Story of the Week
PepsiCo to buy tortilla chip maker Siete Foods for $1.2 billion
PepsiCo said on Oct 1st that it’s buying Mexican American food company Siete Foods for $1.2 billion, marking the company’s first food acquisition in roughly five years. Like many food companies, Pepsi has been trying to shift its portfolio to include healthier options in recent years, usually through acquisitions. Recent additions include Bare Snacks, Health Warrior and PopCorners. Soon that will also include Siete. Founder Veronica Garza started the company in 2014, when she began selling grain-free tortillas. Since then, its portfolio has grown to include tortilla chips, taco shells, salsas and seasonings, often designed to accommodate different dietary restrictions. Retailers like Target, Kroger, Whole Foods and CVS carry the company’s products.
Apparel & Footwear
Levi’s considers Dockers sale as brand reinvention bears fruit
Levi’s is exploring options for its Dockers brand—including a potential sale—after the latter’s poor sales weighed on the company’s performance in Q3. Dockers’ sales fell 15% year over year (YoY) on a reported basis for the quarter ended August 25, compared with 5% growth YoY for the Levi’s brand and a 19% increase for Beyond Yoga. That drove the retailer to miss revenue expectations and lower its full-year guidance. Levi’s now expects sales to grow 1% this fiscal year, falling short of LSEG’s estimate for a 2.3% rise; the retailer previously forecast revenue growth of between 1% and 3%.
Patagonia lays off 41 following corporate restructuring
Patagonia has laid off 41 people following a business restructuring at the company’s Ventura, California headquarters, CEO Ryan Gellert said in a Sep 30th post on LinkedIn. Those leaving represent about 1% of the company’s workforce, Patagonia said. As part of the restructuring, some new roles were created and filled by current employees. Many corporate roles evolved and some positions were eliminated, Gellert said. Going forward, the company said it will focus most of its teams on three functions — product, storytelling and impact. Although Patagonia is profitable, and the company is “getting more right than wrong,” changes were necessary because the outdoor apparel and gear retailer’s business is “vulnerable to the same economic headwinds many companies in our industry are facing,” the CEO said.
Alfred Chang Is Stepping in as Everlane CEO
Alfred Chang is stepping in as chief executive officer of Everlane and will work alongside founder Michael Preysman, who is continuing as executive chairman and climate lead of the sustainability-minded brand. He starts on Sep 30th. It’s a post that will let Chang tap into the full breadth of his résumé. Most recently, he was CEO of Fear of God, where he spent about a year and a half streamlining operational processes, implementing merchandising initiatives and marketing strategies and more. Before that, Chang logged 17 years at PacSun, rising to become co-CEO of the specialty retailer.
Athletic & Sporting Goods
Sweden’s Altor Equity purchases CCM Hockey for C$600M
Altor Equity Partners has won a “hotly contested battle for CCM Hockey,” buying Canada’s oldest hockey equipment maker for C$600M including debt, according to Andrew Willis of the GLOBE & MAIL. Sweden-based Altor, owner of ski maker Rossignol Group, outbid several rival private equity funds and sports companies to acquire CCM from Birch Hill Equity Partners, which bought the company in 2017 from German shoe giant Adidas AG. CCM has been making hockey sticks, pads and skates for over a century and holds approximately 35% of the global market share.
Nike withdraws guidance, postpones investor day as it gears up for CEO change
Nike said it was withdrawing its full-year guidance and postponing its investor day as it gears up for a new CEO to take the helm. Last month, the company announced that CEO John Donahoe would be stepping down in October and replaced with longtime company veteran Elliott Hill, effective Oct. 14. Given the impending CEO change, the company has decided to withdraw its full-year guidance and intends to provide quarterly guidance for the balance of the year, executives said. When reporting fiscal fourth-quarter results in June, Nike cut its guidance for fiscal 2025 and said it was expecting sales to be down mid-single digits after it previously expected them to grow.
Fairfax to Acquire Controlling Ownership of Peak Achievement Athletics
Peak Achievement Athletics, Inc. announced that certain affiliates of Fairfax Financial Holdings Limited would acquire all the equity interests in Peak currently owned by Sagard Holdings, Inc., giving Fairfax control over Peak and its brands, including Bauer Hockey, Cascade Lacrosse, and Maverik Lacrosse. In 2017, Fairfax and Sagard purchased Peak. With its roots starting in Kitchener, Ontario, in 1927, Bauer Hockey manufactures hockey equipment and apparel. Cascade Lacrosse and Maverik Lacrosse manufacture lacrosse head protection and equipment. The transaction is expected to close in the fourth quarter of 2024.
GSM Outdoors Acquires K&E Tackle
GSM Outdoors continues to grow its portfolio with the acquisition of K&E Tackle. K&E’s brands include Stopper Lures, Carlisle Floats, Bear Creek, Best Tackle, and Arnold Tackle. For over 70 years, the GSM family of brands has supplied hunters, shooters, knife enthusiasts, and anglers by manufacturing products that prove themselves in the field, on the range and the water. “We are incredibly excited to acquire and steward the historic brands under the K&E Tackle umbrella,” said Crispin Powley, GSM senior VP of Fishing. “Their emphasis on cold water, northern, midwestern, and multispecies fishing is a void in our current portfolio and a demographic that we believe is extremely important to the industry.”
Cosmetics & Pharmacy
Estée Lauder shuffles North America leadership
Estée Lauder Companies announced this week that Mark Loomis, group president of North America, will retire from the company after a 28-year career there, per a news release. Loomis will officially leave Estée Lauder at the end of the current fiscal year in June. He’ll be succeeded by Tara Simon, who will become president of North America, and Amber English, who will be president of digital and online in North America. Both executives will assume their new roles on Jan. 1 as part of a longer transition period. Simon will report to Fabrizio Freda, president and CEO, while English will jointly report to Freda and Gibu Thomas, executive vice president of online.
Women’s Health Company Perelel Acquires Sexual and Reproductive Health Company Loom
Perelel—the women’s health company defining a new era of radical body literacy and medically-backed, stage-specific women’s health support—is announcing the acquisition of LOOM, an educational community platform empowering women through reproductive health, sexual wellness, and parenting education. The acquisition reinforces Perelel’s commitment to democratizing access to women’s health information—a tentpole of their founding mission—while empowering women to take greater control of their bodies. Following the deal, Erica Chidi, LOOM’s Co-Founder and CEO, joins Perelel as a strategic advisor.
Euroitalia snaps up Moschino fragrance arm for €98 million
Euroitalia has agreed to buy Moschino’s fragrance and beauty arm from Italian fashion group, Aeffe, for €98 million. Euroitalia has held the exclusive Moschino license since 1987. The deal is expected to close at the end of November. According to a report published by Italian publication Pambianco Beauty, the agreement covers cosmetics, perfumes, scented candles and home fragrance. Aeffe told Reuters that the deal would help to reduce debt and support the expansion of its brands.
The Inkey List Co-founder to take reins as CEO
The Inkey List has named Mark Curry as its new CEO. Curry, who co-founded the brand with Colette Laxton, succeeds Stephanie Davis Michelman who has held the role since June 2023 and is stepping down ‘with immediate effect’. According to a report published by WWD, Laxton will continue in her current role, ‘overseeing brand guardianship and consumer direction’. The company did not provide any further details about the transitions, a reason for Davis Michelman’s departure or comment from Curry, per WWD.
CVS to lay off 2,900 employees amid reports of strategic review
CVS plans to lay off 2,900 workers amid swirling reports that the healthcare behemoth is undergoing a strategic review, including a potential breakup of its businesses. The layoffs, which were confirmed by a CVS spokesperson, will affect about 1% of CVS’ 300,000 employees. CVS unveiled a plan to cut $2 billion in costs this summer in a bid to bolster flagging operational performance amid rising costs for its health insurance arm Aetna and shaky reimbursement at its pharmacies.
Discounters & Department Stores
J.C. Penney names consulting chief marketing officer to bolster turnaround plan
Marisa Thalberg has joined J.C. Penney in the role of consulting chief marketing officer, the executive shared in a LinkedIn post. Thalberg jumps to the embattled department store chain from SeaWorld, where she served as marketing chief beginning in April of 2023. Before SeaWorld, Thalberg spearheaded marketing at companies like Lowe’s and Taco Bell, the latter of which she helped develop into a lifestyle brand with a fervid cult following. She joins J.C. Penney at a point of transition for the retailer, which last year announced a $1 billion turnaround plan inclusive of a new brand positioning emphasizing value for working families and a revamped loyalty offering.
Simon taps influencers to draw Gen Z to the mall
Simon Property Group on Monday launched “Meet Me @themall,” a new advertising campaign targeted at younger customers, specifically members of Gen Z, the company said in a press release. The real estate investment trust, which owns nearly 200 U.S. malls, said it’s partnering with over 250 mall-loving influencers and creators to drive awareness and engagement. The campaign is on Netflix, Hulu and other streaming services, along with Instagram, YouTube, TikTok and on Simon’s social channels. Simon said its campaign leverages Gen Z’s ’80s and ’90s nostalgia, including by reworking the hook of Simple Minds’ ’80s pop music hit “Don’t You (Forget About Me)” to “Won’t You (Meet Me at the Mall)” to cast malls as fun places to shop, eat and hang, the company said.
Kohl’s kicks off holiday shopping with October deals event
Joining other major retailers’ fall sales events, Kohl’s is kicking off its holiday shopping deals in October during its “3 Days of Deals” event. Savings will be on thousands of products across home, gifting, fall apparel, footwear, accessories, baby products and other categories, the company announced. From Oct. 7 to Oct. 9, the retailer is offering 25% discounts on select purchases with a coupon. Kohl’s will offer discounts on products from brands like Adidas, Nike and Levi’s. The company said it is also offering Kohl’s Rewards members free shipping and triple rewards on nearly everything, including Sephora at Kohl’s purchases.
Emerging Consumer Companies
Lucky Energy, the simpler, better-for-you energy drink company, announced the close of its oversubscribed $11.75 million Series A led by Brand Foundry Ventures with additional investment from Imaginary Ventures, Sapphire Sport, and Sugar Capital, among others. This brings the total funding raised to date to $26.5 million. The funds will be used to grow brand awareness and trial, support strategic partnerships, and accelerate retail growth as Lucky Energy looks to enter major retailers in 2025.
Homage Apparel raises growth capital from celebrities and athletes
Homage, the vintage-inspired sports and licensed apparel brand, announced the successful closing of its latest growth capital round. After being kicked off with an initial investment from Ryan Reynolds’ Maximum Effort, several prominent figures and organizations joined the round, including Winnie Capital (led by NFL star Jason Kelce), More Better (led by Emmy-winning creator, actor and entrepreneur Rob McElhenney), Adam Hansmann (co-founder of The Athletic), Haslam Sports Group (owners of the Cleveland Browns, Columbus Crew, and shared controlling owners of the Milwaukee Bucks), 35Ventures (led by Kevin Durant and Rich Kleiman) and Wheelhouse 360. The addition of this notable group of investors will further strengthen the company’s foothold in the sports, media, and entertainment industries. Homage plans to use this capital infusion to continue expanding production capabilities, grow its operating team, and strengthen its technology and marketing infrastructure. The brand also aims to scale its partnerships within the licensed product industry, where it already boasts collaborations with the NFL, NBA, WNBA, MLB, and other major pop culture entities.
Food & Beverage
Atalanta Acquires Big Picture Foods, Expanding Specialty Grocery Portfolio
Atalanta Corporation proudly announces the acquisition of Big Picture Foods™, a leader in the clean ingredient, Regenerative Organic Certified (ROC) movement. This marks Atalanta’s second acquisition of 2024, following the addition of J.A. Kirsch earlier this year. The strategic acquisition underscores Atalanta’s dedication to expanding its portfolio with high-quality products that cater to the increasing demand for sustainable and organic options. Big Picture Foods was founded with a passion for quality and transparency. The company has carved out a niche in the natural and specialty foods industry by offering delicious and responsibly sourced products. They have a refrigerated fresh and center-store grocery line of naturally fermented organic olives, peppers, and capers with no fillers or preservatives.
Belgian Chocolate Maker Gudrun Joins Natra to Create a Leading Global Chocolate and Sweets Platform
Natra, one of Europe’s largest vertically integrated private label and co-manufacturing platforms for chocolate products, and Gudrun, a leader in the development, production, packaging and commercialization of real Belgian chocolates and truffles, are joining forces to create a highly diversified, leading chocolate platform with a strong focus on premium quality, innovation and sustainability. The creation of the enlarged Group (“Group”) formed through this strategic and highly complementary combination, will see 100% of Gudrun being acquired by Natra from its current owner Down2Earth Capital in a move which will facilitate the ongoing growth and development of the two businesses. Terms of the transaction are not being disclosed.
Conagra Faces Rare Earnings Miss Amid Manufacturing Disruption
Consumer packaged goods giant Conagra is facing significant backlash after missing earnings expectations due to a larger-than-expected year-over-year sales decline in Q1. Known for brands like Slim Jim and Vlasic, Conagra had warned that FY25 would be a transitional year, but the company hasn’t missed top and bottom-line estimates since Q3 2020, making the results particularly surprising. Conagra experienced a manufacturing disruption, halting production at its Hebrew National hotdog plant during peak grilling season. Although operations have resumed, Hebrew National saw a 47% drop in sales year-over-year. This issue reduced consolidated volumes by 60 basis points and total organic sales by 90 basis points.
Nissin Foods buys Australian frozen dumpling manufacturer ABC Pastry
Nissin Foods has acquired 100% of the shares of ABC Pastry for AUD 33.7 million (approx. $23.26 million). Once the transaction is complete, ABC Pastry will become a wholly-owned subsidiary of Nissin. Based in Sydney, Australia, ABC Pastry is a national manufacturer of premium quality dumplings. The companies believe that Nissin Foods’ acquisition will provide valuable expertise and experience in the operational and financial management of ABC Pastry, contributing to its long-term development while enabling Nissin to diversify its business portfolio. This diversification is set to broaden Nissin’s income sources, benefitting it and its shareholders. The deal will also enable Nissin Foods to strengthen its position in Australia’s frozen food market – Nissin says that the country’s frozen food market size is expected to experience ‘robust growth’ as frozen dumplings, in particular, have been benefitting from the rising Asian migration to Australia.
Grocery & Restaurants
McDonald’s largest franchisee is working on a renewal agreement
Arcos Dorados Holdings Inc., Latin America’s largest restaurant company and the world’s largest independent McDonald’s franchisee, said it will renew its master franchise agreement with the quick-service giant. Arcos Dorados received a renewal notice from McDonald’s Aug. 1 to replace the parties’ existing MFA with a new, 20-year MFA to be effective Jan. 1, 2025. The franchisee shared its intention to exercise its renewal option on Monday and the parties are now working to finalize the new agreement. In addition to renewing the partnership through Jan. 1, 2045, the agreement is also expected to include a 6% royalty rate for the first 10 years, 6.25% for the subsequent five years, and 6.5% for the final five years. In addition to a steady royalty rate for the next decade, Arcos Dorados and McDonald’s expect the renewed agreement to support additional growth in the franchisee’s 20 existing countries and territories, with approximately 90 to 100 new units expected to open in 2025.
500 Starbucks locations have voted to unionize
Baristas at a Starbucks in Bellingham, Washington, became the 500th store to join the Starbucks Workers United union on Monday. Since the first location voted to unionize in 2021, more than 11,000 baristas have joined the union, according to a Tuesday press release. “This milestone is a testament to workers building power from the ground up,” said Lynne Fox, president of Workers United. “Starbucks partners have boldly demanded a voice on the job and with it, strong contracts that ensure respect, living wages, racial and gender equity, fair scheduling and more.” The union and Starbucks announced together in February that negotiations would be taking place through a collaborative process to work toward a foundational framework. They have been meeting at the bargaining table monthly since April, and 100 new locations have successfully unionized in the past six months, the union said. CEO Brian Niccol, who assumed the coffee chain’s top spot in September, said last week that the company is committed to bargaining in good faith with the union as the two sides work to craft a labor deal. The framework they are negotiating would be the basis for collective bargaining agreements between individual stores and the company.
Home & Road
Target’s home sales fell short in 1st half of 2024
While Target’s apparel business has rebounded to positive growth, the retailer’s home furnishings and décor segment is still lagging. During the first half of the fiscal year, ended Aug. 3, home sales dropped nearly 5% to $7.4 billion. The segment includes furniture, bed and bath, home décor, school/office supplies, storage, small appliances, kitchenware, greeting cards, party supplies, lighting, home improvement, and seasonal merchandise. The decline came on top of a 12.4% decrease in the first six months of 2023. Target hasn’t generated first-half sales gains in the segment since 2021, when pandemic-fueled spending was still buoying the category across retail. Home furnishings and décor was one of only two segments that showed a year-over-year sales decline during the first half of this year. The other was hardlines, down 4.3%, which includes electronics, video games and consoles, toys, sporting goods, entertainment and luggage.
Retail rewrite: ABC Carpet & Home reshapes business using a multifaceted plan
By blending the “integrity, soul and legacy” of its past with fresh edits to bring the brand forward, ABC Carpet & Home has continued to make strides since emerging from bankruptcy a few years ago. The laundry list of actions taken by the 127-year-old retailer include increasing its e-commerce trade, refreshing popular categories and turning an eye toward expansion. ABC has steadily built its online presence, according to Suki LaBarre, vice president-merchandising and e-commerce. “E-comm plays a critical role in our overall merchandising strategy because it allows us to take the magic of the assortment that lives in the store and expand it 10 times and offer it to clients who don’t live in New York City,” she said. The online channel evolves weekly and is “becoming a larger piece of the pie each quarter,” said LaBarre.
Jewelry & Luxury
Off-White sold to Bluestar Alliance
LVMH announced it sold the Virgil Abloh-founded brand to brand management company Bluestar Alliance, which owns brands including Scotch & Soda, Hurley, Bebe, Catherine Malandrino and American teen brands Justice and Limited Too. The companies are not disclosing the terms of the transaction. Off-White was founded by Virgil Abloh in 2012. He remained at the helm of the Milan-based brand until he passed away in November 2021, just four months after he sold a 60 per cent stake to LVMH.
Pandora Names 3rd CMO in Past 5 Years
Pandora has named a new chief marketing officer, the third person to hold the position since 2019. The company announced Wednesday that it has appointed Berta de Pablos-Barbier as its new CMO, replacing Mary Carmen “MC” Gasco-Buisson, who joined the retailer in 2022. Gasco-Buisson is leaving Pandora to take on a new role in the U.K., the company said. She replaced Carla Liuni, a former Bulgari executive who joined Pandora in 2019. “I would like to thank MC for the strong contribution she’s made to our brand and company. We wish her the very best,” said Pandora CEO Alexander Lacik. New CMO De Pablos-Barbier has more than 30 years of experience in the luxury and consumer goods industries. Most recently, she was president and CEO of LVMH-owned champagne brands Moët & Chandon, Dom Perignon, and Mercier.
Office & Leisure
Caesars to Repurchase Up to $500M in Stock, Sell $1B in Debt
Caesars Entertainment announced on Oct 2nd that its board of directors approved a $500M share buyback program and that it will sell $1 billion in corporate bonds. It’s the first new return of capital to shareholders by the gaming company in several years and meshes with previous expectations that the casino giant would look to repurchase its stock as it reduces debt. In a Form 8-K filing with the Securities and Exchange Commission (SEC), Caesars noted the $500 million figure isn’t binding and the start of the buyback plan “will be determined at a future date depending on market conditions and other factors.”
PetSmart CEO J.K. Symancyk Resigns
PetSmart president, CEO and board member J.K. Symancyk is stepping down from his role, effective immediately. Alan Schnaid, who has served as the company’s executive vice president and CFO since 2017, will serve as interim president and CEO until a successor is in place. The company’s Board of Directors has already initiated a CEO search in partnership with a leading executive search firm. “On behalf of the Board and all of the pet-passionate associates at PetSmart, I want to thank J.K. for his meaningful contributions to the Company over the last six years,” said Raymond Svider, chairman of the Board of Directors. “J.K. led the company through significant growth, including during the COVID-19 pandemic.”
Spirit Airlines shares slide after report of possible bankruptcy filing
Spirit Airlines is in talks with bondholders over the terms of a potential bankruptcy filing in the wake of its failed merger with JetBlue Airways, the Wall Street Journal reported on Oct 3rd, sending its shares down 30% in extended trading. The airline has also been exploring restructuring its balance sheet through an out-of-court transaction, though recent talks have been more focused on reaching a deal with bondholders and other creditors to support a Chapter 11 filing, the WSJ reported, citing people familiar with the matter. The timing of such a filing, should it happen, would not be imminent, according to the report. In response to the WSJ report, Spirit pointed to the company’s second-quarter earnings call where CEO Ted Christie said the company was in talks with the advisers of its bondholders to address the upcoming debt maturities, due in 2025 and 2026.
Technology & Internet
Apple is turning to its army of developers for an edge in the AI race
As Apple prepares Apple Intelligence to jump into Silicon Valley’s AI race, it’s relying on one of its strongest advantages: Its army of 34 million app developers. IPhone users will get their first taste of Apple Intelligence, the company’s artificial intelligence system, later this month. The company is relying on Apple Intelligence to be the strongest selling point for the iPhone 16, its latest generation of smartphones. Apple’s AI isn’t as advanced as the state of the art coming out of the most advanced labs, such as rivals like OpenAI’s ChatGPT, Google’s Gemini and Meta’s Llama. Apple isn’t using the biggest models, nor can it pull off some of the more show-stopping tricks of the bleeding-edge voice models — OpenAI’s latest can sing, for example. Where Apple is hoping to distinguish its AI is that Siri may actually be able to do things on your phone — send emails, decipher calendars and take and edit photos. That’s something other company’s AI chatbots cannot currently do, and to accomplish this, Apple is beckoning its army of third-party developers to fine tune their apps to collaborate with Apple Intelligence.
Oura Ring 4 smart ring announced for $349, releases Oct. 15
Oura unveiled its new smart ring, the Oura Ring 4, on Thursday, which is available starting at $349. The company’s rings track sleep, exercise, stress, heart health and other metrics to help users understand their bodies and make healthier choices. The Oura Ring 4 has new sensors, a sleeker design and up to eight days of battery life. Oura said it developed a new “Smart Sensing” platform that uses an algorithm and updated sensors to capture more accurate readings for blood oxygen sensing, daytime and nighttime heart rate and breathing disturbances. In addition to the upfront cost, users will have to pay for a membership of $5.99 a month or $69.99 a year. The company also announced a new design for its app, which is now rolling out to Oura members. Oura said new features are coming to the app as well.
Finance & Economy
Powell indicates further, smaller rate cuts, insists the Fed is ‘not on any preset course’
Federal Reserve Chair Jerome Powell said on Sep 30th that the recent half percentage point interest rate cut shouldn’t be interpreted as a sign that future moves will be as aggressive, in fact indicating the next moves will be smaller. The central bank chief asserted during a speech in Nashville, Tennessee, that he and his colleagues will seek to balance bringing down inflation with supporting the labor market and let the data guide future moves. “Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral stance. But we are not on any preset course,” he told the National Association for Business Economics in prepared remarks. “The risks are two-sided, and we will continue to make our decisions meeting by meeting.”
U.S. job creation roared higher in September as payrolls surged by 254,000
The U.S. economy added far more jobs than expected in September, pointing to a vital employment picture as the unemployment rate edged lower, the Labor Department reported Oct 4th. Nonfarm payrolls surged by 254,000 for the month, up from a revised 159,000 in August and better than the 150,000 Dow Jones consensus forecast. The unemployment rate fell to 4.1%, down 0.1 percentage point. With upward revisions from previous months, the report eases concerns about the state of the labor market and likely locks in the Federal Reserve to a more gradual pace of interest rate reductions. August’s total was revised up by 17,000, while July saw a much larger addition of 55,000, taking the monthly growth up to 144,000.
Port strike ends as workers agree to tentative deal on wages and contract extension
A major union for U.S. dockworkers and the United States Maritime Alliance agreed on Oct 3rd to a tentative deal on wages and have extended their existing contract through Jan. 15 to provide time to negotiate a new contract. The move ends a strike that had snarled East Coast and Gulf Coast ports since the beginning of the week and threatened U.S. supply of fruits, automobiles and other goods. “The International Longshoremen’s Association and the United States Maritime Alliance, Ltd. have reached a tentative agreement on wages and have agreed to extend the Master Contract until January 15, 2025 to return to the bargaining table to negotiate all other outstanding issues,” The ILA and the USMX said in a joint statement.
