👀 Home goods retailer, Conn's closes at least 70 stores

July 26, 2024

🎉Hello, Retailist Roundup readers! As we bring another dynamic week to a close, the excitement in the retail and e-commerce sector is undeniable. This week has been brimming with pivotal updates, emerging trends, and groundbreaking innovations that are transforming our industry. Ready to dive into the top stories? Join us as we explore these developments and their wide-reaching impacts!

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In the news: Top headlines this week

Mattel will lean on retailers to boost holiday sales. Mattel is focusing on increasing its shelf space and leveraging retailer support to boost holiday sales despite a sales decline. CEO Kreiz emphasized significant gross margin expansion and growth in adjusted EBITDA, projecting a positive second half with new product innovations and increased marketing. Although the toy industry is under pressure and expected to decline modestly this year, adult collectibles are driving demand, aligning with Mattel's strategic focus. [Retail Dive]

Gucci-owner Kering forecasts 30% fall in H2 operating profit on sluggish China demand. Kering, the owner of Gucci, reported a larger-than-expected 11% drop in second-quarter sales to €4.5 billion, missing analyst expectations of a 9% decline. The French luxury group forecasts a 30% fall in operating profit for the second half of the year, following a 42% drop in the first half to €1.6 billion, due to sluggish demand from Chinese shoppers. Despite deteriorating trends in June and July, CFO Armelle Poulou expects a gradual improvement in revenue, particularly for Gucci, in the latter half of the year. [Reuters]

Retailers shift their thinking on costly last-mile delivery as consumer need for speed raises costs. Retailers are reevaluating the cost of last-mile delivery as consumer demand for speed, particularly same-day shipping, drives up transportation expenses. A survey by AlixPartners found that 76% of retail executives report increased delivery costs per package since last year, and 75% state that home delivery does not enhance profitability. With younger consumers driving the demand for rapid delivery, 85% of executives identified reducing the total cost per order as their top priority for managing last-mile delivery challenges. [CNBC]

Omni Retail Enterprises names CTO. Omni Retail Enterprises has appointed Jeff Haddox as its new Chief Technology Officer. Haddox, who has extensive experience with Pier 1 and was previously the Chief Digital Officer at RuffleButts, will oversee digital channels, infrastructure, project planning, and data analytics for Omni’s various brands. Omni's portfolio includes Pier 1, Dressbarn, Modell’s Sporting Goods, Stein Mart, and Linens ’N Things. [Retail Dive]

Shein to open pop-up store in South Africa to woo more shoppers. Shein, the fast-fashion retailer, will open a pop-up store in Johannesburg, South Africa, in August to boost its brand recognition in the country. Known for its affordable pricing, Shein is expanding its global presence alongside rival Temu, leveraging the surge in online shopping post-COVID-19. However, both companies have faced accusations of exploiting tax loopholes by shipping China-made products in small quantities to evade higher duties. [Reuters]

How retailers can drive more sales by meeting the financing needs of more customers. Retailers can boost sales by meeting the financing needs of more customers, especially in the current high-interest rate environment where primary financing approvals are harder to obtain. Rolando De Gracia, chief commercial officer of Concora Credit, noted that banks and primary lenders are tightening their underwriting criteria. As a result, retailers selling durable goods with primary-lending relationships will likely experience lower approval rates, highlighting the need for alternative financing options to close more sales.[Payments Dive]

What Google’s decision to keep cookies means for the internet. Google's decision to retain third-party cookies, reversing a previous plan to eliminate them, has significant implications for advertisers and the internet's future. Cookies are small code fragments sent to a user's browser by websites, tracking online activities and preferences to help advertisers target ads more effectively. Google's move means continued reliance on this tracking method, impacting how users interact with the web and sustaining current advertising strategies that depend on detailed user data. [CNBC]

Conn’s to close over 70 stores amid bankruptcy speculation. Conn's is closing over 70 stores, approximately 13% of its total, amid bankruptcy rumors and financial difficulties following the acquisition of W.S. Badcock. The company reported a significant year-over-year net loss of nearly $77 million in 2023 and faces compliance issues with Nasdaq. CreditRiskMonitor's FRISK score indicates an increased risk of bankruptcy, reflecting Conn's financial instability. [Retail Dive]

Best Buy Revamps Brand, Complete With a ‘Spokeshologram’. Best Buy is updating its branding with a new tagline, "imagine that," and an advertising “spokeshologram” as part of a broader initiative to enhance personalized customer experiences. The changes aim to engage tech-savvy consumers who conduct extensive research before purchasing. The tagline encourages customers to think about innovative possibilities, like a fridge that informs you of missing groceries. [Retail Wire]

Retail crime ‘queenpin’ faces five years in prison, millions in restitution. Michelle Mack, the ringleader of a nationwide organized retail crime operation targeting Ulta Beauty and other major retailers, faces over five years in a California state prison. Her sentence of five years and four months will be officially set in January, with her husband, Kenneth Mack, receiving the same sentence but already incarcerated. Kenneth will be released after one year, followed by probation and community service. Michelle's sentence will begin after her husband's release to allow her to care for their children, and she is prohibited from leaving the state or entering any Ulta or Sephora stores. [CNBC]

Birkenstock opens first owned store in France ahead of Olympics. Birkenstock has opened its first owned store in France, located in Paris's Marais district, as part of its retail expansion strategy ahead of the Olympics. The two-level store features design elements like gypsum walls, leather, and cork detailing, reflecting the brand's heritage. Nico Bouyakhf, Birkenstock Europe's president, emphasized that the store will enhance personal connections with consumers and is the first of several planned openings in key European cities. [Retail Dive]

FTC Makes Moves To Stop ‘Surveillance Pricing’. The Federal Trade Commission (FTC) is investigating "surveillance pricing," where companies use AI to charge different prices to different customers based on their data. This practice involves setting prices according to customer characteristics and behavior. The FTC is seeking information from eight companies, including Mastercard, JPMorgan Chase, and Accenture, to understand their use of AI and customer data in pricing strategies. [Retail Wire]

Estee Lauder names Akhil Shrivastava as CFO. Estee Lauder has named Akhil Shrivastava as its new CFO, succeeding Tracey Travis, who is retiring after 12 years. Shrivastava, who joined Estee Lauder in 2015 after 18 years at Procter & Gamble, will begin his new role on November 1. Travis will stay with the company until her retirement on June 30, 2025, to ensure a smooth transition. [Reuters]

TikTok Shop spend jumps during Deals for You Days. During TikTok Shop's Deals for You Days event in July, U.S. shoppers spent an average of $52 each, marking a historic high and reversing recent spending declines. The event featured discounts on products from brands like L’OrĂ©al Paris and Maybelline New York, contributing to the sales spike. Research also indicates significant customer overlap between TikTok Shop, Shein, and Temu, with a notable percentage of shoppers purchasing from multiple platforms. [Retail Dive]

List of Big Lots Store Closures Expands. Big Lots is expanding its list of store closures due to financial difficulties, including high inflation impacting consumer spending. Initially planning to close 35-40 stores, the retailer now lists about 135 store closures across more than two dozen states. With declining revenues and increased long-term debt reported in Q1 2024, there are concerns about Big Lots' ability to continue operating, and the company may be considering bankruptcy. These challenges are indicative of broader issues faced by retailers post-COVID-19. [Retail Wire]

Price hikes boost Lindt sales, says more to come. Lindt & SprĂŒngli reported a 7% increase in half-year organic sales, reaching 2.16 billion Swiss francs ($2.43 billion), surpassing analyst expectations of 2.1 billion francs. The sales boost was driven by mid-single-digit price hikes, compensating for historically high cocoa prices, while volume and mix growth remained flat. The Swiss chocolate maker indicated that more price increases are likely to come. [Reuters]

Krispy Kreme Sold Its Majority Ownership of Insomnia Cookies. Krispy Kreme has sold its majority ownership of Insomnia Cookies for $127.4 million, with an anticipated additional $45 million from refinancing intercompany debt. This sale reflects Insomnia Cookies' significant growth, now valued at $350 million, double its 2017 valuation. Insomnia Cookies, known for its late-night cookie delivery, has seen substantial global expansion over the nearly six-year partnership with Krispy Kreme, as highlighted by its founder Seth Berkowitz.  [Retail Wire]

Nike kicks off marketing comeback with gritty Olympics ads. Nike is launching a bold marketing campaign for the Paris Olympics, aiming to reclaim a sharper and more audacious brand image. The campaign, featuring actor Willem Dafoe's provocative voiceover, challenges the perception of negative qualities, like being irrational and maniacal, as key motivators for elite athletes. The ads showcase sports icons like LeBron James, Serena Williams, and Sha’Carri Richardson, highlighting their relentless drive and questioning if it makes them "bad" people. [Retail Dive]

Job Board: This week’s Top Openings in DTC, RetailTech, and more

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