-A-Bear Workshop Inc. operates nearly 500 interactive brick-and-mortar retail locations and several online sites. In addition, its Build-A-Bear Entertainment subsidiary creates interactive content, while the company also offers products at wholesale and in non-plush consumer categories via licensing agreements with manufacturers.
Technology & Internet
Amazon workers will go on formal strike for the first time in the UK
Hundreds of Amazon workers will go on strike, Britain’s GMB union said Friday, marking a first for the company’s employees in the U.K. Employees at Amazon’s Coventry warehouse in central England voted Friday to go on strike, with the walkout likely to happen in January 2023. Roughly 1,000 people work at the Coventry facility. The workers are unhappy with a pay increase of 3%, or 50 pence per hour, Amazon introduced in the summer, which they say fails to match the rising cost of living. They want Amazon to pay a minimum of £15 an hour. Inflation has soared due to increased energy costs and supply chain disruptions, with consumer prices currently at a 41-year high. The Bank of England hiked interest rates on Thursday in an effort to slow inflation. Though Amazon workers in the U.K. have previously stopped working in August and on Black Friday in November in protest over the summer pay increase, these were spontaneous, unsanctioned withdrawals of labor.
Roblox stock sinks after November update shows slowing growth
Shares of Roblox closed down 15.7% on Thursday after the gaming company released a November business update that showed slowing growth and a decline in how much it earns from its daily users. The company said estimated bookings were between $222 million and $225 million for the month. That’s up 5% to 7% year over year. But, in November 2021, Roblox said estimated bookings during the same period grew 22% to 24% year over year. Roblox said the strength of the U.S. dollar against the euro and British pound impacted its business. Roblox calls its revenue figure bookings. The company generates revenue from sales of its virtual currency called Robux, which players use to dress up their avatars and buy other premium features in the games. Roblox’s average bookings per daily active user were between $3.92 and $3.97, down 7% to 9% from a year ago. Overall daily active users rose 15% from November 2021 to 56.7 million users but, last year, the company reported 35% growth. Roblox’s update comes amid broader weakness in the video gaming industry. Last month, Take-Two Interactive, the company behind games such as Grand Theft Auto, cut its outlook in the current quarter and for fiscal 2023, blaming “current macroeconomic conditions.”
Finance & Economy
Retail sales fell 0.6% in November as consumers feel the pressure from inflation
Consumers pulled back on spending in November, failing to keep up with even a muted level of inflation for the month, the Commerce Department reported. Retail sales for the month declined 0.6%, even worse than the Dow Jones estimate for a 0.3% drop. The number is not adjusted for inflation as gauged by the Labor Department’s consumer price index, which increased 0.1% in November, which also was below expectations. Measures that exclude both autos and gas sales both showed 0.2% declines. The pullback was widespread across categories. Furniture and home furnishings stores reported a decrease of 2.6%, building materials and garden centers were off 2.5% and motor vehicle and parts dealers dropped 2.3%.
U.S. consumer loan delinquencies seen surging to 13-year high in 2023
U.S. consumers will fall behind on their personal loan and credit card payments next year at the highest rates since 2010, according to forecasts from TransUnion, a major consumer credit rating agency. Surging loan delinquencies will follow a year in which consumers loaded up on credit, TransUnion said. Americans took out a record 87.5 million in new credit cards and 22.1 million in personal loans in 2022, the report showed. Consumers face significant financial challenges, including “rapidly increasing interest rates and stubbornly high inflation combined with recession fears,” said Michele Raneri, head of U.S. research and consulting at TransUnion. Despite the economic slowdown, more than half of the 2,800 Americans polled were optimistic about their finances for the next 12 months, TransUnion said. The youngest generations expressed the most confidence.
