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- 🏬Wayfair to open its first large store
🏬Wayfair to open its first large store
Physical locations make a comeback
Greetings, Retailist family! 🌟 As the weekend approaches, excitement is building in the e-commerce, retail, and Direct-to-Consumer (DTC) industries. This past week has been packed with news, emerging trends, and innovations in our beloved sector. With so much information at our fingertips, are you prepared to dive into the most intriguing stories that have surfaced? Let’s explore these developments and discover what they mean for us!
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In the news: Top headlines this week
Macy’s and J.C. Penney have two very different real estate strategies. Macy’s and J.C. Penney, two major U.S. department stores, are implementing contrasting strategies for managing their physical locations amidst challenges in the department store sector. While both companies are investing in store improvements and supply chain efficiencies, their approaches differ significantly in terms of real estate. J.C. Penney is focusing on revitalizing its stores, including a $1 billion investment for refurbishments and tech enhancements, planning to revamp 200 stores by year's end. In contrast, Macy's, under new CEO Tony Spring, is leveraging experience from Bloomingdale’s to transform its operations, including a selective downsizing plan that involves retaining profitable stores, hinting at a more conservative real estate strategy compared to J.C. Penney's expansive approach. [Retail Dive]
Walmart lifts full-year sales and profit forecast, shares hit record high. Walmart has raised its full-year sales and profit forecasts following better-than-expected first-quarter results, driven by optimistic expectations that easing inflation will boost sales across groceries and non-essential items such as clothing and electronics. This announcement led to a 7.3% rise in Walmart's stock price to a record high of $64.22, pushing its valuation above its 10-year average. The retailer reported a 3.9% increase in U.S. comparable sales, excluding fuel, for the quarter ending April 30, surpassing analyst expectations of a 3.15% increase. This performance, which included gains in both the number of transactions and items per cart, has alleviated some concerns about declining consumer spending in the U.S. [Reuters]
Under Armour is laying off workers as retailer says North America sales will plunge this year. Under Armour has announced a significant restructuring plan in response to a sharp decline in its North America sales, which fell by 10% this year, with expectations of further declines. The company also reported a dramatic drop in profits, with a more than 96% decrease during its fiscal fourth quarter compared to the previous year. Specific details on the number of layoffs were not disclosed, but the restructuring is expected to incur costs between $70 million to $90 million, including funds allocated for employee severance and benefits. Despite an initial drop in share prices following the earnings report, Under Armour's stock experienced a rebound, rising over 2% in morning trading after the earnings call with analysts. [CNBC]
Kraft Heinz exploring sale of Oscar Mayer business. Kraft Heinz is reportedly considering selling its Oscar Mayer meats division, which could potentially bring in between $3 billion to $5 billion, according to the Wall Street Journal. This decision comes as the Oscar Mayer brand, known for products like hot dogs, bacon, ham, and bologna, faces declining consumer demand amid a broader shift towards healthier food options. Additionally, the company had to write down the value of the Oscar Mayer and Kraft brands back in 2019, indicating ongoing challenges within these segments. [Reuters]
Samsung Responds to Apple’s Heavily Criticized ‘Crush’ Ad With a 43-Second Clip. Samsung has launched a new advertisement for its Galaxy Tab S9 titled "Creativity cannot be crushed," directly responding to Apple's controversial "Crush" ad for the iPad Pro. Apple's original advertisement depicted creative tools like paint and musical instruments being crushed by a hydraulic press, aiming to highlight the new iPad Pro's thin yet powerful design. However, the ad was widely criticized for seemingly suggesting technology could replace creative roles, leading to a negative reaction online. Apple ultimately apologized for the misstep and removed the ad from television, acknowledging that it did not achieve its intended purpose of celebrating and empowering creatives. Samsung's ad appears to capitalize on this controversy by affirming the importance of creativity. [Retail Wire]
7-Eleven testing financial services in stores. 7-Eleven is expanding its service offerings by testing financial services at 3,000 of its Speedway locations, in partnership with ATM solution provider FCTI. This initiative includes options like cryptocurrency purchases and is aimed at transforming these convenience stores into more comprehensive service destinations. The test results will determine which services will be broadly implemented. Building on a partnership that started in 2015, this move will increase the total number of 7-Eleven locations equipped with FCTI ATMs to 11,600 by the end of 2025. Additionally, this development follows a January announcement where 7-Eleven revealed plans to implement its proprietary store and fuel point-of-sale system at Speedway locations. [Payments Dive]
Currys transforms 65 stores to ‘enhance customer experience’. Currys, a leading electrical retailer in the UK and Ireland, is enhancing the shopping experience by revamping 65 of its stores. This significant transformation involves redesigning 90% of the existing space in each selected store to improve navigation and display a broader array of the latest technology. The initial changes are being implemented in the Aberdeen Garthdee, Bristol Winterstoke, and Grantham stores, with the full rollout expected to continue through 2025. These revamped stores will feature expanded product ranges in categories like TV and computing, more efficient mobile areas, and improved back-of-house facilities to support staff. Additionally, the refurbishment efforts are supported by Currys' Asset Reclaim Centre (ARC), which reuses recovered fixtures and fittings, emphasizing sustainability in the retailer's upgrade strategy. [Retail Gazette]
Diamond Industry Shakeup: Anglo Divorces De Beers. The diamond industry is experiencing a significant transformation as Anglo American Plc has announced its decision to separate from De Beers, its long-standing diamond business. This move ends nearly a century of partnership and introduces new uncertainties into the diamond supply chain. The industry, already struggling with falling diamond prices, geopolitical tensions, and the rise of lab-grown diamonds, now faces the challenge of navigating the impact of De Beers' restructuring under potential new ownership. This development could significantly alter the traditional dynamics of diamond sales. Additionally, after a temporary boost in sales during the COVID-19 pandemic, the diamond market is suffering from reduced consumer spending and an oversupply of diamonds, with the growing presence of synthetic diamonds in markets like the U.S. adding further pressure. [Retail Wire]
Home Depot sales drop more than expected as wary customers delay big projects. Home Depot reported a larger-than-anticipated decline in quarterly same-store sales, as consumers cut back on major home improvement projects amidst economic uncertainties. With higher borrowing costs and persistent inflation, shoppers are opting to spend less on costly renovations, concentrating instead on smaller maintenance and repair tasks. This trend has contributed to a challenging year for home improvement retailers, including Home Depot and its competitor Lowe's, reflecting broader shifts in consumer spending habits in 2023. [Reuters]
Buck Mason opens second Chicago store. Buck Mason, a Los Angeles-based direct-to-consumer (DTC) clothing brand, has expanded its retail presence with the opening of a second store in Chicago, increasing its total number of locations to 32. This new Southport store is significantly larger than their first Chicago location in Lincoln Park, which opened in March 2023. The expansion reflects the brand's continued interest in establishing brick-and-mortar stores in key markets, with co-founder Erik Allen Ford highlighting the unique appeal of the new Chicago location's aesthetic, featuring original hardwood floors and brick walls. Buck Mason's strategic expansion into various U.S. cities since its first store opening in 2015 on Abbot Kinney in Venice, Los Angeles, demonstrates its robust growth and the enduring appeal of physical retail spaces for DTC brands.[Retail Dive]
Amazon Beauty’s Summer Beauty Haul Returns. Amazon Beauty's Summer Beauty Haul event is back, running from May 13 to May 19, offering a week of enticing discounts and deals on a wide range of beauty products. This event, which starts today in the Amazon Beauty store, includes items from skincare, makeup, hair care, and personal grooming essentials, ensuring there's something for every beauty need. Beyond the promotional deals, the event also serves as a platform for shoppers to explore and discover new brands and products, making it ideal for finding everything from self-care items to birthday gifts. [Retail Wire]
Wayfair to open its first large store, as physical locations make a comeback. Wayfair, known for its online presence in the home goods market, is opening its first large physical store near Chicago, marking a significant shift towards brick-and-mortar retail. This move follows a trend among digitally native companies expanding into physical locations to facilitate growth. Despite its success as a $12 billion online retailer, Wayfair's CEO Niraj Shah acknowledges the limitations of digital shopping for products like furniture that are visual, tactile, and often require careful consideration due to their cost. The physical store aims to offer a more pleasurable and effective shopping experience, providing services like design assistance and financing discussions that complement their online offerings. [CNBC]
Converse to cut jobs as part of Nike's cost-savings plan. As part of a broader cost-savings initiative by parent company Nike, Converse is set to cut jobs. Nike's $2 billion cost-reduction strategy, announced in December, spans three years and includes measures such as reducing product supply and management layers. The decision comes in response to cautious consumer spending and challenges in the wholesale sector, which have impacted Nike's financial outlook, including a projected low single-digit percentage decline in revenue for the first half of fiscal 2025. This plan has already led to significant layoffs at Nike, including about 740 employees at its Oregon headquarters and a reduction of approximately 2% of its total workforce, affecting over 1,600 jobs. [Reuters]
Gap Inc. selects Omnicom as media agency of record, reorganizes key media functions. Gap Inc. has chosen Omnicom Media Group (OMG) as its new media agency of record (AOR), transitioning from its long-time partner PHD, also under Omnicom, which previously managed a $190 million account. This change is part of Gap's broader strategy to revitalize its brand portfolio, which includes Gap, Old Navy, and Banana Republic. The company has also created a Marketing Shared Services organization to centralize its core media functions. CEO Richard Dickson emphasized that working with OMG will enhance efficiency and help develop culturally relevant narratives that boost brand identity and consumer engagement, aligning with the need to connect with young, ad-resistant audiences. [Retail Dive]
GameStop Stocks Make a Comeback. GameStop's stock has made a dramatic resurgence, surging over 60% on Tuesday after a 74% increase the previous day, spurred by Keith Gill, also known as "Roaring Kitty," who shared a bullish stance on the company. This surge has reignited the meme stock phenomenon initially seen in 2021, during which GameStop became a symbol of retail traders challenging institutional investors. The stock had been relatively stable earlier in the year but saw a 60% rise over the past month, leading to an overall increase of about 180% excluding the latest gains. Similarly, AMC, another key player from the 2021 meme stock movement, also experienced a significant jump in its stock price, reflecting a continued interest and speculative trading in these stocks. [Retail Wire]
Job Board: This week’s Top Openings in DTC, RetailTech, and more
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