We are excitedly counting down the months and weeks until the Consensus Great Brands Show (CGBS), which will take place September 25th, at the New York Times TimesCenter in Manhattan – https://greatbrandsshow.com/. With the date of the CGBS approaching, we are using this space each week to profile a different company that will be taking the stage in September. As we strive to assemble the most compelling slate of participating companies yet in the history of this event, we hope our weekly previews underscore our growing anticipation for this year’s show and give you a head start on learning about these dynamic brands and entrepreneurs.
The first Altar’d State boutique was opened in 2009, in Knoxville, Tennessee, with one idea on the mind of founders Aaron Walters and Brian Mason: to create a brand that could make the world a better place. Walters’ and Mason’s retail backgrounds included experience at retailers such as Wal-Mart, Saks Inc. and many more. With a keen understanding of catering and selling to a retail consumer, the duo also believed that this industry and its way of engaging the guest could and should be approached differently. At the core of this new way of retailing was the mission to give back and make the world a better place. Today, with over 100 boutiques across the United States, Altar’d State and its 2000 plus family of employees “stand out. For good” and continue to grow and deliver on Walters’ and Mason’s initial vision.
Altar’d State designs and sells on-trend, fashionable womenswear, footwear, accessories, home items, and beauty products with approximately 90% of inventory bearing the Altar’d State label. The company prides itself on high-quality fashion and beauty selections and has also recently launched a sister brand, A’Beautiful Soul, which specifically serves women’s sizes 10-24.
While Altar’d State’s core business is fashion retailing, the core mission is to do good by supporting both local communities and global charities with donations and volunteer work. Altar’d State said of its vision, “the company seeks to inspire through action, and supports a mission of standing out for good in the world. From day one, Altar’d State has pioneered connecting retail with goodwill.”
Specifically, every season, the company chooses a different charitable cause, and each individual boutique then finds its own local non-profit working in that field. The stores then donate 10% of net proceeds each Monday (called “Mission Mondays”) to those local charities. On an annual basis, the company is committed to donating at least 1% of all sales. Causes to which Altar’d State has made donations in the past include feeding and housing the homeless, assisting veterans, and providing services to those undergoing treatment for cancer and other illnesses. This Fall, all Mission Monday donations will be going toward local organizations aiming to enrich the lives and wellbeing of children across the country. Beyond these donations, the company additionally funds community service hours for its employees, and has a strong partnership with Coprodeli USA and its work in impoverished areas of Peru.
Beyond its product assortment and mission to make the world a better place, Altar’d State is further differentiated from the competition by its growth. The company has focused on opening brick and mortar retail store locations, adding anywhere from 10 to 20 boutiques each year – a strategy that is unique in today’s retail environment. It is Altar’d State’s commitment to its involvement in the community and its focus on face-to-face interaction with customers that keeps it excited about physical retail, and likely plays a role in its success. Each of the company’s boutiques is built like a custom home. The inviting atmosphere and warm greetings from associates aim to make all customers feel welcome.
As a growing, privately-owned retailer in the U.S., Altar’d State’s sought-after products, mission-driven purpose and strong brand following make it an intriguing member of the next generation of fashion retail. We are excited to follow its future growth and success, and to welcome it on stage on September 25th at the Consensus Great Brands Show.
Headlines of the Week
Cheesecake Factory to acquire Fox Restaurants in $353M deal
The Cheesecake Factory Inc. has agreed to acquire longtime incubator Fox Restaurant Concepts in a deal valued at $353 million, the company said Wednesday. The Calabasas Hills, Calif.-based casual-dining company said it would buy the remaining interest in North Italia from Phoenix, Ariz-based Fox as well. The company invested $88 million in the North Italia and Flower Child concepts over the last three years in anticipation of their purchase. The transactions will be completed for $308 million in cash at closing. An additional $45 million will be due over the next four years. The FRC transaction also includes an earn-out provision based on the financial performance of the FRC brands outside of North Italia and Flower Child.
Direct-to-consumer lingerie brand Lively acquired for $85M
Lively, a lingerie business founded and led by former Victoria’s Secret executive Michelle Cordeiro Grant, has sold to intimate apparel brand Wacoal for $85 million. The deal includes up to an additional $55 million in performance-based payouts. Lively, headquartered in New York, had raised $15 million in venture capital funding, including a $6.5 million Series A investment from GGV Capital, NF Ventures and former Nautica CEO Harvey Sanders announced late last year. The Series A valued the startup at $101 million, according to PitchBook. The deal brings Wacoal’s parent company, Wacoal International Corporation, a team of highly skilled e-commerce marketers who’ve successfully managed to tap into the millennial customer sect. Lively, founded in 2016, sells bras and intimates online and in two brick-and-mortar locations in Chicago and New York.
Apparel & Footwear
Billion-dollar baby: How Carter’s became a staple of just about every child’s wardrobe
More than 1,700 children’s stores have closed in the past year, including some of the biggest names in the business. Babies R Us is gone, as are Gymboree and Crazy 8 stores. The Children’s Place is in the process of shutting 300 stores. And then there is Carter’s. The brand has built a multibillion-dollar empire on $5 bodysuits and $8 pajamas, taking in nearly one-quarter of all baby clothes sales in the United States. Revenue has grown for 30 consecutive years, even as the nation’s birthrate has fallen to 30-year lows. And while competitors are filing for bankruptcy, Carter’s is opening stores and expanding into new markets.
Inside Nuuly, Urban Outfitters’ attempt to take on the rental clothing market
Urban Outfitters, Inc. is making a big bet on the online rental apparel industry — and is building the apparatus itself. Nuuly, which launched last week, is the retail group’s answer to rental services like Rent the Runway. Sitting alongside Urban Outfitters, Inc.’s retail brands — its namesake brand Urban Outfitters, Anthropologie and its subsidiaries Bhldn and Terrain, and Free People — Nuuly is a rental platform carrying more than 1,000 items from more than 100 different brands. In addition the group’s own brands, participating retailers include Levi’s, AYR and Gal Meets Glam. For $88 a month, subscribers can rent six items at a time per month. The company is led by president David Hayne, who is also chief digital officer at Urban Outfitters, Inc. and has worked with the company since 2001, most recently as Free People’s COO.
Retailers stem returns with new rules and oversized tags
How can retailers prevent someone from buying an expensive piece of apparel or jewelry, wearing it for a special occasion, then returning it for a full refund? Or stop people who purchase big ticket items like televisions just before the Super Bowl, for example, and then return them after the event? Despite fears of offending shoppers with strict return policies, retailers have begun combatting both types of fraud using low-tech solutions like one-time-use tags that stop people from returning expensive items if removed and high-tech computer algorithms that identify serial returners. In documenting the problems and the growth of these types of fraudulent returns, the National Retail Federation’s 2018 Organized Retail Crime survey estimated that return fraud and abuse amounted to $24 billion in 2017.
Athletic & Sporting Goods
Lew’s acquires European fishing company Fox
Fox International, Europe’s largest privately-owned fishing tackle company, announced that it has agreed to be acquired by Lew’s Holdings Corporation, a leader in the U.S. fishing equipment market, subject to regulatory approvals and customary closing conditions. This transaction represents a key step towards Lew’s goals of accelerating growth, further enhancing its product innovation and branded fishing equipment offerings and executing bolt-on acquisitions. Lew’s has grown into a leading fishing equipment and outdoor consumer brand along with the acquisitions of several iconic founder- and family-owned businesses, including Strike King and Hunters Specialties.
DICK’S Sporting Goods Launches “DSG” – A New Brand Created For Every Athlete
DICK’S Sporting Goods, the largest U.S.-based, full-line omni-channel sporting goods retailer, announced the launch of DSG, its newest athletic gear and apparel line that offers athletes an expanded assortment of styles and sizes for women, men and youth. Exclusively sold at DICK’S stores nationwide and on dicks.com, DSG is designed to make sports accessible for every athlete and every family. From the parent on-the-go, to kids playing soccer for the first time, this inclusive line provides apparel and equipment that’s stylish, versatile and affordable.
NBA Legend Kevin Garnett Acquires Iconic Hoop It Up Basketball Tour
Kevin Garnett, former NBA Most Valuable Player, 15 time All Star and NBA World Champion has acquired the iconic Hoop It Up basketball tour. Founded in 1989, Hoop It Up is the original basketball series that provides participants with a memorable experience by elevating the game with its focus on fundamentals, speed, style and substance of the 3-on-3 format. Garnett has formed Big Ticket Sports LLC, an experiential event management and production company based in Littleton, Colorado to own and operate Hoop It Up as well as Kick It 3v3 soccer tour. Both Hoop It Up and Kick It were acquired from Grand Sports Management LLC.
Puma To Shift Footwear And Apparel Production Out Of China
In a bid to protect itself from the U.S.-China trade war, German sportswear maker Puma will shift its footwear and apparel production out of China and possibly to Bangladesh, Cambodia or Vietnam. Puma Chief Executive Officer Bjorn Gulden said President Donald Trump’s threat of hiking tariffs as high as 25% on footwear was forcing manufacturers like Puma out of China. Gulden said this has forced Puma to lock in capacity at facilities in hubs like Vietnam earlier than usual. Currently, the company makes about one-third of its products in China.
Cosmetics & Pharmacy
Walgreens Buys Stake In Specialty Pharmacy Developer
Walgreens has announced it will acquire an equity stake in Shields Health Solutions along with the private equity firm WCAS (Welsh, Carson, Anderson & Stowe). Shields Health Solution is a prominent specialty pharmacy integrator and care provider that has partnered with over 30 health systems nationwide to create on site, specialty pharmacy programs that provide integrated care management for more than 30 specialty disease states, including diseases within the fields of oncology, neurology, and rheumatology. WCAS is a health care and technology-focused private equity firm. This agreement will enable Shields Health Solutions to expand its health care programs. The transaction is expected to close in Q3 2019 and is subject to customary regulatory reviews.
Rite Aid Launches Telehealth Connection To In-Store Clinics
Rite Aid is partnering with a telehealth company to offer a virtual connection for its customers to clinicians at its in-store retail clinics. The drugstore chain said it will leverage software from InTouch Health “to power the virtual health program to connect patients to clinicians via RediClinic Express kiosks located inside Rite Aid Stores.” It’s the latest move by Rite Aid and rival drugstore chains CVS Health, Walgreens Boots Alliance and Walmart to offer more healthcare services inside their stores and tie technology into making sure patients get better access to treatment in a timely fashion. Rite Aid said patients will be able to speak via a secure “two-way high-definition audio/video connection” to RediClinic clinicians. Rite Aid said the first RediClinic Express kiosks were launched in Drexel Hill and West Chester Pennsylvania and three more will be rolled out in Langhorne, Huntingdon Valley and Narberth, Pa. Rite Aid has more than 2,400 stores in 18 states, but most are concentrated in 7 states including California on the West Coast and Pennsylvania on the East Coast.
Douglas Snaps Up Majority in Niche Beauty
Douglas has acquired a majority stake in Niche Beauty. Niche Beauty, which launched in 2011, offers a curated collection of hard-to-find premium brands, many of which had previously only been available abroad. Its more than 6,000 products come from more than 200 brands. Douglas will take a 51% interest in the startup alongside its founding family—sisters Laetitia von Hessen and Sarah von Doetinchem and their father, Andreas Bechtolf—who will continue to run the company. The move will strengthen Douglas’ position in the luxury segment, while allowing Douglas to utilize its own platform to support Niche Beauty’s growth. “We are always on the lookout for promising investments that improve our portfolio and fit our #FORWARDBEAUTY strategy,” said Douglas CEO Tina Müller.
Discounters & Department Stores
Nordstrom family reportedly prepares proposal to increase stake in retailer
A group of Nordstrom family members that own 31.2% of Nordstrom have been working on a proposal to increase their stake in the department store to more than half, The Wall Street Journal reported on Thursday. The family last year aborted talks to take the retailer private after an initial offer of $50 a share was rejected as too low. Shares of the retailer have in recent weeks slipped nearly $20 below that offer. Year to date its shares are down nearly 30%. The company has been swept up in a wave of investor doubt that has also hit peers Macy’s, J.C. Penney and Kohl’s. Investors have questioned whether there is a continued need for department stores, as more shoppers head online or buy from brands directly.
Target Is Bringing Back 20 Designer Collections in Honor of 20 Years of Fashion Collabs
For the past 20 years, Target has shown customers you don’t need to spend a fortune in order to look fashionable. Thanks to then mass market retailer’s “Design for All” program, which works to launch capsule collections with high-end labels like Zac Posen, Lilly Pulitzer, Missoni, Rodarte and Jason Wu (just to name a few), customers can add aspirational designs to their closet at a fraction of the usual cost. As 2019 marks two decades of Target’s top-selling collaborations, the retail behemoth is set to release a 20th anniversary collection featuring nearly 300 limited edition items from all of the past designer collabs.
JCPenny’s top executive over stores and supply chain leaves abruptly as replacement hired
JCPenney has announced the hiring of a new chief stores and supply chain officer, Jim DePaul. DePaul most recently lead store, supply chain and ecommerce operations at Shopko, which declared bankruptcy in January and closed all stores in June 2019. His hiring coincides with the swift departure of JCPenney’s current stores and supply chain leader, Michael Robbins, who will leave the business effective August 3.
Emerging Consumer Companies
Wish raises $300 million
Wish, the San Francisco-based mobile shopping platform focused on “bargain” shoppers who are searching for a deal, has closed on $300 million in Series H funding led by General Atlantic. The latest round values Wish at $11.2 billion, which is up from $8.7 billion in late 2017. The company doubled in 2018 over 2017. The capital will fund marketing and working capital, with plans to expand its footprint in Europe and North America.
Refinery29 in talks to be acquired by Vice Media
Vice Media is in talks to buy women-focused, online publisher Refinery29. A deal that would unite two of the largest venture-backed media companies in the U.S. Refinery29, founded in 2005, has raised roughly $133 million. Vice, founded in 1994, has raised roughly $1.7 billion. The respective audiences seem to have little overlap.
Grocery & Restaurants
PepsiCo buys stake in Chinese natural food company
PepsiCo, Inc. is acquiring a major stake in Natural Food International Holding Ltd., a natural foods company based in Shenzhen, China, in a transaction valued at $131 million. Natural Food, through its subsidiaries, manufactures and sells grain, nut and berry food products with a focus on grain-based premium nutrition powder. It is China’s second largest natural food producer by retail sales and offers products under the Wugu Mofang brand. The company said PepsiCo struck a deal to purchase 25.85% of the business. PepsiCo also recently expanded into Africa with the acquisition of South Africa’s Pioneer Food Group for $1.7 billion.
Elite Restaurant Group acquires Gigi’s Cupcakes franchise out of bankruptcy
Los Angeles-based Elite Restaurant Group has added another brand to its growing portfolio. Elite has acquired assets of the 68-unit Gigi’s Cupcake chain out of bankruptcy. With the addition of the all-franchised Gigi’s brand, Elite’s restaurant portfolio will include close to 120 locations and gross sales of nearly $150 million.
Home & Road
Lowe’s lays off thousands of workers
Home improvement retailer Lowe’s has told thousands of workers that their jobs are being eliminated. The company plans to outsource jobs of maintenance and assembly workers to third-party companies. The assembly workers put together products such as wheelbarrows and grills. “We are moving to third-party assemblers and facility services to allow Lowe’s store associates to spend more time on the sales floor serving customers. Associates who were in these positions will be given transition pay and have the opportunity to apply for open roles at Lowe’s,” the company said in a statement to CNBC. The company said in a securities filing earlier this year that, as of Feb. 1, it had roughly 190,000 full-time employees and another 110,000 part-time workers. Lowe’s has added jobs outside of its traditional retail centers. The company announced in April that it is opening a new technology center in North Carolina and would hire up to 2,000 employees there.
Wayfair Inc. Steepens Net Loss in Q2 Despite Doubling Revenue
Wayfair Inc. got farther away from turning a profit in its second quarter even as revenues close to doubled. The online home furnishings retailer’s non-GAAP net loss of $181.9 million, or $1.35 per diluted share, was more than double last year’s $68.86 million, or $.77 per diluted share, net loss. On the plus side, direct retail net revenue, consisting of sales generated primarily through Wayfair’s sites, continued to climb – this time by 42.1% to $2.34 billion from $1.65 billion a year ago. During the company’s earnings call, CEO, co-founder and co-chairman Niraj Shah credited “a successful second annual Way Day” (Wayfair’s biggest sale event of the year) as well as ongoing operational improvements with fueling its revenue growth.
Jewelry & Luxury
Pre-Owned Jewelry Companies Mondiamo and Circa Merge
Pre-owned jewelry buyers Mondiamo and Circa announced a merger last Monday, joining forces to claim a bigger piece of the secondary luxury market. The financial terms of the deal were not disclosed. Each company will retain its name, a Mondiamo spokesperson confirmed to National Jeweler Tuesday. Mondiamo valued the global market for pre-owned luxury jewelry and watches at $8 billion per year, projecting annual growth of 6 to 9 percent in the next few years. The company said “sustained growth” in the market has been driven by consumers warming up to “recommerce” and the availability of digital platforms for buyers and sellers. Circa’s specialty is in-person transactions through 12 physical locations, including offices in New York, Los Angeles, Madrid and Hong Kong. Mondiamo, on the other hand, operates via a digital platform, offering customers cash for their jewelry sight-unseen and has an exclusive referral agreement with Blue Nile.
Travel Jewelry Brand Jet Set Candy Opens in NYC’s Grand Central
Where should a young brand that specializes in travel-themed jewelry (and general wanderlust) set up shop? In New York City’s Grand Central Terminal, of course. So went the wise thinking of Nicole Parker King, founder and chief executive officer of emerging fine and demi-fine jewelry brand Jet Set Candy. The brand opened its first-ever retail store within the bustling, increasingly high-end retail walkways of the iconic train station on July 25. It sits in a great spot—right next to upscale luggage store Tumi and across from bougie candle and perfume purveyor Diptyque. Jewelry—crafted in 14k gold vermeil, sterling silver, and solid 14k golds—ranges in price from $40 to $2,000. To celebrate the store’s debut, the brand launched the Passport Stamp collection, composed of charms modeled after the passport stamp designs of countries around the world.
Pandora Plans Brand Relaunch for Late August
Pandora will kick off its brand relaunch on Aug. 28 with an event in Los Angeles, the company announced Wednesday. Around 400 guests will attend to take a first look at the brand’s revamped store layout and aesthetic, which the company said focuses on “discovery and collectability.” Pandora will also unveil new products, including its autumn 2019 collection, during the event. The company said it plans to launch design collaborations with global franchises, and partner with celebrities, influencers and other organizations to market its jewelry. The rollout will take place over the second half of 2019 into next year, with the first rebranded store opening in the U.K. followed by stores in key markets, including China and Italy. A company spokesperson told National Jeweler Wednesday that dates have not yet been announced for the opening of new stores in the United States. Photos of the new stores and products are not yet available.
Office & Leisure
A.C. Moore names its next CEO
Crafts retailer A.C. Moore has promoted President and Chief Marketing and Merchandising Officer Anthony Piperno to the CEO position, the company said Wednesday. He will replace current CEO Pepe Piperno, Anthony Piperno’s father, who took over control of the retailer after his family purchased it in 2011, following years of supplying it through crafts wholesaler Sbar’s, which Piperno owns. Pepe Piperno will transition to chairman to “provide the company with industry expertise, guidance and strategic insight,” A.C. Moore said. Today A.C. Moore operates 142 stores and has 5,000 employees. It’s had a relationship with the Piperno family since the days it was expanding along the East Coast, where the retailer still has most of its stores.
Future of office supplies firm thrown into doubt
The future of Leicester-based Office Depot (UK) has been thrown into doubt, according to reports. The Telegraph says that credit insurer Euler Hermes has told suppliers over the last two weeks that it was no longer prepared to cover transactions with Office Depot Europe, owned by German investment firm Aurelius. Office Depot UK is based on Beaumont Leys Lane in Leicester. It has been selling office supplies since 1991. The firm’s latest results show it had revenues of £202m in 2017, making a loss of £9.6m. At the time the company employed 404 people.
InterContinental Hotel Group Is Getting Rid of All Single-Use Plastic Toiletries
The world’s largest hotel group, the InterContinental Hotel Group, has decided to completely phase out single-use plastic toiletries in all of its hotels. That would mean 200 million miniature plastics removed from circulation per year. Some IHG hotels are indeed very well known, from the Crowne Plaza to the InterContinental, Hotel Indigo, and Holiday Inn Express, and there are 843,000 rooms in total to choose from across the 5,600 hotels. The ban, announced on Tuesday, is meant to be entirely set and ready by 2021. It will involve removing all mini single-use plastic toiletries in every room and bathroom and replacing them with larger, reusable, bulk-sized bottles. Some of their hotel chains already set the example with bulk-size bottles, such as the top end Six Senses and Voco brands.
Technology & Internet
EBay accuses Amazon of a plan to take its sellers
EBay Inc. sued three employees working at ecommerce rival Amazon.com Inc., alleging that they conspired with dozens of other workers to fraudulently take high-value online merchants from eBay. Amazon managers, as part of a “racketeering scheme,” offered incentives for employees to illegally infiltrate eBay’s internal messaging system, create fake EBay accounts and recruit merchants who were using the company’s marketplace, according to the complaint filed Wednesday in U.S. District Court in San Jose, California. eBay is based in San Jose.
Amazon offers Prime members an alternative to Stitch Fix
Amazon.com Inc. is making a play for a larger share of apparel market with the launch of personal styling service it calls Personal Shopper by Prime Wardrobe. The Stitch Fix-like styling service is only available to U.S. members of Amazon’s Prime loyalty program and costs $4.99 for one styling per month. Personal Shopper by Prime Wardrobe is initially only available for women’s styles via the Amazon Shopping app for iOS or Android mobile phones. It plans to expand into men’s styles “soon.” To use the service, a shopper creates a style profile within the Amazon app, and then an algorithm and human stylist access her preferred style, fit and budget.
FTC investigates Facebook for antitrust violations
The U.S. Federal Trade Commission is investigating whether Facebook Inc. violated antitrust laws in a broad sphere of its business – social media, digital advertising and mobile applications. Facebook detailed the agency’s wide-ranging probe into the company’s business in a regulatory filing Thursday, a day after inking a $5 billion settlement over privacy violations. The commission has already contacted third parties that could aid in the investigation as it tries to understand competitive dynamics, said a person familiar with the investigation who asked not to be named because the inquiry is confidential.
Finance & Economy
Mortgage applications fall for third straight week, despite lower interest rates
Mortgage demand dropped to its lowest level since March, even though interest rates were much higher back then. Overall volume for mortgage applications fell 1.4% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was still 35% higher than a year ago, when interest rates were significantly higher. Homebuyers, or lack thereof, drove demand lower. Mortgage applications to purchase a home fell 3% for the week but were 6% higher than a year ago. The shift may be less about rates and more about what kind of homes are for sale and at what price. “Despite healthy demand, inadequate supply levels continue to hold back some would-be buyers,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
US weekly jobless claims rise moderately
The number of Americans filing applications for unemployment benefits increased last week, but the trend in claims remained consistent with tightening labor market conditions. Initial claims for state unemployment benefits rose 8,000 to a seasonally adjusted 215,000 for the week ended July 27, the Labor Department said on Thursday. Data for the prior week was revised to show 1,000 more applications received than previously reported. Economists polled by Reuters had forecast claims increasing to 214,000 in the latest week. The Labor Department said no claims were estimated last week. There are still no signs of a pickup in layoffs as a result of an ongoing trade war between the U.S. and China. The Federal Reserve on Wednesday cut interest rates for the first time since 2008, to insure against downside risks to the economy from the trade tensions and slowing global growth.
US consumer spending, prices rise moderately
U.S. consumer spending and prices rose moderately in June, pointing to slower economic growth and benign inflation. The Commerce Department said on Tuesday consumer spending, which accounts for more than two-thirds of U.S. economic activity, gained 0.3% as an increase in services and outlays on other goods offset a decline in purchases of motor vehicles. Data for May was revised up to show consumer spending rising 0.5% instead of the previously reported 0.4% advance. Economists polled by Reuters had forecast consumer spending climbing 0.3% last month. The data was included in last Friday’s second-quarter gross domestic product report, which showed consumer spending increased at a 4.3% annualized rate, accelerating from a tepid 1.1% pace in the January-March period. Robust consumer spending blunted some of the hit to GDP from weak exports, business investment and a slowdown in inventory accumulation.