🛍️The age of flash fads

Mini tote bags have emerged

March 15, 2024

Hello from the team at Retailist! As we approach the weekend, the landscape of e-commerce, retail, and Direct-to-Consumer (DTC) markets is changing rapidly. This past week, we've seen numerous updates, emerging trends, and new developments within the retail industry. Let's dive into the leading stories together.


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In the news: Top headlines this week

The age of flash fads. Trader Joe's mini tote bags have emerged as the latest unexpected trend, becoming highly sought after despite being a simple, mundane item. Released as a limited-edition set, these canvas bags mimic the design of the store's standard-sized totes but in a smaller form and are sold for $3 in various colors. The craze for these bags has escalated on social media, with people eagerly trying to acquire them, and has even led to a resale market where the bags are listed for exorbitant prices on platforms like eBay, highlighting the peculiar dynamics of consumer trend cycles and the inflated value of seemingly ordinary items. [Business Insider]

Under Armour puts founder Kevin Plank back in charge as CEO Stephanie Linnartz exits. Under Armour's CEO, Linnartz, who took over in 2023 following Patrik Frisk's departure, is stepping down after just 13 months. The company's founder will reassume the leadership role on April 1. During her short tenure, Linnartz made significant executive team changes, focusing on consumer strategy, product, design, supply chain, and regional management improvements, and launched the UA Rewards loyalty program. Despite these efforts, her departure marks another leadership change for Under Armour as it pivots towards athleisure. [Retail Dive]

Home Depot will open four distribution centers as it looks to home pros to drive sales growth. Home Depot announced plans to open four new distribution centers in Detroit, Los Angeles, San Antonio, and Toronto as part of its ongoing strategy to increase sales to remodelers, contractors, and other home professionals. These centers, which are expected to open in the first half of the year, are designed to accommodate the unique needs of professional customers, including the storage and direct job site delivery of bulky items like lumber and insulation. Averaging 500,000 square feet each, these facilities are significantly larger than the average Home Depot store and are an extension of the company's effort, which began with the opening of a similar hub in Dallas in 2020, to cater to the demands of professionals undertaking major projects.[CNBC]

Dollar General Store Staff Stage Walkout. The entire staff of a Dollar General store in Mineral Point, Wisconsin, walked off their jobs simultaneously for three hours on Saturday, March 9, protesting being "overworked" and "underpaid." They communicated their grievances through signs on the store's doors and windows, citing a lack of appreciation, excessive workload, inadequate compensation, and the company's "greed" as reasons for their collective action. The signs also expressed gratitude to their customers, indicating a strong bond despite their decision to quit. [Retail Wire]

Ikea plans more US price cuts as transportation, materials costs ease. Ikea plans to further reduce prices in the U.S. as part of its ongoing response to decreasing inflationary pressures, following recent price cuts on hundreds of products. The company has committed to continuing this trend in the coming months, highlighting these reductions in the "new lower price" section of its website. This strategy is not limited to the U.S. but is part of a global initiative, with Ikea implementing price cuts in various countries throughout 2024, driven by the reduced costs of transportation and raw materials. [Fox Business]

The Body Shop’s US operation forced into liquidation as UK parent takes its cash. The Body Shop's U.S. subsidiary was forced into Chapter 7 bankruptcy after its British parent company filed for administration in the U.K. without providing any prior notice. This left the U.S. operation in a vulnerable position, especially since the U.K. parent had been managing a centralized cash system, effectively controlling and withholding the U.S. subsidiary's cash flow needed for paying vendors and other financial obligations. [Retail Dive]

Adidas posts first loss in 30 years and warns on US. Adidas reported its first annual loss in over three decades and anticipates a further decline in sales in North America, attributing the downturn to high inventory levels among U.S. sportswear retailers. This financial setback comes after Adidas severed ties with Kanye West and halted sales of the lucrative Yeezy sneaker line in October 2022. Under the leadership of CEO Bjorn Gulden, Adidas has initiated sales of the remaining Yeezy stock, focused on promoting other key products like Samba and Gazelle shoes, and worked on enhancing retailer relationships, leading to a recovery in its share performance relative to competitors like Nike and Puma. [Reuters]

Petco CEO Ron Coughlin is out, former Best Buy exec to step in as interim chief executive. Petco's CEO, Ron Coughlin, is stepping down and will be replaced on an interim basis by R. Michael Mohan, a Petco board member and former executive at Best Buy, as the company begins its search for a permanent CEO. Coughlin, who will remain as an advisor to support the transition, expressed pride in his accomplishments over his five-year tenure, highlighting significant growth and the development of a business model focused on delivering the best for pets. Mohan, with his experience as Best Buy's former COO and president and his role on Petco's board since March 2021, takes over the interim CEO role with immediate effect. [CNBC]

Kohl’s Expands With Babies”R”Us In-Store Shops. Kohl's is diversifying its retail approach by partnering with WHP Global to launch Babies”R”Us shops within its stores, starting with approximately 200 locations in fall 2024. This strategy aims to attract new and younger customers by offering an extensive range of baby products, both in physical stores and online. Despite facing a challenging sales environment and providing weak full-year guidance, as evidenced by its mixed fourth-quarter results, Kohl's is looking to revitalize its business and customer base through this collaboration, even as it reports a slight revenue decline and a drop in same-store sales. [Retail Wire]

Claire’s to launch displays in thousands of Walgreens stores. Claire's is expanding its presence in the retail sector by partnering with major retailers such as Walgreens, Macy’s, Kohl’s, and Walmart, aiming to diversify its distribution channels amid a challenging retail environment. Alongside growing its physical footprint through shop-in-shop agreements, Claire's has shifted its strategy towards engaging younger customers, pausing its IPO plans, and rebranding its piercing service with a new digital character, logo, and brand voice to rejuvenate its appeal. [Retail Dive]

Family Dollar and Dollar Tree Are Closing 1,000 Stores. Family Dollar plans to close nearly 1,000 stores, responding to years of mismanagement, poor store conditions, and a significant fine for a rat infestation at one of its warehouses. These closures, part of a broader strategy to address challenges such as high inflation and reduced government benefits impacting its primarily low-income customer base, aim to improve profitability amidst difficult retail conditions. Despite the intention to streamline operations, these closures by Family Dollar and Dollar Tree (which will close 30 stores) have led to a substantial drop in stock value, reflecting investor concerns over the effectiveness of these measures in areas already underserved by retail options.  [Retail Wire]

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