Story of the Week
J.C. Penney and Sparc Group merge to launch Catalyst Brands
J.C. Penney and Sparc Group announced on Wednesday a new joint venture that combines their retail expertise and portfolios into one organization. Dubbed ‘Catalyst Brands’, the organization brings together six banners including J.C. Penney, Aéropostale, Brooks Brothers, Eddie Bauer, Lucky Brand, and Nautica. It launches with over $9 billion in revenue, 60,000 employees, and $1 billion in liquidity. The joint venture, formed in an all-equity transaction, is backed by shareholders Simon Property Group, Brookfield Corporation, Authentic Brands Group, and Shein, further solidifying its financial and operational strength. Catalyst Brands will leverage its combined strengths in product design, sourcing, and advanced data analytics to enhance supply chain operations, improve inventory management, and deepen customer relationships. Coinciding with the announcement, Catalyst Brands said it has sold the U.S. operations of Reebok and is exploring strategic options for the operations of Forever 21.
Apparel & Footwear
True Religion acquired by ACON to boost global presence
ACON Investments and its affiliates announced the acquisition of a controlling stake in True Religion, a lifestyle, apparel, and accessories brand known for its quality craftsmanship, unique designs, and premium stitching. Financial terms of the transaction were not disclosed. Founded in 2002, True Religion has been a staple in the global denim and apparel industry for more than two decades. True Religion is an omnichannel retailer with a large and rapidly-growing ecommerce platform, a footprint of more than 51 branded retail locations, and a plethora of longstanding wholesale partners. ACON has consistently and successfully implemented a multi-pronged strategy in order to drive growth and value in such brands. The transaction is supported by both new and continuing limited partners of ACON including its strategic partner, SB360 Capital Partners, a Schottenstein affiliate and established investor in apparel and retail.
Carter’s parent names interim leader as CEO retires
Carter’s, Inc. has appointed Chief Financial and Operating Officer Richard Westenberger interim chief executive officer, the company announced on Jan 7th. Westenberger has been with the children’s apparel company since 2009. Westenberger succeeds Michael Casey, who is retiring after 15 years as CEO and 30 years with the company. Casey will stay on until Feb 28th to support the leadership transition, Carter’s said. The leadership changes are effective immediately. Carter’s also said that it is maintaining its previously announced fiscal year guidance. The company anticipates net sales ranging from $2.79 billion to $2.83 billion. The company plans to report its fourth quarter and full-year results next month.
Chris Quinn took over as CEO of Shoes for Crews on Jan 1st, the company said. Quinn had served as a director of the slip-resistant footwear maker since August. Before joining Shoes for Crews, Quinn was CEO of iDesign, a global houseware company. His past roles also include serving as president and CEO of Step2 Company, a toy and outdoor goods manufacturer, and as executive vice president of sales and retail at New Balance. As part of the leadership transition, CEO Donald Watros retired on Dec 31 after serving in the role since 2017. Watros will stay on as a senior adviser, per a press release. The appointment comes less than a year after Shoes for Crews filed for Chapter 11 in April and exited bankruptcy in July following a sale to its first lien-secured lenders.
Athletic & Sporting Goods
Northleaf Capital Partners joins with Altor Equity Partners in CCM Hockey deal
Canadian investment firm Northleaf Capital Partners has partnered with Swedish private equity firm Altor Equity Partners to invest in CCM Hockey. Financial terms of the agreement were not disclosed. Altor, which owns ski maker Rossignol Group, announced last year it had signed a deal to acquire a “significant” majority stake in CCM from Birch Hill Equity Partners. Established in 1899, CCM is a major manufacturer of hockey sticks, skates and pads.
Mueller Sports Medicine Acquires the Pro Orthopedic Brand
Mueller Sports Medicine, a global leader in the design, manufacture and distribution of high-quality sports medicine products, proudly announces the acquisition of the iconic Pro Orthopedic brand, a renowned provider of Neoprene products for both high-level athletes and active individuals to live under the Mueller Sports Medicine family of products. The acquisition marks a significant benchmark in Mueller Sports Medicine’s long-term strategy to expand their product portfolio and global reach within the professional/institutional market. Since 2019, Mueller Sports Medicine has been the exclusive distributor of Pro Orthopedic Device’s Pro Compression Bandage and Scissors products. By integrating Pro Orthopedic’s advanced technologies and specialized product offerings into the Mueller portfolio, Mueller and Pro Orthopedic will continue delivering cutting-edge solutions to help athletes stay in the game.
Cosmetics & Pharmacy
Ulta Beauty Announces CEO Transition
Ulta Beauty has announced that Dave Kimbell will retire as CEO and step down from the company’s Board of Directors. Kecia Steelman, currently President and COO, will succeed him as President and CEO on January 6, 2025. Dave Kimbell, who has been with Ulta Beauty since 2014 and became CEO in 2021, will remain as an advisor to the company through June 28, 2025. During his tenure, Ulta Beauty grew to over $11 billion in annual revenue and expanded its market presence. Kecia Steelman, who joined Ulta Beauty in 2014 and was named President and COO in 2023, will assume her new role as CEO and join the company’s Board. Steelman has been involved in shaping Ulta Beauty’s strategic direction and overseeing its operation. The transition reflects Ulta Beauty’s leadership succession plan, with Steelman set to guide the company through its next phase of growth. This move ensures continuity in leadership and reinforces the company’s strategic focus on operational excellence and market expansion.
CVC Capital Finalizes Acquisition of Serin Company in US$600 Million Deal
British private equity firm CVC Capital has announced its acquisition of Serin Company, the cosmetics manufacturer behind the Round Lab brand and its cult-favorite product, the Dokdo Toner. The deal, valued at approximately 800 billion won (US$600 million), includes the full acquisition of a 100% equity stake from Calypso Capital and Meritz Securities, who are poised to achieve a three to fourfold return on their 2022 investment of 230 billion won. CVC Capital’s acquisition of Serin Company underscores the attractiveness of the K-beauty industry, which continues to command global attention for its innovation and natural ingredient focus.
Tru Fragrance & Beauty Acquires Lake & Skye
Tru Fragrance & Beauty has acquired Lake & Skye with the aim to scale the brand’s growth. A longtime brand partner, Tru Fragrance & Beauty made a minority investment in the brand in 2018. The capital infusion and closer alliance with Tru Fragrance & Beauty (which now takes a majority stake) will enable Lake & Skye to more aggressively grow its consumer base, support national retailer partners including Ulta, Nordstrom and Blue Mercury, officials said. “This acquisition marks an inflection point for our brand. Tru Fragrance & Beauty has played a pivotal role in Lake & Skye’s growth since 2018, and I’m excited to deepen our collaboration and continue our upward trajectory,” said Courtney Somer, CEO and founder of Lake & Skye.
Nu Skin Enterprises announces strategic transaction of Mavely for $250M
Nu Skin Enterprises Inc. announced that its Rhyz Inc. subsidiary completed a strategic transaction with Later, a portfolio company of Summit Partners. As part of the transaction, Rhyz sold its Mavely affiliate marketing technology platform to Later in exchange for approximately $250 million in the form of cash and a minority equity stake in the combined Later/Mavely business. Approximately $33 million of such consideration will be paid to other equity holders in the Mavely business. In connection with the transaction, Mavely is expected to continue to provide certain technology and social commerce capabilities to support Nu Skin’s affiliate marketing business.
Discounters & Department Stores
Costco’s December Sales Sparkle. Thank E-Commerce.
Costco Wholesale just gave investors the best belated holiday present: a strong December sales report. The company’s net sales for December rose 9.9% year-over-year to $27.52 billion, Costco said, accelerating from November’s 5.6% yearly increase. Total company same-store sales increased by 7.4% from a year prior, a notable jump from November’s 3.1% increase. The discrepancy between November and December’s performance can be explained by the timing of Thanksgiving and Black Friday weekend, which was unusually late in the year. Sales that would have normally happened in November got pushed back to early December.
Emerging Consumer Companies
Wellful acquires Ancient Nutrition
Wellful, a premier omni-channel health and wellness platform, announced the acquisition of Ancient Nutrition from VMG Partners, Hillhouse Investment and other unit holders. Wellful combines advanced e-commerce technology with scientifically formulated solutions to help consumers live happier and healthier lives across its portfolio of vitamin, supplement, and food brands. The acquisition of Ancient Nutrition will further strengthen Wellful’s omnichannel presence in a number of vitamin, mineral, and supplement (VMS) categories and expand its distribution footprint into the natural retail channel. Wellful’s portfolio of clinically studied wellness brands includes such brands as Nugenix, Ancient Nutrition, Peptiva, Instaflex, Super Beta Prostate, Doctors’ Preferred, Jenny Craig, and Nutrisystem. Wellful is a Kainos Capital portfolio company.
Whatnot raises $265 million to bring live shopping mainstream
Live shopping marketplace Whatnot is planning to expand after raising $265 million. The company’s Series E funding round, led by venture capital groups Greycroft, DST Global and Avra, brings Whatnot’s valuation to $4.97 billion. Whatnot said that the capital will help Whatnot promote the mainstreaming of livestream selling. The company hosts more than 175,000 hours of livestreams each week, and daily viewers are engaged for an average of 80 minutes per day, per the spotlight. There are over 140 categories, from collectibles to women’s fashion.
Siren, smart sock brand with temperature control, raises $9.5 million
Siren, the smart sock brand focused on controlling diabetic foot ulcers, has raised $9.5 million in a funding round led by Mölnlycke Health Care, which invested $8 million. The round also saw participation from new and existing investors. With this round, the total funding raised by the company accounts for $43 million. The investment will help the company advance the development and adoption of its innovative diabetic foot ulcer (DFU) prevention solutions. The partnership combines Mölnlycke’s market knowledge and established presence in wound care with Siren’s groundbreaking technology, setting the stage for a future where DFUs can be prevented before they even occur.
Food & Beverage
Wonder bread owner buys Simple Mills for $795M
Wonder bread manufacturer Flowers Foods is buying better-for-you snacks maker Simple Mills for $795 million. The purchase of Simple Mills will improve the bread maker’s growth prospects and diversify its portfolio with the addition of crackers, cookies, snack bars and baking mixes. Simple Mills, which was founded in 2012, is a producer of premium better-for-you crackers, cookies, snack bars and baking mixes. The company generated 2024 net sales of $240 million, representing 14% growth compared to the prior year. The deal is expected to close in the first quarter of 2025. While Flowers is best known for its bread and sweet treats like Tastykake, the Georgia-based company has been moving into trendier segments of the food space in recent years.
Butterfly Equity (“Butterfly”), a Los Angeles-based private equity firm specializing in the food and beverage sector, announced on Jan 7th that Robert Hanson, a former Constellation Brands executive and renowned consumer brands industry veteran, has been appointed Chief Executive Officer of The Duckhorn Portfolio, North America’s premier luxury wine company. Mr. Hanson succeeds Deirdre Mahlan, President and Chief Executive Officer, who will work closely with Mr. Hanson and the Duckhorn senior leadership team to ensure a seamless transition through Feb 1st, 2025, the beginning of the Company’s fiscal third quarter, and will continue as an advisor to Mr. Hanson thereafter.
Private equity firm Advent International is acquiring Sauer Brands Inc. from Falfurrias Capital Partners. Details of the transaction were not disclosed. Sauer’s portfolio of condiment and seasoning brands includes the Duke’s Mayo, Kernel Season’s, Mateo’s Gourmet Salsa and The Spice Hunter brands. “With a more than 135-year history, Sauer Brands has established itself as a standout player in the highly attractive condiments and seasonings categories,” said Tricia Glynn, managing partner at Advent International. “It’s easy to see why consumers have long been drawn to Duke’s differentiated taste profile and we are excited to share this well-loved brand with a growing consumer base.
MBC expands into pizza with Nardone Brothers acquisition
Frozen baked breakfast foods maker MBC Companies has expanded its product portfolio with the acquisition of frozen pizza manufacturer Nardone Brothers Baking Co. MBC said the transaction, announced Jan 7, also extends its market reach beyond breakfast and into the lunch, dinner and late-night dining segments. Financial terms of the agreement weren’t disclosed. A manufacturer and distributor of frozen breakfast items, Tennessee-based MBC specializes in french toast sticks and bites, waffles, pancakes, breakfast sandwiches and other baked foods for the K-12 schools, private label retail, convenience store and quick-serve restaurant markets. Pennsylvania-based Nardone Brothers serves most of the same North American channels, namely K-12 school lunch programs, private label retail and convenience stores. Its frozen product lineup spans multi-serve and personal round, stuffed crust, self-rising crust, french bread, wedge and breakfast pizzas, as well as pizza bagels, pizza shells and breadsticks, among other items.
Grocery & Restaurants
Rita’s Italian Ice gets a majority investment from PE firm
Private equity firm Maple Park Capital Partners has acquired a majority stake in Rita’s Italian Ice & Frozen Custard. Terms of the deal were not disclosed. Pennsylvania-based Rita’s Italian Ice & Frozen Custard was founded in 1984 and has grown to more than 575 shops around the world. In a statement, chief executive officer Linda Chadwick said the Italian ice concept is eager to partner with Maple Park given its experience in scaling businesses. “This investment marks an exciting milestone in Rita’s journey and positions us well for continued strong growth and expansion with our franchise partners,” she said. Alexander Blankfein, co-founder and managing partner at Maple Park, said his company will provide growth capital and operational resources to support Rita’s continued expansion. In 2023, Rita’s year-over-year sales grew by 9%, to $182.2 million, while its footprint grew by 4.2%, to 547 locations, according to Technomic data.
Kelly’s Roast Beef brand acquired by AAM15 Management Group
The Kelly’s Roast Beef brand — the 15-unit, Massachusetts-based regional quick-service chain — has been acquired by private equity management group, AAM15. The 70-year-old brand, along with its four flagship locations in Massachusetts, will now be owned and operated by AAM15 Management Group, adding to its portfolio of hospitality, residential real estate, country club, and restaurant properties. “Growing up in this region, Kelly’s was always a part of my life. It’s more than just a restaurant—it’s a symbol of community and tradition,” David Masse, founder and CEO of AAM15 Management, said in a statement. “We’re proud to take on the responsibility of continuing Kelly’s legacy and ensuring it thrives for generations to come.” Kelly’s Roast Beef, known for its signature roast beef sandwiches and deep roots in New England communities, will explore opportunities for future expansion while remaining true to its heritage under AAM15’s leadership guidance.
Artistry Restaurants acquires 20-unit Hickory Tavern
Artistry Restaurants has acquired the 20-unit Hickory Tavern casual-dining concept, the company said Monday. The Winter Park, Fla.-based company said the acquisition of the tavern concept, founded in 1997, expands its footprint into North Carolina and South Carolina for the first time. Terms of the deal were not disclosed. Charlotte, N.C.-based Hickory Tavern is the seventh brand in the 30-unit Artistry’s portfolio and brings the company’s total managed locations to 50. “Hickory Tavern has a long history of serving the community, with each location a cherished gathering spot for locals,” Bryan Lockwood, Artistry’s CEO, said in a statement. “Hickory’s concept and its reputation for uncompromising service make it a perfect fit within our portfolio of brands as we continue to expand our footprint within the industry.”
Home & Road
Iconic design brand Jonathan Adler acquired by consumer investment firm
Consortium Brand Partners (CBP), a consumer investment firm, has acquired Jonathan Adler, the iconic home décor, furniture and lifestyle company founded by Jonathan Adler more than three decades ago. CBP, together with American Exchange Group, a leader in fashion accessory, design, manufacturing and distribution, closed the transaction last month, a release said. The purchase price was not disclosed. “Jonathan Adler’s exceptional talent and vision have made the brand a beloved leader in home design for decades,” said Jonathan Greller, president and co-founder of Consortium Brand Partners. “This acquisition not only expands our offerings in the home décor space but also enhances our ability to create compelling and timeless brand experiences that resonate with consumers across multiple lifestyle categories in a fun and beautiful way.”
Hydro Flask Adds Velocity with Expanding Amazon, Target and Costco Programs
Helen of Troy Limited, parent of the Hydro Flask, Osprey and OXO brands, relied on the three brands in the company’s Home & Outdoor for positive momentum in the fiscal third quarter ended November 30, 2024 to partially offset declines in the company’s Beauty & Wellness segment. Net sales in the Home & Outdoor segment increased 4.3 percent year-over-year to $246.1 million, compared to $235.9 million in the year-ago Q3 period, with growth from all three brands. The segment sales increase was said to be primarily driven by net gains in retailer distribution in the insulated beverageware and home categories, higher international sales due to new and expanded retailer distribution in the insulated beverageware category and strong demand for technical packs, and an increase in club channel sales in the insulated beverageware category.
Rize Home has acquired direct-to-consumer and furniture brand Floyd Home, making it the first acquisition in the industry for the new year. Rize, best known for its adjustable bed bases, mattresses and furniture, said the new partnership will allow for a seamless omnichannel experience for its retail partners and consumers. The company said the acquisition gives Floyd access to resources in manufacturing, logistics and sourcing, enhancing its ability to deliver furniture to its customers. Floyd Home is known for its sustainable and adaptable upholstery, bedroom, dining, home office and occasional products. This is the second acquisition the company has made in two years. In mid-2022, Rize acquired Glideaway.
Solstice Sleep expands reach with new upholstery company acquisition
Solstice Sleep Products has acquired upholstery and mattress manufacturer Woodhaven from Aaron’s, the lease-to-own home goods retailer. Woodhaven will now operate as Woodhaven Enterprises, an affiliate of privately-held Solstice Sleep. While terms of the transaction were not disclosed, executives told Furniture Today that the deal is a strategic win for both companies. For Aaron’s, the divestiture allows it to focus on its core business in its Aaron’s stores and BrandsMart USA locations. Meanwhile, Solstice Sleep expands beyond the mattress category into domestically produced upholstery and looks grow the brand into new distribution channels.
Jewelry & Luxury
De Beers, GJEPC Form New Natural Diamond “Alliance”
De Beers Group and India’s Gem & Jewellery Export Promotion Council (GJEPC) have announced a strategic collaboration to “strengthen the natural diamond narrative” in India. The new Indian Natural Diamond Retailer Alliance (INDRA) will support Indian retailers with multilingual marketing assets and training, as well as tech tools that use artificial intelligence to create customized campaigns. “The Indian gem and jewelry market, currently valued at $85 billion, is poised for rapid growth, projected to reach $130 billion by 2030,” said GJEPC chairman Vipul Shah in a statement. “INDRA is designed to harness this momentum by tapping into India’s dynamic young population, the rise of organized players, and increasing demand across bridal, everyday wear, fashion, and entry-level jewelry.”
Choron Group Buys De Beers Sightholder AMC
Antwerp-based diamond company Choron Group has acquired De Beers sightholder AMC Group, effective Jan 1st, and will integrate AMC’s facilities into its international network. AMC (Arodiam Manufacturing Company) has been headquartered in Antwerp since 1988. It has sales offices in Hong Kong and Shanghai and manufacturing facilities in Belgium and South Africa. The transaction was initiated and facilitated by the Bonas Group, a diamond industry brokerage and consultancy. No financial details were provided. David Parnas, CEO of the AMC Group, said in a statement: “On behalf of the Parnas and Mai families, we are delighted to join forces with the Choron Group…. This takeover ensures a bright future for our combined operations.”
Office & Leisure
Flutter Cuts 2024 Revenue Outlook Amid ‘Customer Friendly’ Outcomes
Shares of Flutter Entertainment traded lower by nearly 2% after-hours on January 7th after the FanDuel parent lowered its 2024 earnings and revenue guidance, citing unusually weak results on NFL wagers. The company now expects 2024 revenue of $5.78 billion, down from a prior forecast of $6.05 billion to $6.25 billion. EBITDA is expected to be $205 million lower than the previously issued midpoint of $505 million. For the fourth quarter, the operator expects EBITDA of $161 million on sales of $1.59 billion and headwinds in the October through December period.
Infinite Reality secures $3bn in funding
Metaverse platform Infinite Reality has raised $3 billion in a funding round, bringing the firm’s total valuation to $12.25 billion. As reported by GamesBeat, the funding was led by a private investor. Infinite Reality will use this investment to grow its platform and continue acquisitions, partnerships, and product launches. “We are absolutely ecstatic to share this news with our customers [and] businesses all over the world,” said CEO and co-founder John Acunto. “This [fundraising round] allows us to continue investing in our customers as they strive to be active participants in today’s technological advancements.”
Technology & Internet
TikTok ban likely to be upheld by Supreme Court
The Supreme Court on Friday heard oral arguments in the case involving the future of TikTok in the United States, and a law that could effectively ban the popular app as soon as next week. The Protecting Americans from Foreign Adversary Controlled Applications Act targets TikTok and will impose harsh civil penalties on app “entities” that carry the service after a Jan.19 deadline. Among several issues the justices considered was whether the law violates the Constitution’s free speech protections. During the over two-hour long argument, justices repeatedly questioned TikTok’s head lawyer about the social media platform’s ties to the People’s Republic of China. And they seemed generally unconvinced by TikTok’s main argument, that the law violates the free speech rights of its millions of individual users in the United States. Still, questions remain about president-elect Donald Trump’s willingness to enforce the law once he assumes office, just a day after it goes into effect. If Trump decides not to enforce violations, third-party service providers like Apple and Google will face a dilemma: Whether to follow the letter of the law or put their trust in the new administration’s assurances that they can effectively ignore it.
Ebay shares soar as Meta allows listings on Facebook Marketplace
Shares of eBay closed up 9% on Wednesday as Meta said it will allow some listings to show up on Facebook Marketplace, its popular platform connecting consumers for local item pickups and more. EBay stock reached its highest level since November 2021. The rollout will begin with a test in Germany, France and the United States, where buyers will be able to view listings directly on Marketplace and complete the rest of their transactions on eBay, Meta said in a release. The partnership could provide a boost to eBay’s marketplace business, which has struggled to compete with e-commerce rivals like Amazon, Walmart, Temu and even Facebook’s own marketplace platform that lets users buy and sell items. EBay has recently embraced niche categories like collectibles and luxury goods to try and keep buyers and sellers returning to its site.
Finance & Economy
Mortgage rates jump again, approaching 7% barrier
Mortgage rates increased for the fourth straight week, inching closer to 7%. The average 30-year mortgage rate was 6.93% in the week through January 8th, according to Freddie Mac data, up from 6.91% a week earlier. Fifteen-year mortgage rates rose a single basis point to 6.14%, from 6.13%. The latest jump comes after 10-year Treasury yields, which mirror mortgage rates, rose after new economic data released this week pointed to stickier inflation and more job openings — both factors that complicate the Fed’s rate-cutting path.
US consumer inflation expectations soar in January on tariff fears
U.S. consumers expect inflation to increase over the next 12 months and beyond, likely reflecting concerns that broad tariffs on imports pledged by President-elect Donald Trump’s incoming administration could raise prices for households. The University of Michigan’s survey showed consumers’ one-year inflation expectations jumped to 3.3% in January, the highest level since May, from 2.8% in December. That raised the 12-month inflation expectations above the 2.3%-3.0% range seen in the two years prior to the COVID-19 pandemic. Long-run inflation expectations soared to 3.3%, the highest level since June 2008, from 3.0% in December.
December jobs report shows unemployment fell to 4.1%, 256,000 jobs added to finish 2024 on high note
The US economy added more jobs than forecast in December while the unemployment rate unexpectedly fell. Data from the Bureau of Labor Statistics released on Jan 10th showed 256,000 new jobs were created in December, far more than the 165,000 expected by economists and higher than the 212,000 seen in November. The unemployment rate fell to 4.1% from 4.2% in November. December marked the most monthly job gains seen since March 2023. Revisions to the unemployment rate in 2024 also showed that the labor market was stronger than initially thought. The cycle high for the unemployment rate had initially been 4.3% in July, but that figure was revised down to 4.2% in the January 10th release. “There is no denying that this is a strong report,” Jefferies US economist Thomas Simons wrote in a note to clients on Jan 10th.
