Consumers, business owners, and policy makers received some good news last week. The Labor Department reported on Wednesday that wholesale prices were down 0.5% in October, their biggest decline in three and a half years. The decline was notably better than expectations as well, as economists had expected a 0.1% increase. This news, coupled with a benign consumer price index reading on Tuesday, fueled a surge across U.S. stock markets as it buoyed hopes that the Federal Reserve may be done raising interest rates. These reports and datapoints are clearly encouraging for economists and traders, but will the average person feel any relief from inflation in the near term? Well, is Thanksgiving near-term enough for you?
With Thanksgiving three days away, Americans are about to enjoy lower prices for two economic bellwethers: gas prices and food. On the gas front, a combination of factors has resulted in a 20% correction in oil prices since September, including rising inventories in the U.S. and weakening international demand, particularly in China. This is equating to savings at the pump, with AAA reporting that national gas prices are down 7% in the last month, and 11.5% year-over-year. This relief comes just in time for Thanksgiving travel – AAA also estimates that this will be the third busiest Thanksgiving for travel since 2000, with 55.4 million Americans traveling at least 50 miles.
Once travelers reach their destinations and their focuses turn to the Thanksgiving meal, they will find lower prices there as well. Food costs surged in 2022 after Russia’s invasion of Ukraine, but prices for important staples, such as wheat, corn, and certain oils, have since come down. On a third quarter earnings call last week, Walmart CEO Doug McMillon noted that select grocery items are seeing and may continue to see disinflation over the near-term. “We think we may see dry grocery and consumables start to deflate in the coming weeks and months, and so as we look ahead to next year, we could find ourselves in Walmart U.S. with a deflationary environment,” he said.
Additionally, consumers are likely to notice that prices for some classic Thanksgiving food items are down the most. At this time last year, turkey prices were soaring due to a brutal outbreak of avian flu that killed over 60 million birds, according to the Agriculture Department. With that in the rear-view mirror, wholesale prices for turkeys were down 32% year-over-year in early November, according to research firm Urner Barry. This may not result in equally dramatic price declines on grocery shelves, but some of the savings are likely to be passed along to consumers. Other notable dishes are down too – Wells Fargo estimates that fresh cranberry prices are down 20% year-over-year.
Getting through Thanksgiving dinner having spent less money than last year on travel and food, consumers will feel some relief and some extra heft in their wallets. Brands and retailers can reasonably hope that additional spending power will turn into a robust kickoff to the holiday shopping season, as soon as dessert is finished.
Apparel & Footwear
PVH Selling Warners, Olga and True & Co.
PVH Corp. has cut a $160 million cash deal to sell its Warners, Olga and True & Co. businesses, focusing the company all the more on Tommy Hilfiger and Calvin Klein. The deal is expected to close at the end of this month and the buyer, privately owned Basic Resources, agreed to pay an up to $10 million earnout based on net sales this year. Stefan Larsson, chief executive officer of PVH, said, “This transaction is an important next step as we continue to accelerate our focus under the PVH+ Plan to build our core brands, Calvin Klein and Tommy Hilfiger, into the most desirable lifestyle brands in the world.” PVH plans to use proceeds from the deal to repurchase its own shares on Wall Street. Basic Resources was established in 1993 and specializes in “the manufacturing, distribution and marketing of high-quality basic apparel.” Dealmakers have been busy lately despite the high interest rates, which make it more expensive to borrow money for acquisitions. While some of the transactions this year have been flashy — like Tapestry Inc.’s pending acquisition of Capri Holdings or Brikenstock’s IPO — others, like PVH, are using the moment to focus in on key parts of their business.
Barney Waters Returns to K-Swiss as International Brand President
K-Swiss has a new international brand president, and it’s a familiar face: Barney Waters. Waters, who previously spent eight years at K-Swiss, has returned to the company to assume the international brand president role. During his time at K-Swiss, Waters was the brand president from 2016-2021, and served as chief marketing officer from 2013-2016. (Waters left the company in 2021 to assume the president role at Garrett Leight California Optical.) Waters is replacing footwear industry veteran Rob Langstaff, who assumed the K-Swiss international brand president role in March. In a statement, K-Swiss credited Waters — a 20-year footwear industry veteran who previously spent seven years at Puma — with helping rebuild the brand and the creation of disruptive campaigns in the digital world. Also, K-Swiss said Waters “made significant contributions to K-Swiss’ success, returning the brand to growth and profitability.”
Delta Galil Inks Deal to Buy Passionata Lingerie Brand
Delta Galil Industries has found its new passion. The acquisitive Tel Aviv-based fashion company agreed to buy the Passionata brand from the Chantelle Group, building out its intimates business with a 35-year-old brand that has a global presence and goes for playful and seductive with its styling. Passionata has an online presence and wholesale accounts across Europe, Asia and the Americas. The brand will be led by Antonio Iandolo, president of Delta Textile France, which is part of the Eminence Group, which the company acquired in 2018. While the brand will be managed by an international team based in France, it will receive back office support from the broader company. Delta Galil expects the deal to be finalized in January and said Chantelle will retain the sole licensee rights to manage the brand until July. Passionata will bolster the offering of Delta Galil, which makes a range of branded and private label apparel across several categories, including women’s intimate apparel, men’s underwear and loungewear as well as denim and apparel under the 7 for All Mankind brand.
Express Inc. Chief Financial Officer and Treasurer Jason Judd will leave the company Nov. 17, according to a filing with the Securities and Exchange Commission. Judd, who arrived from Big Lots just last year, is leaving to pursue another opportunity, per the filing. The company runs namesake Express as well as Bonobos and Upwest. Mark Still, who is senior vice president of brand finance and planning and allocation, will add the duties of interim CFO and treasurer, reporting directly to newly arrived CEO Stewart Glendinning. Express Inc. has been grappling with financial difficulties. After facing delisting when its stock price fell below $1 for an extended time earlier this year, the company in August executed a reverse stock split and said it would cut 150 jobs. In its most recent quarter, net sales fell 6.4% year over year to $435.3 million, comps fell 13%, inventory rose 20% and gross margin contracted about 1,000 basis points to 23.1%. The company said it had hired advisers to help review its business model and achieve $200 million in annualized savings by 2025.
Sequoia-Backed Fast-Fashion E-tailer Urbanic Raises $150 Million
London-based women’s fashion e-tailer Urbanic has closed on a $150 million Series C funding round. Investors in the raise include Switzerland’s Mirabaud Lifestyle Impact & Innovation Fund, New York-based public-private hybrid investment firm D1 Capital Partners, JAM Fund and other global investors and European luxury fashion families. Previous backers include Nexus Venture Partners and Sequoia Capital. Urbanic serves the fast-growing 1.4-billion-strong Indian consumer market. The four-year-old startup plays in the fast-fashion sandbox dominated by H&M and Zara, but recently disrupted by the likes of digitally nimble upstarts from Shein to Temu. Skinny jeans sell for 1,490 rupees, or about $18 dollars. The price of a ruffle A-line dress is 1,990 rupees, or nearly $24, while a sports bra goes for 590 rupees, little more than $7. In true disruptor fashion, Urbanic claims it leans on artificial intelligence to churn out a steady stream of new designs and speaks of a highly efficient Shein-style supply chain.
Athletic & Sporting Goods
Nike appoints new CMO amidst leadership shake-up
Nike has appointed Nicole Hubbard Graham as its new CMO after the outgoing Dirk-Jan ‘DJ’ van Hameren decided to retire. Hubbard Graham had previously spent 17 years with the footwear company before departing in 2021 to co-found creative agency Adopt. She has previously held roles across the business including in basketball, consumer divisions and two years spent in the UK as its director of brand marketing. Her appointment comes amid a bit of a leadership shake-up at the sports giant. Nike is creating a new role of chief innovation officer for John Hoke who departs his role in the design team to Martin Lotti. Dr Muge Erdirik Dogan is also set to join Nike from Amazon as its chief technology officer.
Out&Back Acquires The Locals Sale, The Leading Online Marketplace in Outdoor Gear Circular Economy
Out&Back Outdoor, the one-stop marketplace to buy or sell new and used outdoor gear, announced its acquisition of gear exchange company The Locals Sale. With both companies having influential stakes in the outdoor gear space, this acquisition positions Out&Back to continue expanding its offerings that support sustainability and affordable pricing while challenging the way consumers typically shop and sell secondhand. Founded in 2019 by Barruch Ben-Zekry, Out&Back’s platform delivers a seamless experience for outdoor enthusiasts to sell and buy secondhand gear in one convenient place. The Locals Sale, founded by Jake Cohn, has built a cult-like following by curating gear from professional athletes, outdoor brands, and industry insiders with the sole goal of providing the public with an opportunity to find the most affordable ski & snowboard gear. As of today, The Locals Sale will become a portfolio company of Out&Back, and the acquisition includes ownership of its website, inventory, warehouse space and branded The Locals Sale events.
Chief Upland Acquires Q5 Outdoor Products
Chief Upland acquired Q5 Outdoor Products, the upland hunting vests, clay shooting belts and accessories brand. Founded in 2011, Q5 boasts 100 percent Made in the USA products. Chief Upland said the company will build a full suite of technical upland hunting gear from head to toe. The acquisition of Q5 Outdoors reportedly expands the company’s brand from one upland vest style to more than six. The company also reported that it now has dialed-in gear offerings for hunting in every climate and pursuing all upland game types.
Cosmetics & Pharmacy
The Body Shop acquired by Aurelius in £207m deal
Natura & Co has agreed to sell The Body Shop to private equity firm Aurelius, after struggling to improve the brand’s performance. The move will see Aurelius work with The Body Shop’s management team to help drive “operational excellence” across the business, leveraging its expertise and experience in the omnichannel retail and wholesale markets. The Body Shop, which is headquartered in London and employs around 7,000 staff, has operations in 89 markets with over 900 company-owned stores in 20 countries and partnerships with head franchisees who operate approximately 1,600 franchised stores in a further 69 geographies. In a recent trading update Natura & Co reported a 10.5% decline in net revenue to £1.2 billion (BRL 7.5 billion) for the third quarter ending 30 August 2023. Net revenue at The Body Shop dropped 15%, with combined sales of core business distribution channels (stores, e-commerce and franchise) also down.
Aesthetic Partners Fuels Growth Through New Partnership With Norwest
Aesthetic Partners , a leading clinical aesthetics-focused practice management company, announced a strategic partnership with global investment firm Norwest to accelerate growth in new markets. Transaction details of the minority investment were not disclosed. Aesthetic Partners joins forces with physician-led medical aesthetics, cosmetic dermatology and plastic surgery clinics in prospering suburban markets throughout the U.S. One of the first platform entrants in the booming aesthetics market, it has added 20 practices since 2019, expanding throughout California, Florida, North Carolina and Virginia.
Odele Receives Minority Investment from Stride Consumer Partners
Odele has received a minority investment from Stride Consumer Partners, which will fuel key area’s of the brand’s business, namely marketing, talent and product innovation. Transaction details were not disclosed. The brand features 20 products with national distribution at Target, CVS Pharmacy and Ulta Beauty. Odele has achieved 55% year-over-year growth between 2023 and 2022.
BeautyHealth CEO Steps Down; Interim CEO Announced
BeautyHealth has announced that CEO Andrew Stanleick has resigned from his role as President and CEO and will relinquish his seat on the Board, effective November 19, 2023. Beauty Health Director, Maria Beck will serve as Interim CEO while a formal search is conducted by the Board. No reason was given for his departure but it coincided with the announcement of the company’s third-quarter results, which detailed lower-than-expected US revenue and US$63.1 million in restructuring charges related to device upgrades of early generation Syndeo devices. Stanleick will continue to serve in an advisory role with the company through the end of the year.
Annie Jackson Promoted to CEO of Credo Beauty
To say 2023 was a transitional year for Credo Beauty would be an understatement. Today, the changes continue: Annie Jackson is taking the helm of the sustainable beauty retailer. The move follows the departure of Stuart Millar, who joined as CEO in March 2022. Most recently, Jackson was Chief Operating Officer. Today Credo Beauty operates 15 stores, employs 50 people, and splits its headquarters between San Francisco and Manhattan. There’s also a team in Los Angeles. Other executive moves at Credo Beauty this year include the addition of Derek Browe in September as CFO, who formerly held that position at Thursday Boot Company, Bandier, and Untuckit. In August, Rie Maiden joined as Vice President of Marketing & Ecommerce, from Estée Lauder, where she led marketing for Jo Malone and La Mer. And in July, Boma Brown-West, whose career spans 15-plus years of sustainable leadership that includes 10 years at the Environmental Defense Fund, joined the company as Vice President of Sustainability Impact.
Discounters & Department Stores
Walmart thinking ‘more cautiously’ about the consumer amid volatile sales trends
Walmart’s third-quarter global revenue rose to $160.8 billion, up 5.2% from last year, the company said in a Thursday earnings announcement. E-commerce for Walmart’s U.S. segment rose 24%, led by pickup and delivery. E-commerce rose 16% for Sam’s Club and was up 15% globally. Comparable sales rose 4.9% for Walmart U.S. and net sales rose 4.4% to $109.4 billion, but operating income fell 2.2% to $5 billion. That was below guidance due to higher-than-expected expenses, executives said on a call with analysts. Walmart raised its full-year consolidated net sales guidance to a range of 5% to 5.5%, up from 4% to 4.5%. For consolidated operating income, Walmart is maintaining guidance of growth ranging from 7% to 7.5%.
Kohl’s and Target went deep into beauty shop-in-shops. How does that impact the holidays?
Kohl’s has a new method for luring drive-by shoppers into its stores: adding “+ Sephora” to the sign. The department store’s 2020 partnership with the beauty retailer has become a key piece of its strategy, worthy of changing its shopping center signage and displacing its in-store jewelry counters. Originally expected to reach 850 Kohl’s stores, the company last year said it would bring beauty shops to all 1,100 locations. Kohl’s CEO Tom Kingsbury in May this year said the concept should be in 900 stores by the end of 2023 and that the Sephora at Kohl’s shops drove Kohl’s beauty sales up 150% in 2022. At the same time, the executive highlighted the Sephora partnership as one of Kohl’s top priorities.
Target CEO touts ‘meaningful improvement’ in profits even as revenue falls 4.2%
Despite a soft third quarter, Target exceeded analysts’ expectations. The company on Wednesday reported total revenue of $25.4 billion, down 4.2% from a year ago, for the three months ended Oct. 28. Same-store sales fell 4.9%, which was in line with expectations. Target’s operating income was $1.3 billion, up 28.9% from last year. Chief Growth Officer Christina Hennington said on a call with analysts that growth in beauty offset declines in its discretionary categories, but as inflation eases the company expects consumers to have more space for discretionary purchases. Same-day services grew in Q3 by more than 8%. Drive-up led that segment of the business, with more than 12% growth, while inventory at the end of the quarter was 14% lower than last year.
Macy’s defies expectations in Q3 as margins improve
Macy’s Q3 net sales fell 7.1% year over year to $4.9 billion, as comps (including licensed sales) fell 6.3%. Brick-and-mortar and digital sales each dropped 7%. Net income plummeted 60.2% to $43 million. Other revenue fell 24.9% to $178 million, and was 3.7% of net sales, down from 4.5% last year, largely due to higher store credit card delinquencies and bad debt levels. Merchandise margin expanded 110 basis points, thanks to lower permanent markdowns at Macy’s and lower freight expense. By banner, namesake comps fell 6.7%, Bloomingdale’s fell 4.4% and Bluemercury rose 2.5%. Macy’s and Bloomingdale’s off-price stores outperformed the full-line business, executives said on a conference call Thursday.
Emerging Consumer Companies
Cumulus Coffee raises $20.3 million for premium cold brew machine
The Cumulus Coffee Company has secured $20.3 million in seed funding to introduce a first-of-its-kind solution for making premium cold brew at home. Led by experts in coffee, technology, and design, the company aims to revolutionize the cold coffee market. The funding round was led by Valor Siren Ventures and Valor Equity Partners, with participation from Maveron, Howard Schultz, Linden Ventures, Carter Reum, and Ryan Tedder. The company’s compact machine uses newly invented technology and recyclable aluminum capsules to deliver a 10-ounce cold brew, nitro cold brew, and cold-pressed espresso in under 45 seconds. The coffee is prepared without any ice and is never exposed to heat, allowing it to retain its smooth and subtle taste. Valor Equity Partners believes that Cumulus has created an exciting new product for nitro cold brew coffee drinkers and is excited to partner with the company to achieve its vision of creating an at-home high-quality nitro cold brew coffee experience.
SuperCircle raises $7 million to tackle textile waste with recycling solutions
Circular technology and logistics platform SuperCircle has raised $7 million in a Pre-Series A funding round to meet the growing demand for its textile recycling solutions. The funding round was co-led by Radicle Impact and Ulu Ventures, with participation from Earthshot Ventures, BBG Ventures, Lyra Ventures, and Blueprint Ventures. The funds will be used to expand SuperCircle’s infrastructure and streamline its shipping, consolidation, sorting, grading, and recycling services for brands and retailers globally. The funding will also help form strategic partnerships and further brand-owned recycling programs and bulk inventory solutions. SuperCircle’s technology and reverse logistics infrastructure address the textile waste crisis in the US, where 60% of clothing ends up in landfills within a year. The platform integrates waste management with fiber-to-fiber recycling solutions and has already helped brands such as Uniqlo, Reformation, and Parachute address the issue.
Vesta acquires Fernish & Feather to expand luxury furniture rental
Luxury design studio Vesta has acquired furniture rental companies Fernish and Feather, forming a new umbrella company called Showroom. The terms of the deal were not disclosed, but Showroom expects to generate nine-figure revenue in its first fiscal year. Fernish and Feather were founded in 2017 and offer furniture rentals from name brands like West Elm and CB2. Customers pay a monthly fee to rent items, with the option to purchase at the end of the term. Vesta’s goal with the acquisitions is to serve customers at different stages, from furnishing an apartment to staging a home for sale. The acquisitions allow Vesta to expand without diluting its brand.
Food & Beverage
Snickers maker Mars to buy UK chocolatier for $665M
Mars is paying $665 million to buy Britain’s Hotel Chocolat as the U.S.-based Snickers and M&M manufacturer expands its presence in the U.K. and increases its exposure to premium confections. Mars has operated in the U.K. since 1932. Andrew Clarke, global president of Mars Snacking, said his firm has “long admired” Hotel Chocolat, which is known for its lower sugar and higher cocoa content. Clarke called Hotel Chocolat a “differentiated brand.” Mars said in a statement that it “has a strong track record of nurturing entrepreneurial brands,” pointing to its experience with Kind, Nature’s Bakery and Tru Fru.
Tyson to shutter 2 more processing plants as earnings woes mount
Tyson Foods Inc is closing two more processing plants as it rounds out a tough year mired with pricing challenges and slow consumer demand. The meat giant will shutter two of its case-ready, value-added production facilities in Columbia, South Carolina, and Jacksonville, Florida, a spokesperson confirmed. The decision adds to the growing number of Tyson layoffs and plant closures this year. Approximately 219 employees will be affected from the factory closing in Florida, according to a recent WARN filing. No further details were available for the South Carolina facility. A spokesperson said Tyson was “reallocating resources to operate more efficiently.”
Fody Foods Lands New Investment, Chairperson
In anticipation of future growth in both natural and mass retail channels, Montreal-based Fody Foods closed a series B equity investment round last week and appointed a new board chairperson. Fody Foods president and CEO Steven Singer declined to specify the amount of the investment, but characterized it as “significant” capital that will help support the brand’s continued distribution growth, including a new partnership launching next month in over 2,000 Walmart stores. The company announced Joel Warady as the new chairperson of the board. Warady brings experience in the food sensitivity space leading allergen- and gluten-free brand Enjoy Life Foods for over 18 years and his current role as president of keto-friendly brand Catalina Crunch. The investment round was led by existing investor Jonathan Ross Goodman, chairman of Knight Therapeutics and an ex- Paladin Labs executive, with previous equity holders Clover Vitality, District Ventures, New Acres and EDC adding to the round. Canadian real estate mogul Jonathan Wener and Medicom Group founder Ronald Reuben joined the round as new investors.
Oatly Cancels Production of New Facilities Following Mixed Q3 Earnings
Amid its ongoing shift to an asset-light production model, Oatly reported net sales rose 2.5% to $187.6 million in Q3. Despite mixed results across its three segments, the Swedish oat milk maker announced it would modify its 2023 guidance, after seeing a diversification in its Americas food service business and “strategic reset” in Asia. For the 2023 fiscal year, the company is now forecasting constant currency revenue growth to be on the low end of the projected range of 7% to 12%, and fourth quarter gross margins to come in at the mid-20s, down from prior expectations of high 20s. Executives do believe the company is still on track to achieve profitable growth in 2024. In January, the company began its transition to an asset-light supply chain model after closing a $72 million deal with Ya YA Foods Corp., a Toronto-based co-packer. During the call with analysts, the company said it would double down on this strategy, discontinuing the construction of new manufacturing plants in EMEA and the Americas.
Grocery & Restaurants
General Atlantic Acquires Joe & the Juice for $641 Million
New York-based investment firm General Atlantic is acquiring a majority stake in the European-born cafe chain Joe & the Juice. According to reports from Bloomberg and Yahoo Finance, the buyout from existing owner Valedo Partners is valued at approximately $641 million, while giving GA an approximately 80-90% stake in the company. Sweden-based Valedo Partners bought the 21-year-old chain in 2013 for $48 million, and General Atlantic became a minority investor in 2016. Since then, the quick-service coffee, juice and sandwich chain has grown from 175 stores to 360 stores in 18 countries, including approximately 70 stores in major United States markets such as New York City, Chicago, Los Angeles and Washington D.C. Founded in 2002 in Copenhagen, Denmark, the chain maintains a focus on relatively healthy and sometimes organic-certified ingredients in throughout its food and drinks menus.
Restaurant brands jockey for Thanksgiving business
‘Tis the season when restaurant brands aggressively position themselves to be top of mind for holiday revelers. Thanksgiving meals and deals have been pouring into our inboxes for the past several weeks, catering to those who perhaps like to host, but not so much cook. There’s a good reason for such aggressive promotions; Technomic data finds that nearly one-fourth of consumers will likely purchase a full Thanksgiving meal for pickup from a restaurant, and 22% plan to use restaurant food for at least part of their Thanksgiving meal. A new HungerRush survey shows even more intent, with 64% of consumers saying they plan to order at least one food item from a restaurant to include in their holiday celebrations, while 37% said they’d order their entire holiday meal from a restaurant. As such, SpotOn restaurant customers have added 226 “Thanksgiving” menu items in the past 90 days, with the first uptick coming the week of Sept. 24 and peaking the week of Oct. 23. Further, 7,417 turkey items have been added in the past 90 days.
Home & Road
Williams-Sonoma posts Q3 profit in face of consumer headwinds
While it was off third quarter 2022 figures by double digits, Top 100 retailer Williams-Sonoma Inc. beat profitability estimates for the three months ended Oct. 29. It ended the quarter with $315 million in operating income and an operating margin of 17%. “We are proud to deliver another quarter of strong earnings, significantly exceeding expectations, despite a challenging macroeconomic backdrop for our industry. We beat profitability estimates with a record third quarter operating margin of 17% with earnings per share of $3.66,” said Laura Alber, president and CEO. “These results were achieved in an environment filled with on-going consumer hesitancy on high-ticket discretionary furniture spend and elevated levels of promotional activity.” For the quarter, Williams-Sonoma posted net revenues of $1.85 billion, down 15.46% compared with $2.19 billion over the same three months of 2022. Net earnings totaled $237.3 million, or $3.66 per diluted share, down 5.74% vs. $251.7 million, or $3.72 per diluted share.
CEO Decker Says Home Depot Improving Shopping Experience After Q3 Declines
Home Depot sales and earnings, despite year-over-year declines, beat Wall Street estimates in the third quarter as CEO Ted Decker said strategic initiatives to improve customer experience should power the company forward. Net earnings were $3.81 billion, or $3.81 per diluted share, versus $4.34 billion, or $4.24 per diluted share, in the year-previous period, the company stated. An analyst consensus estimate published by Yahoo Finance called for sales per diluted share of $3.76 and revenues of $37.61 billion.
Home Depot reported comparable sales slipped 3.1%, and comps for operations in the United States decreased 3.5% year over year. Sales of $37.71 billion for the quarter were down 3% from the year-prior period. Operating income was $5.41 billion versus $6.15 billion in the year-before quarter.
HomeGoods comes roaring back in strong Q3 for TJX Cos.
Coming off a strong performance in the third quarter, TJX Cos. regards the home category as both a sales driver and a margin driver for the foreseeable future. Home sales were “outstanding” and accelerated sequentially as the quarter rolled on at both the HomeGoods and Marmaxx divisions, according to Ernie Herrman, TJX CEO and president. At the HomeGoods division, which includes 914 HomeGoods stores and 54 Home Sense locations, total sales jumped 13% to $2.21 billion. Comps climbed 9% compared with a 16% decline in the prior-year quarter. Comp store sales at HomeGoods were strong across each region in the U.S. and were entirely driven by traffic. Segment profit margin returned to double digits, in part thanks to lower freight costs and expense leverage on stronger sales. “We’re excited about our market share opportunities,” Hermann told investors during this morning’s quarterly conference call. E-commerce, however, will not be part of HomeGoods’ future. The company recently pulled the plug on that platform. The sales volume was “a very small” part of TJX’s business, said CFO John Klinger.
Surya acquires furniture brand Mitchell Gold + Bob Williams
Surya has acquired furniture brand Mitchell Gold + Bob Williams (MG+BW), which declared bankruptcy last August after company leaders said PNC Bank denied funding. The company’s bankruptcy case has recently been converted to Chapter 7, a liquidation under the U.S. Bankruptcy Code. “We are dedicated to restoring MG+BW to its former glory and beyond, and we look forward to redefining the standards of excellence in the home furnishings industry,” said Surya President Satya Tiwari. “Our acquisition of the MG+BW brand reiterates our ongoing commitment to serve the design community as a complete resource for home furnishings.” Surya will introduce the brand as a trade-only partner, accessible only to interior designers and retailers. Tiwari said Surya plans to bring MG+BW back to its roots and “build on its core tenets of craftsmanship, customization and a design-forward approach with MG+BW designs and quality being preserved and celebrated.” Surya plans to restart manufacturing and assembly operations at the MG+BW facilities in Taylorsville, N.C., which will bring jobs back to the area and show “Surya’s dedication to contributing to the economic growth of the area,” according to Tiwari. Surya expects to start shipping MG+BW products in the first quarter of 2024.
Lowe’s courts millennial customers with home repair workshops
Lowe’s is looking to help homeowners develop their home repair skills. The home improvement giant said it is launching home repair workshops at which knowledgeable Lowe’s “red vest” employees will teach customers basic home repair and maintenance DIY skills through live, interactive presentations. Beginning Saturday, Nov. 11, the workshops will be hosted in 100 Lowe’s stores across the U.S. on Saturdays and Sundays. Participating stores will have stations dedicated to workshops, with hands-on demos available all day during normal store operating hours. No registration is required.
Jewelry & Luxury
Alex and Ani Assets Auctioned Off
SJ Corio Company recently hosted an online auction of equipment and assets left behind by Alex and Ani. The jewelry company was founded in 2004 by Carolyn Rafaelian, and at its peak had more than 70 stores. Though the brand was a hit in the 2010s, it has struggled to find its footing in recent years, filing for Chapter 11 bankruptcy protection in 2021. In June, The Boston Globe reported the company would close 20 of its remaining 27 locations and its headquarters in East Greenwich, Rhode Island. Corio said it began the auction process in May but at the end of June, Alex and Ani management, “locked the doors and abandoned the assets to the landlord,” abruptly vacating its headquarters.
Richemont’s H1 Jewelry Sales Climb 10%
Richemont had a strong first half of the year, with sales growth led by its jewelry division and a rebound in the Asia-Pacific region. For the first half ending Sept. 30, Richemont posted sales of €10.22 billion ($10.94 billion), a 6 percent year-over-year increase at actual exchange rates. Sales in all regions, except the Americas, were on the rise at actual exchange rates compared to the prior period, led by Asia-Pacific with sales up 14 percent in the region as COVID restrictions were eased. In the Americas, Richemont’s third-largest market by revenue percentage, sales fell 4 percent (up 1 percent at constant exchange rates) due to lower wholesale sales, slowing watch sales, and a “relatively weak” U.S. dollar. Overall, retail sales were up 9 percent year-over-year, while online sales slipped 7 percent. Wholesale sales grew 1 percent.
Brilliant Earth Lowers Guidance As Bridal Market Slows
Brilliant Earth posted muted sales growth in the third quarter late last week, lowering its fiscal outlook as bridal jewelry sales suffer. “We have all seen the headwinds in the bridal market as fewer people have been getting engaged versus historical averages, and we are not immune,” said CEO Beth Gerstein during an earnings call. Brilliant Earth has been growing its non-bridal fine jewelry offerings, recently introducing the “Sol” collection and partnering with designer Logan Hollowell. However, non-bridal fine jewelry has a lower average price point, and so its average order value (AOV) has suffered. The total number of orders in the quarter ending Sept. 30 climbed 17 percent, while AOV fell 12 percent. For the first nine months of the year, total orders climbed 16 percent while AOV fell 13 percent.
Burberry Warns Luxury Slump Puts Revenue Target Under Threat
Burberry Group Plc warned this year’s revenue target may be out of reach after the UK trenchcoat maker’s sales barely grew in the most recent quarter. The company said Thursday weaker demand may make its sales forecast impossible to hit and earnings would probably be at the lower end of its guided range if the slowdown in luxury demand continues. The shares fell as much as 11%, the steepest intraday decline in more than three years. Chief Executive Officer Jonathan Akeroyd‘s efforts to jumpstart the brand have been stymied amid a global slowdown in demand for luxury goods. Akeroyd appointed designer Daniel Lee last year to reinvigorate the company’s popularity, but the efforts have yet to bear fruit.
Office & Leisure
Toys R Us to open flagship store in Mall of America
Continuing its brick-and-mortar expansion, Toys R Us is opening a location at Mall of America, according to a press release shared with Retail Dive from parent company WHP Global. The 11,000-square-foot Mall of America location is the second flagship store in the U.S. and will open before Thanksgiving. In-store shoppers can find toys and games and take pictures with Geoffrey the Giraffe. The retailer plans to introduce Geoffrey’s Café and ice cream parlor, various interactive experiences and product demonstrations from toy companies next year, according to the announcement. After navigating a long, complex bankruptcy process, Toys R Us has expanded its brick-and-mortar presence via flagship stores and shop-in-shop locations. Though the bankruptcy proceedings began in 2018, they stretched into last year. The retailer reached a resolution with its creditors in October 2022. Today the brand generates $2 billion in global retail sales through 1,400 stores and e-commerce business in 31 countries, according to the company.
Petvisor, a best-in-class veterinary and pet services business management and client engagement software platform, announced more than $100 million in new investment led by the Apax Digital Funds, with participation from existing investors Frontier Growth, PeakSpan Capital, and Petvisor’s management team. As part of the transaction, Apax Digital’s Mia Hegazy and Dave Evans will join the Petvisor Board of Directors. This new funding comes at a time when pet ownership in the United States continues to skyrocket, with 66% of U.S. households (86.9 million homes) now owning a pet in 2023. Petvisor is the parent company of a family of brands that includes PetDesk, Vetstoria, WhiskerCloud, Kontak, and Groomer.io. Petvisor equips veterinary practices and pet services businesses with a suite of mobile-enabled tools, facilitating better communication, service, and client retention. The company’s innovative approach supports over 10,000 veterinary clinics, 400 grooming facilities, and over 20 million pet parents globally.
Technology & Internet
Amazon to let dealers sell cars on its site, starting with Hyundai
Amazon next year will allow auto dealers to sell cars through its site, starting with South Korean automaker Hyundai, the company said Thursday. The company has slowly muscled its way into the car-buying business over the years, launching digital showrooms on its site for shoppers to research and compare vehicles, but not purchase them directly through Amazon. Consumers can also buy car products, such as replacement parts, through its site. Beginning in 2024, Amazon will let shoppers purchase a new car online, then pick it up or have it delivered by their local dealership. Consumers will be able to search for available vehicles in their area, make a selection, then check out on Amazon using their preferred payment and financing method. With the move, shoppers will be able to buy cars on Amazon, but the dealer is still the end seller. Traditional automakers such as Hyundai have complex relationships with dealers that are backed, in many states, by laws that make it difficult or illegal to bypass franchised dealers and sell new vehicles directly to consumers.
Ousted OpenAI head Sam Altman to lead Microsoft’s new AI team
Former OpenAI CEO Sam Altman will be joining Microsoft to lead a new advanced AI research team, according to Microsoft CEO Satya Nadella. Nadella said on social media platform X that Altman and former OpenAI President and Board Chair Greg Brockman, alongside other colleagues, will be joining Microsoft to lead a new advanced AI research team. Tech giant Microsoft has invested billions of dollars in OpenAI and has a close technology partnership with the company. “We look forward to moving quickly to provide them with the resources needed for their success,” Nadella said. “We remain committed to our partnership with OpenAI and have confidence in our product roadmap, our ability to continue to innovate with everything we announced at Microsoft Ignite, and in continuing to support our customers and partners.” Altman himself reshared Nadella’s post, adding a somewhat cryptic comment to it: “The mission continues.”
Finance & Economy
Wholesale prices fell 0.5% in October for biggest monthly drop since April 2020
Wholesale prices in October posted their biggest decline in 3½ years, providing another indication that the worst of the inflation surge may have passed. The producer price index, which measures final-demand costs for businesses, declined 0.5% for the month, against expectations for a 0.1% increase from the Dow Jones consensus, the Labor Department reported Wednesday. The department said that was the biggest monthly decline since April 2020. On a yearly basis, headline PPI posted a 1.3% increase, down from 2.2% in September. Excluding food and energy, core PPI was unchanged, also below the forecast for a 0.3% increase. Excluding food, energy and trade services, the index increased 0.1%.
US economy cools as retail sales dip, monthly producer prices decline
U.S. retail sales fell for the first time in seven months in October as motor vehicle purchases and spending on hobbies dropped, pointing to slowing demand at the start of the fourth quarter that further strengthened expectations the Federal Reserve is done hiking interest rates. That was supported by other data showing the biggest decline in producer prices in three-and-a-half years in October on the back of cheaper gasoline. The reports followed on the heels of news on Tuesday that consumer prices were unchanged last month for the first time in more than a year. The data, combined with a cooling labor market, led economists to conclude that the U.S. central bank’s current rate hiking cycle was over. Still, there is no sign that the economy is sliding into recession. The drop in sales in October was less than expected and followed three straight months of hefty gains.
