Shein opens up about forced labor

Can Shein overcome these hurdles?

Welcome to the Retailist Roundup - As summer winds down, the transition to fall brings with it a surge in back-to-school trends, Pumpkin Spice craze and an uptick in business news. Here, we provide you with the latest updates in ecommerce, retail, and DTC brands, curated directly by our editors.

We've distilled the past week to present the most significant headlines, emerging trends, and insights from global retail experts. Here's a look at the standout topics this week:

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In the News: This week’s top headlines

How convenience chain Minuteman is optimizing self checkout. Minuteman Food Mart, a convenience store company based in North Carolina, implemented a design update at its high-volume store after a previous retrofit failed. The new store, which opened in July in Lumberton, North Carolina, features a design with self-checkout machines alongside staffed registers, aimed at improving front-end operations. The company conducted research and networking to refine the design, reflecting their commitment to learning, adapting, and implementing changes intentionally. [Payments Dive] 

Shein, the fast fashion darling mulling a U.S. IPO, opens up about forced labor. Shein, a digitally native retailer valued at $66 billion, is attempting to go public in the U.S. to cap off its rapid growth. However, it faces challenges due to its ties to China and allegations of forced labor in its supply chain, labor law violations, environmental harm, and design theft. The House Select Committee on the Chinese Communist Party has been investigating Shein since May, focusing on concerns about Uyghur forced labor in its supply chain, which may have gone undetected due to a tariff law loophole known as de minimis, allowing packages valued under $800 to bypass import duties and customs oversight. Despite the company's efforts to address these issues, it remains to be seen whether Shein can successfully overcome these hurdles and achieve a successful U.S. market debut. [CNBC]

Elon Musk blasts the work-from-home crowd. During Tesla's third-quarter financial-results call, Elon Musk criticized remote work, describing those advocating for it as "detached from reality." He compared remote workers to those who work in essential roles like factories, restaurants, and delivery services, emphasizing the importance of cost in Tesla's operations. Musk's comments on remote work represented a shift from a prior discussion about the affordability of Tesla's cars. [Insider]

Payments funding slips further. In the third quarter, investments in payments startups decreased, but U.S. companies received the highest amount of funding, as per a report from CB Insights. This suggests that while overall investments in the payments sector decreased, the United States remained a strong focal point for financial technology funding. [Payments Dive]

Amazon to launch drone deliveries in Italy and UK in late 2024. Amazon has announced plans to expand its drone delivery program, Prime Air, to the UK, Italy, and another location in the United States, with drone deliveries set to commence in late 2024. These drone deliveries will be integrated into Amazon's existing fulfillment network and will operate from same-day delivery sites, following successful launches in two cities in California and Texas in the previous year. Amazon has been working on implementing drone-based deliveries and received federal approval in 2020 to begin testing commercial deliveries in the United States. [Reuters]

Rite Aid gets court OK for nearly $3.5B in bankruptcy financing. Rite Aid, the pharmacy retailer, is filing for Chapter 11 bankruptcy and plans to sell approximately 100 store leases, properties, and land in 12 states as part of its restructuring efforts. The company cites unprofitable stores as a burden on its business, leading to an annual cost of $80 million in "dead rent" due to its inability to exit underlying leases outside of Chapter 11. Rite Aid will also assess its property footprint and close additional stores as it continues the restructuring process, and it recently settled a lawsuit with its largest prescription drug supplier, McKesson, who threatened to end their supply agreement. [Retail Dive]

American Airlines posts $545 million loss on higher labor costs in a time of big profits for rivals. American Airlines reported a $545 million loss for the third quarter, which it attributed to charges related to a new labor contract with its pilots. In contrast, United Airlines and Delta Air Lines reached similar deals with their pilots and earned $1.1 billion each in the same quarter. Rising labor costs and flat revenue compared to rivals contributed to American's challenging financial results, raising concerns over increasing costs for the airline industry as fuel prices surge while travel demand slows. [Yahoo Finance]

Walmart beefs up its third-party marketplace. Walmart is focusing on recruiting and retaining independent sellers for its third-party marketplace, offering incentives such as waiving extra fees for storing merchandise during the peak season. The company aims to attract these sellers to pack, ship, and advertise their products on Walmart's platform, leveraging the current retail landscape with more high-income shoppers turning to Walmart due to inflation. Walmart recently used its third-party marketplace to kick off the holiday season, with over half the items in its sales event coming from third-party sellers, positioning itself as a viable alternative to Amazon, which has faced criticism for its seller practices and is currently facing an antitrust lawsuit from the Federal Trade Commission. [CNBC]

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