It’s been another week with far more retail news than there is time in the day. Below, we break down some things you may have missed during the week and what we’re still thinking about.
From Shein’s inaugural design summit to the impact of Silicon Valley Bank’s fallout on the retail industry, here’s our closeout for the week.
What you may have missed
Neiman Marcus partners with Ferragamo an exclusive products, in-store activations
Neiman Marcus announced this week a partnership with Ferragamo for in-store activations, customer experiences and exclusive products. Seven Neiman Marcus stores will host shoppable installations. Neiman Marcus will be home to six exclusive men’s and women’s looks from the Spring/Summer 2023 collection and a selection of wholesale exclusive handbags.
Neiman Marcus and Ferragamo have been working together for over five decades.
"Our founder, Salvatore Ferragamo won the Neiman Marcus Award in 1947, followed by his daughter Fiamma Ferragamo in 1967,” Daniella Vitale, Ferragamo’s CEO of Americas, said in a statement. “They have long held a unique position in luxury with a loyal client and excellent customer service. With deep roots between us, we are thrilled to partner with Neiman Marcus in a way that brings Ferragamo into the future and is reflective of the brand's new modern look under the creative direction of Maximilian Davis."
With margins under pressure, J. Crew’s outlook turns negative
Citing a highly promotional environment, a decline in free cash flow and tapering of consumers’ late-pandemic enthusiasm for buying apparel, S&P Global Rating analysts this week downgraded J. Crew parent Chinos Intermediate’s outlook to negative.
“Chinos faced increasing competition through the third quarter of 2022,” Frederico Carvalho and Diya Iyer wrote in emailed comments, noting that operating margins declined due to heightened promotions. “We expect these headwinds to persist because of challenging macroeconomic conditions, including a shallow recession expected in 2023.”
Several apparel retailers and department stores are facing similar pressures, with many recently reporting the need for markdowns to get through inventory. But Chinos’ credit profile is weaker than many of its peers in part due to its “short track record since emerging from bankruptcy.” The company exited chapter 11 in August 2020, at the height of the pandemic.
Shein X plans design summit in Los Angeles
Shein X, the designer incubator program by fast-fashion retailer Shein, announced a day-long design summit. On April 1, registered creators will get to network with industry professionals, watch a fashion showcase and attend sessions at the City Market Social House in Los Angeles. Collections from current Shein X designers will be featured at the fashion showcase and the designers will share their experiences with the program. Designer LaQuan Smith is set to be the keynote speaker and guests Laura Kim, Maeve Reilly and Gary Wassner will join him on a panel.
"The SHEIN X program is an amazing opportunity for designers at all levels of their careers," Smith said in a press release. "I'm thrilled to partner with SHEIN for the first-ever SHEIN X Design Summit, where I'll share my own story and advice, and hopefully provide some inspiration for aspiring designers."
Peeps is back, and so is marshmallow-flavored everything
As many shoppers prepare to celebrate Easter, Peeps is planning its annual return with a slew of partnership deals.
The candy maker is taking full advantage of the only time of year where it is acceptable to eat Peeps by bringing its sugar-coated marshmallow birds to all sorts of places they don’t belong. For those looking to drink their sugar, one of the most notable brand crossovers is a Peeps-flavored Pepsi, which the brand claims is “back by popular demand” and will be available at retail this year.
But even healthy beverages are getting a marshmallow makeover: The Vitamin Shoppe will offer a Peeps-flavored whey protein for anyone looking to test the boundaries of justifiable workout drinks.
For those who aren’t looking for more artificial sweetener in their lives, Peeps-influenced products can also be found through a Katy Perry Collections footwear offering, a selection of Sally Hansen nail colors, and a series of plush toys at Build-A-Bear.
What we’re still thinking about
That’s how many stores Five Below wants to expand its Five Beyond concept to this year. The retailer, which caters to teens and tweens, said in an earnings call this week that it converted 250 of its more than 1,300 stores to the new Five Beyond store-in-store format last year.
CEO Joel Anderson told investors that customers spend over twice as much when buying a Five Beyond item priced at $6 or higher. On its website, the company’s Beyond offerings range up to $25 and offer things like a glitter lava lamp, game console controllers, and a 15-inch light-up Bluetooth speaker. Anderson said consumers' reception to Five Beyond's rollout remains strong.
That’s how many employees will be affected by a recent round of layoffs at Peloton subsidiary Precor Manufacturing.
The manufacturing company, which Peloton acquired for $420 million in 2020, began layoffs following the closure of a facility in Whitsett, North Carolina, according to a Worker Adjustment and Retraining Notification from March 9. Peloton CEO Barry McCarthy said on an earnings call in February that it was considering a potential sale of the company.
What we’re watching
Silicon Valley Bank collapse scares retailers and the entire banking industry
When SVB was taken over by federal regulators last week, companies began to worry about how they’d access their funds held in the bank – some of which exceeded the $250,000 insured limit.
A few brands, such as Omsom, Camp and Slumberkins, took to social media to explain to customers how impactful the news was for the business. They even offered discount codes for their direct-to-consumer websites to incentivize customers to support them. Marketplaces such as Faire and Etsy warned sellers of the potential for delayed deposits as well.
Thankfully for many brands, the government announced just a few days later that depositors would be covered in full and should have access to funds shortly.
But the concern doesn’t necessarily stop there. While depositors at SVB might be safe, viral bank runs are now a concern for the sector and Signature Bank also collapsed over the weekend. Before Credit Suisse announced it would borrow $54 billion on Thursday, liquidity concerns at the company sent share prices tumbling amid a possible global banking crisis.
Although Treasury Secretary Janet Yellen has expressed confidence in the banking industry, fears that First Republic Bank could be the next to collapse pushed it to enter a $30 billion agreement with other big banks Thursday.