Allbirds, the San Francisco-based footwear brand, started with relatively humble beginnings. It launched with one shoe – the Wool Runner – on March 1st, 2016. The shoe was available in five colors and only available online. The company’s aim was to provide comfortable and environmentally friendly footwear. In the four and a half years since, Allbirds has achieved remarkable success, building a brand and business unlike any of its peers. 2020 has illustrated that in no uncertain terms. The company is capping off a year of growth and success not elsewhere seen in the space.
Last week, Allbirds introduced its debut apparel collection for men and women – a narrow line of one t-shirt, one sweater, one cardigan, and one jacket. While the assortment is limited, it is yet another example of Allbirds methodically inching deeper into the lives of its customers, and doing so both meaningfully and significantly. The introduction of apparel marks the end of a year-long period for Allbirds that has been characterized by innovation and evolution.
A year ago, Allbirds launched socks. Not just socks, of course, but socks made from Allbirds’ proprietary Trino material, a blend of merino wool and eucalyptus tree fabrics. One sock, made in three different lengths, available in six colors.
In April, as Earth Day approached, Allbirds became the first fashion brand to label its products by their carbon emissions. The company introduced a Life Cycle Assessment tool, which is designed to measure each product’s environmental impact, and Allbirds encouraged other brands to do the same – to label their goods with a carbon footprint measure, similar to how food products include the nutritional value on their box.
In May, Allbirds announced a partnership with Adidas – a seemingly unusual collaboration between the upstart and the industry powerhouse to create a sneaker with little to no carbon impact. In June, Allbirds introduced a line of underwear – again, not just underwear, but moisture-wicking, breathable underwear made from Allbirds’ proprietary Trino material.
In September, Allbirds launched a stand-alone app, which will host exclusive product drops and offer virtual try-on features, discounts, and coupon codes. It also announced that it had raised a $100 million Series E.
Over the course of the year, Allbirds continued to open new stores – including San Diego, San Francisco, Georgetown, and Philadelphia. Now, Allbirds has launched apparel.
In keeping with the company’s commitment to sustainability, the products have a low carbon footprint and are made with more environmentally-friendly materials. It signals that Allbirds has arrived as a full-scale lifestyle brand, with a strong brand foundation, a differentiated market position, and breadth across product categories.
Co-founder Joey Zwillinger recently commented “We knew we wanted to be a real brand, and had this vision that we’d be an innovation company first, and a product company second. And our products would solve problems for people in a natural way, and show the world that you don’t have to compromise on the planet for amazing products.”
Allbirds’ path, execution, and success set it apart from nearly every other brand in the space. That it has been able to continue its growth and build its momentum during a global pandemic underscores its unique strength, as well as its bright future.
Headlines of the Week
Lenox acquired by affiliate of private investment firm
Lenox has been purchased by an affiliate of Centre Lane Partners LLC, a New York-based private investment firm. The deal includes namesake Lenox brand as well as Dansk and Reed & Barton, a release said. Centre Lane is a private investment firm that invests in the equity and debt of middle market companies in North America. Through its various affiliates, Centre Lane also has investments in such consumer brands as Oneida, Anchor Hocking and Candle-lite. “We are delighted to join the Centre Lane Partners family,” said Mads Ryder, CEO, Lenox Corporation. “We have spent the last 18 to 24 months shaping our operational platform for growth. We have invested in branding and strengthened our e-commerce capabilities and, with the support of Centre Lane, we are looking forward to building on the vision that has made Lenox so unique since its founding in 1889.” “We are very pleased to be investing in Lenox Corporation,” said Mayank Singh, a Centre Lane managing director involved with the deal. “The company’s brands are synonymous with tabletop. Lenox leads the industry in quality, design and innovation and we look forward to partnering with management to participate in the next phase of Lenox’s transformation and growth.”
BC Partners to Split PetSmart, Chewy in $6 Billion Recap Deal
Three years after saddling PetSmart Inc. with debt to acquire online rival Chewy Inc., a group led by private equity firm BC Partners is splitting them in two, betting that the companies will be better off on their own. The group plans to recapitalize PetSmart with $1.3 billion of equity and $4.65 billion of debt raised from institutional money managers, according to credit grading firms and documents released to investors. All of PetSmart’s remaining shares in Chewy will be distributed to the BC Partners-led group, which will operate the fast-growing but unprofitable online retailer as a wholly separate business. The new structure will result in a smaller debt load relative to earnings as well as longer maturities for PetSmart, which will continue to focus on its brick-and-mortar locations. Both companies have performed well during the pandemic amid a surge in pet adoption and as consumers gravitate toward home-related products. Government-mandated shutdowns have also accelerated a shift to online shopping, benefiting companies like Chewy at the expense of traditional retailers.
Apparel & Footwear
Ascena Retail gets much higher bid for Justice
Justice has a new suitor. Bluestar Alliance, whose brand portfolio includes Hurley, bebe, Tahari, Brookstone, Limited Too and others, has become the new stalking horse bidder for Ascena Retail’s tween brand Justice. Bluestar’s bid is valued in excess of $60 million, and consists of $44 million in cash. It includes the intellectual property and related assets as well as assumption of certain liabilities. The Bluestar offer overtakes Premier Brand’s bid of $35 million for Justice. Ascena Retail, which filed for bankruptcy in July, has shuttered roughly 600 of Justice’s 820 stores. It recently filed for 85 additional closures, according to court documents. Bluestar said it believes that the Justice brand will fit perfectly within its existing brand portfolio.
Gap Inc. announces store closures, off-mall strategy
Gap Inc. is moving away from the mall. The struggling apparel giant revealed its strategy to return the company to profitable growth at its virtual investor meeting on Thursday. The strategy emphasizes expanding its higher-profit Old Navy and Athleta brands, tweaking and reducing product assortments and reducing and rethinking its store footprint in a move away from traditional shopping malls. Gap Inc., a longtime mainstay of U.S. mall retailing, expects to close approximately 30% of its Gap and Banana Republic stores in North America by the end of fiscal 2023 (early 2024), with about 75% of the closures to be completed by the end of fiscal year 2021. All told, the retailer is closing some 350 stores. The company said it is moving to a business model that is driven by e-commerce and off-mall locations. It expects about 80% of its namesake stores to be outside of malls within three years. Currently, mall stores account for 32% of Gap Inc.’s total sales, with street locations accounting for 8%; and strip and lifestyle centers accounting for 35%. Online makes up 24% of total sales.
True Religion exits bankruptcy
True Religion has officially exited Chapter 11 bankruptcy. CEO Michael Buckley said in a press release that the in-court restructuring “allowed the company to reduce its operating costs and lower its debt load, and emerge a profitable, lean operating company with a healthy balance sheet.” Backing the denim specialist’s reorganization were lender and equity holder Farmstead Capital Management, as well as Crystal Financial, another lender, and landlord Simon Property Group, True Religion said. True Religion filed for bankruptcy in April after it temporarily closed its footprint amid the COVID-19 pandemic. Founded in 2002 by Jeff Lubell, True Religion made its first trip through bankruptcy in 2017, one of a long line of mall-based, private equity-owned apparel retailers to file for bankruptcy that year as debt loads ran into a rapidly shifting retail market. Its second bankruptcy gives True Religion another chance to ease its balance sheet, slim down its footprint and try to find solid ground in a market still largely shaped by COVID-19. That the retailer was able to reorganize in bankruptcy, where others, including fellow apparel retailers like RTW Retailwinds, have liquidated, shows that key stakeholders see value in the denim maker going forward.
With fresh capital in hand, Allbirds moves into apparel
Allbirds is planting its flag firmly in the apparel space, after launching its first foray outside of footwear with a sock line in 2019. The DTC brand’s introductory collection includes a T-shirt, wool cardigan, wool jumper and a puffer jacket. The clothing line was developed with Allbirds’ “core tenets” in mind, the company said, including simple design, natural materials and a commitment to sustainability. Each piece is labeled with its carbon footprint. Just last month, Allbirds raised $100 million in a Series E funding round and noted the money would go toward new product categories in addition to international and brick-and-mortar expansion. This move outside of its core footwear category comes just a few months after the brand debuted its first performance running shoe, stepping outside of the casual footwear space for the first time, and fits with a sustainable vision for the future of fashion: better materials, carbon-neutral products, less required washing, and items focused on form and function.
Athletic & Sporting Goods
Rawlings to acquire baseball and softball manufacturer Easton
Rawlings Sporting Goods, the manufacturer of baseball and other sports equipment, said it has entered into an agreement to acquire California-based Easton Diamond Sports LLC. Existing shareholders of Easton’s parent company, Peak Achievement Athletics Inc., will be minority owners in the combined companies. Seidler Equity Partners, a private equity group based in Marina del Rey, California, owns Rawlings. Major League Baseball has a stake in the business. Based in Thousand Oaks, California, Easton manufactures baseball and softball equipment and apparel. Officials said Tuesday that Rawlings’ acquisition will “create a leading baseball and softball equipment provider.”
Adidas Is Reportedly Selling Reebok
Adidas’ ownership of the Reebok brand may be coming to an end, according to a report from Manager Magazin. According to the German publication, the Three Stripes has already assembled an internal team to potentially reach a deal to sell the company by March 2021. Two names have emerged as potential suitors of acquiring the brand: China’s Anta Sports and the VF Corporation, the latter of which owns outdoor apparel and footwear brands including Timberland, Vans, and The North Face. Since taking over as CEO of Adidas in 2016, Kasper Rorsted has repeatedly stated that the brand has no intention of selling Reebok off, despite demands from investors to do so in 2017. In Adidas’ Q2 2020 earnings report, the company reported that Reebok revenues were down 42 percent due to its large presence to the U.S. market in the midst of the coronavirus pandemic. Adidas bought Reebok in August 2005 for $3.8 billion.
Outdoor Apparel Disruptor SA Company Receives Strategic Investment from TZP Group
SA Company, a leading outdoor lifestyle apparel business, announced that it has received a strategic investment from TZP Group, a private equity firm based in New York. Terms of the transaction were not disclosed. Founded in 2014 by CEO Thomas DeSernia, Jr., SA Company is a high-growth e-commerce retailer that is focused on providing quality outdoor apparel and accessories. Well known for its popular Face Shield® line of tubular bandanas, the Company has become synonymous with innovative, affordable products that enhance the outdoor experience, across fishing, hunting, boating, and similar outdoor verticals. Thomas DeSernia, Jr. will continue to lead the company in his role as CEO, Thomas DeSernia, Sr. will continue in his role as President, and the DeSernia family will maintain a meaningful ownership position in the Company.
Cosmetics & Pharmacy
P&G’s Grooming Business Sees an Uptick
The dominance of Procter & Gamble’s grooming business has been thrown into question in recent years due to the influx of direct-to-consumer shaving brands — but the business is showing signs of a rebound. For the quarter ended Sept. 30, the grooming segment posted a 5 percent net sales gain to $1.6 billion. Appliance sales were up more than 30 percent “due to innovation, increased demand for dry shaving and styling products and increased pricing,” P&G said in a statement. Jon Moeller, P&G’s chief financial officer, said the uptick was driven by appliances and “serving men and women in a more holistic way” — meaning providing products for people who want to shave, as well as those who do not, with products like hair trimmers and beard wax and conditioner. Overall, P&G’s sales gained 9 percent in the quarter, to $19.3 billion, with a net earnings increase of 19 percent to $4.3 billion. All segments posted gains.
Morphe Parent Buys Lipstick Queen
The parent company of Morphe has acquired Lipstick Queen. Lipstick Queen, founded by Poppy King in 2006, makes a range of $25 lipsticks that are sold at Space NK, Ulta Beauty and Mecca in Australia. The business was previously part of Manzanita-owned Space Brands and is well-known for its Frog Prince shade — the lipstick looks green, but turns lips pink. Industry sources said the plan going forward includes global expansion. Lipstick Queen is the latest line to join the Morphe family under new parent company Forma Brands. Earlier this year the business acquired Playa, a high-end hair line sold at Sephora. Forma will look to continue making acquisitions, incubate its own brands, and help run back-end operations for other brands, including influencer Jaclyn Hill’s Jaclyn Cosmetics.
L’Oréal Q3: Better-than-Expected
Expect the worst, hope for the best. It’s a maxim for many and a practice for a lot of FMCG companies and their suppliers during the COVID-19 pandemic. But L’Oréal didn’t just hope, it delivered, as sales declined just 2% to $8.3 billion in the recently concluded third quarter. The company said active cosmetics sales paced the recovery as sales soared 29.9% during the period. Meanwhile, professional product sales jumped 11.0% and consumer product sales rose 0.8%, but L’Oréal Luxe sales declined 6.2%. For the nine months, total sales fell 7.4% to $23.7 billion. The company noted that during the third quarter, North American sales rose 1.3%, while new market sales jumped 4.2%. In contrast, sales in Europe declined 2.5%. CEO Jean-Paul Agon, noted that after a first half marked by a crisis of supply, linked to the closure of points of sale around the world, L’Oréal put everything in place, as early as June, to stimulate demand for its brands and products and to re-engage all its business drivers. All of the launches initially planned went ahead, business drivers and media investments were strengthened, and “Back to Beauty” plans were deployed with L’Oréal’s distribution partners everywhere, in brick-and-mortar and e-commerce, to stimulate the return to consumption.
Unilever Defies Market Expectations, Posting 4.4% Growth in Q3
Although currency headwinds dented Unilever’s revenue growth in the third quarter, the consumer giant outstripped analysts’ expectations by posting a 4.4 percent uptick in underlying sales. Analysts had expected underlying sales to rise 1.3 percent for the three months to Sept. 30. On a reported basis, turnover was down 2.4 percent to 12.9 billion euros. Unilever said consumers are doing more things at home — eating, and washing their hair and clothing — while demand for antibacterial products has been buoyant. Unilever’s prestige beauty business, which includes brands such as Dermalogica, Kate Somerville, Murad and REN, was growing, despite “subdued” footfall in the health and beauty channel. Online channels continued to grow, Unilever said, with e-commerce rising 76 percent in the quarter.
Discounters & Department Stores
Target adds more safety features ahead of the holidays
Target is adding a slew of new features to its stores and digital platforms aimed at making consumers feel safe. Among them is the mobile payment option in the Target app, Wallet, which customers can now use for contactless self-checkout in stores, according to a press release. The retailer is also adding 1,000 MyCheckout devices to stores, allowing customers to check out with employee assistance anywhere in a store. Additionally, customers can visit the Target website to see if there is a line due to metered occupancy. Shoppers can reserve a spot in line digitally and will be notified from the company via text when they can enter. Other efforts include a doubling of parking spaces for Target’s Drive Up service and a new checkout system for Drive Up that eliminates the need to scan barcodes.
With new private label, Kohl’s stakes strategy on the athleisure boom
Kohl’s on Tuesday unveiled a strategy centered on what it called “a new vision: to be the most trusted retailer of choice for the active and casual lifestyle.” The move entails expanding its active assortment to 30% of sales, from 20% last year; tripling beauty sales; and focusing on women’s, plus and outdoor, according to a company presentation to investors. Key to the plan is a new athleisure private label dubbed FLX, which will be available in select stores and online beginning in March, according to a press release Tuesday. The retailer implemented a 25% increase in square footage dedicated to the active category in around 160 stores.
J.C. Penney inks deal to sell itself, looks to close it in time for holidays
J.C. Penney finally has a formal deal on paper and signed with Simon Property Group, Brookfield Asset Management and key lenders that would sell off the department store chain and some 160 real estate assets. Along with an asset purchase agreement, Penney filed key documents needed to move its Chapter 11 case through the process, including its disclosure statement and reorganization plan.
As Stein Mart winds down its physical business in bankruptcy, its intellectual property is going up for sale. The federal bankruptcy court overseeing Stein Mart’s Chapter 11 case approved the hire of Hilco Streambank, which specializes in IP disposition, to handle the sale. Under the agreement, Hilco will be responsible for marketing Stein Mart’s IP to potential buyers while receiving a percentage of the proceeds with a sale.
Emerging Consumer Companies
Quip, the oral health company, announced that its oral care products will be available in 3,100 Walmart stores nationwide and through Walmart.com. Customers will be able to purchase a wide range of quip’s products, including their original electric toothbrushes and toothpastes for both adults and kids, and their eco-friendly refillable floss string. The launch with Walmart follows a hugely successful initial launch into mass retail in October 2018. The company has sold over five million electric toothbrushes to date and is now focused on expanding its omni-channel distribution through multiple national retailers and introducing consumers to quip’s direct-to-consumer subscription service.
ThredUp, the San Francisco-based online used clothing retailer, filed a confidential registration statement with the U.S. Securities and Exchange Commission for an initial public offering. The company is targeting early next year for its IPO and could raise between $200 million and $300 million in the offering. ThredUp was founded in 2009 and has raised more than $305 million in venture funding. The San Francisco-based company’s most recent valuation, following a $175 million Series F funding in September 2019, was $650 million.
Casper, the New York-based mattress and bedding brand, launched Rest Stop, a digital pop-up store. The “store” sells limited-edition loungewear and accessories, including cozy sweatshirts, a puzzle, a mug, and even a dog hoodie, all with the Casper logo or sleep-related phrases. Additionally, it supports a good cause – 20 percent of every purchase at the Casper Rest Stop will be donated to Win, the largest provider of family shelter and supportive housing in New York City.
Grocery & Restaurants
Southeastern Grocers moves forward with IPO
About three weeks after announcing a possible initial public offering, Southeastern Grocers has gone ahead with an IPO filing. Jacksonville, Fla.-based Southeastern Grocers has said that it has filed an S-1 registration statement with the Securities and Exchange Commission for a public offering of common stock by certain of its stockholders. Facing stiff competition, Southeastern Grocers in recent years has worked to restructure its business, focusing primarily on Winn-Dixie, and shed stores. The company in September announced deals to sell 23 stores under its Bi-Lo and Harveys Supermarket banners to grocery wholesaler and retailer Alex Lee and independent operator B&T Foods. The transactions furthered plans to dissolve the Bi-Lo banner, disclosed in June when the company announced the sale of 62 Bi-Lo and Harveys stores and a distribution center to Ahold Delhaize USA’s Food Lion chain. With the IPO, Southeastern Grocers will operate 420 stores under the Winn-Dixie, Harveys and Fresco y Más banners in Florida, Alabama, Louisiana, Georgia and Mississippi, as well as 140 liquor stores, 231 in-store pharmacies and one central specialty pharmacy, according to the filing.
Sweetgreen restructuring, cuts 20% of corporate workforce
Sweetgreen is restructuring its business and reducing its Southern California-based workforce by 20% as the pandemic continues to cripple the fast-casual brand’s core urban locations especially stores in New York City. Co-founder and CEO Jonathan Neman announced the cuts earlier this week in a memo with employees. The 20% staff reduction is occurring at the company’s Culver City, Calif.-based headquarters. Field level restaurant workers have not been impacted. Neman said back in April that he had expected remote workers to return to offices after Labor Day. “The reality is many of our restaurants in dense urban areas, particularly in NYC, have yet to recover,” he said. Neman said Sweetgreen is reorganizing with a focus on accelerating store growth in new communities. The company also plans to reduce its menu and operational complexity, while still investing in enhancing its digital ordering channels.
Home & Road
Libbey set to emerge from bankruptcy
The future looks bright for Libbey as it plans to emerge from bankruptcy within the coming weeks. The glassmaker, which filed for bankruptcy in June, said the Bankruptcy Court has confirmed its plan of reorganization, and it has secured financing through a $150 million term loan and a $100 million asset-based lending facility. It said it expects to emerge from the Chapter 11 process “in the coming weeks” with less than $200 million of funded debt. “We are pleased to have reached this critical milestone and look forward to emerging as a healthy company with a stronger balance sheet and improved liquidity,” said CEO Mike Bauer. “I want to thank all of our employees for maintaining an incredible focus on serving our customers and end users without interruption throughout this process, as well as our lenders, customers, vendors and end users for their continued support. “We look forward to working with all our stakeholders as we move forward as a stronger partner and continue our 200+-year legacy of delivering the finest glassware and tabletop products to the world and empowering consumers to celebrate life’s moments.”
The Container Store Sales Soar in Q2
Sales-driven initiatives combined with consumers’ stay-at-home practices boosted The Container Store’s sales and net income up in the second quarter, the storage and organization retailer said. Consolidated net income in the period ended Sept. 26, 2020, was $20.2 million, compared to net income of $3.6 million in the year-ago period. Consolidated net sales were $248.2 million, an increase of 5%, which includes a 16.8% increase in the fiscal month of September. It was the second-best quarter sales, earnings and free cash flow in the company’s history, according to Chairwoman and CEO Melissa Reiff, and reflect “the significant strides we have made on our multiyear sales-driving initiatives across merchandising, marketing, stores and online. The hard work of our teams across the organization and disciplined execution of our strategic priorities enabled us to benefit from the stay-at-home phenomenon created by today’s environment.” Reiff singled out the company’s partnership last year with The Home Edit, an organization and interior styling company that provides organization services as well as books, apparel, labels and other products. The Container Store has an exclusive line of The Home Edit storage and organization products.
Jewelry & Luxury
WD Lab Grown Signs 2 Patent Sublicensing Agreements
M7D Corp., which does business as WD Lab Grown Diamonds, has announced that it has entered into patent sublicensing agreements with lab-grown diamond sellers ALTR (India) Private Limited, ALTR Inc., and Evolution Diamond. Terms of the agreement were not disclosed. WD called the agreements the first of their kind in the industry and said in a statement they permit ALTR and Evolution to distribute diamonds grown by the chemical vapor deposition (CVD) method in the United States, Canada, Mexico, and other global territories where Carnegie Institution of Washington’s patents are in force.
Why Tiffany & Co. is bringing its Blue Box Cafe to South Coast Plaza
West Coast fans of the 1961 Audrey Hepburn classic “Breakfast at Tiffany’s” will finally get to live out their fantasy of dining at the famous jewelry store. In December, Tiffany & Co. is opening a Blue Box Cafe at South Coast Plaza in Costa Mesa. It follows last year’s temporary Blue Box Cafe pop-up at the jewelry store’s Beverly Hills boutique and the 2017 launch of its first Blue Box Cafe at its New York flagship store. (The Fifth Avenue cafe is expected to reopen next year.) Reed Krakoff, Tiffany & Co.’s chief artistic officer, said the jewelry brand’s relocated and newly designed Costa Mesa boutique, expected to open in November, was a natural choice for its latest bistro, which will seat 38 guests.
Some luxury brands are beating Q3 exceptions
Last week LVMH set a precedent for other luxury groups when it posted double digit growth for its fashion and accessories businesses in Q3. While in the first nine months organic revenue declined by 11 percent, due to global lockdown measures and store closures, the third quarter saw a strong rebound in activity, with a growth of 12 percent. LVMH’s star brands, Christian Dior and Louis Vuitton, are seeing an unprecedented return to growth, leaving some luxury brands, like Gucci, behind. Kering reported a positive third quarter with sales down just 1 percent after a colossal drop of 44 percent in the previous quarter. Gucci, however, did not rebound at the same rate as Dior and Louis Vuitton, with sales down 9 percent year on year. Bottega Veneta saw a rise of 21 percent, with a high demand for its leather accessories and ready to wear under new designer Daniel Lee.
Office & Leisure
AMC warns bankruptcy is on the table as cash runs low
AMC has agreed to sell as many as 15 million shares of its stock, but equity in the company could soon be worthless if the largest theater chain in the world files for bankruptcy. On Tuesday, AMC continued to warn investors about its dwindling cash pile and said it may have to file for Chapter 11 bankruptcy if it is unable to secure additional sources of liquidity. Chapter 11 bankruptcy would likely allow AMC to stay in business while it reworks its debts and sorts out new lines of liquidity. Movie theater chains in the U.S. have been slammed by the ongoing coronavirus pandemic, which first shuttered theaters and then drove away customers and major Hollywood blockbusters. AMC was particularly vulnerable because of the more than $4.75 billion in debt it had amassed before the crisis from outfitting its theaters with luxury seating and from buying competitors such as Carmike and Odeon. AMC has around 1,000 theaters and more than 11,000 screens globally.
Funtastic acquires Toys ‘R’ Us Australia in recapitalisation play
Funtastic has acquired Hobby Warehouse – and by extension Toys ‘R’ Us’ Australian operations – and is issuing over 250 million shares to recapitalise the company. The acquisition brings two of Australia’s leading toy retailers under one roof, and will bolster Funtastic’s B2B operations and “return the group to profitability“. Louis Mittoni, founder of Hobby Warehouse, is to be appointed CEO and managing director of the combined group. “This is the next phase of the Toys ‘R’ Us relaunch,” Mittoni said. “Funtastic will, with the research and support of Tru Kids Inc. and it’s innovative ‘experiential’ store formats in Houston and New Jersey, commence our own physical high experience store attached to our new logistics centre near Melbourne during 2021. Together, we will build a formidable company with strong foundations over the next several years.”
Hamleys to cut more than 25% of staff
Historic toy shop Hamleys will cut more than a quarter of its workforce according to a report by the Guardian. The world’s oldest toyshop confirmed that 60 of its 208 staff working in the Regent Street store and at its headquarters will leave as part of its redundancy programme. Hamleys was forced to close its stores in March due to the lockdown, and reopened its flagship London store in June. The coronavirus pandemic is also said to have delayed plans to refurbish the seven-storey retail destination, which is usually a key location for tourists in the West End. Hamleys was acquired by Reliance Brands in 2019 in a deal worth £70 million. Reliance Brands is a subsidiary of Reliance Industries, India’s biggest bricks and mortar retailer in India, owned by India’ richest person, Mukesh Ambani.
Paintball Empire Goes Bankrupt With Plans to Sell Assets
A court-appointed receiver plans to sell paintball equipment makers G.I. Sportz Inc. and Tippmann Sports after they defaulted on $29 million of debt. Quebec-based G.I. Sportz, identified in Canadian documents last year as the largest global manufacturer and distributor of paintball-related products, has “no ability to repay” the $29 million it owes under a credit agreement, according to a sworn statement from the company’s receiver. A judge in Quebec on Thursday handed broad control of the firm’s finances to consulting firm KSV Advisory, bankruptcy court papers show. The company is majority owned by private equity firm Fulcrum Capital Partners. The firm is part of a partnership that in September took over as lenders to G.I. Sportz, replacing Bank of Montreal. The partnership demanded repayment four days after becoming the lenders, court papers show.
Technology & Internet
The Justice Department has filed its antitrust lawsuit against Google
After investigating Google for more than a year, the Justice Department has finally issued its antitrust lawsuit against the search giant, alleging that the company is “unlawfully maintaining monopolies in the markets for general search services, search advertising, and general search text advertising in the United States.” It cites Section 2 of the Sherman Act — which deals specifically with monopolies — and seeks both to “restrain” Google and to seek remedies for the effects of its conduct so far. Remedies can come in the form of fines, or enforcing a divestment, or enforcing a change in business practices, or all of these. The case is the most aggressive action the U.S. government has taken in decades against any of the technology companies that now buttress a huge portion of the American economy. The last company that received this level of scrutiny was Microsoft, which began as an investigation in 1992, was filed as a suit in 1997 and finally went into effect (as a settlement) in 2001. Some argue that the government action against Bill Gates’ software giant reshaped the technology industry and set the stage for Google and its peers to flourish. Now, ironically, it’s Google’s turn in the monopoly hot seat.
Alibaba to Offer Supply Chain, Digital Training for Small and Midsized U.S. Businesses
Online shopping has surged amid store closures and six-foot social distancing mandates around the globe. But while the coronavirus may have accelerated what was already in the works pre-pandemic, some parts of the retail sphere are having trouble keeping up — like the supply chain. E-commerce sites and shop-from-home technologies are now essential for fashion and retail brands that wish to survive long enough to enter the post-COVID-19 world. But it turns out a massive urgency in e-commerce isn’t easy — or cheap. Even big-box retailers like Target are learning firsthand how expensive the sudden surge in an online business can be. The added rush from the upcoming holiday shopping season — and the fear that distribution systems might not be able to handle the sheer volume of e-commerce orders — likely won’t help. Small and medium-sized businesses, many with limited or no online capabilities before the pandemic, will likely suffer the most. Alibaba, China’s B2B platform, might have the answer. Starting Tuesday, U.S. small and medium-sized businesses — that is, businesses with 500 or fewer associates — could sign up for the Alibaba.com Digitalization Sprint for U.S. Manufacturers program.
Finance & Economy
Holiday shoppers are crossing themselves off of the gift list, trade group says
As holiday shoppers look for gifts, they plan to spend less overall and pull back on purchases for themselves, according to a survey by the National Retail Federation. The retail industry trade group said that consumers expect to spend $997.79 on gifts, holiday items like food and decorations, and additional “non-gift” purchases, according to a survey of 7,660 consumers conducted in early October. That’s a drop of about $50 from last year’s survey. Nearly all of that decline came from people who say they are hesitant to buy items for themselves or their families that aren’t gifts while they are holiday shopping, even if there’s a big sale, the survey found. They plan to spend a little less on gifts than last year, a drop of about $8, according to the survey.
U.S. weekly jobless claims fall; many unemployed losing benefits
The number of Americans filing new claims for unemployment benefits fell more than expected last week but remained very high as the labor market recovery shows signs of strain amid a relentless COVID-19 pandemic and ebbing fiscal stimulus. While other data showed home sales racing to a more than 14-year high in September, economic activity is slowing heading into the fourth quarter. A measure of the economy’s prospects increased moderately last month.
