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 Vince’s Q2 results to Deloitte’s holiday sales predictions, here’s our closeout for the week.
What you may have missed
Amazon moves into Lord & Taylor’s old building
Amazon this summer welcomed more than 2,000 employees to a new office space, inside the iconic Lord & Taylor building in New York City. The e-commerce giant purchased the building from WeWork in 2020.
After an “extensive restoration,” the building is now ready to house Amazon’s employees, and will also feature 35,000 square feet of retail space on the first floor. Amazon said it’s referring to the building internally as “Hank,” in reference to a unit of measure for yarn. That name “honors the building’s roots as a clothing department store,” according to the blog post.
“It’s been 3 ½ years since we first acquired the Lord & Taylor building, and we feel honored to be a part of the journey restoring and reimagining the next phase of life for this historic piece of the city,” John Schoettler, Amazon’s vice president of Global Real Estate and Facilities, said in a statement. “Adaptive reuse and converting older buildings is always complex — doing so with a designated landmark is a special undertaking.”
Belk celebrates 135 years with 150 new brands and a party on Saturday
Belk on Saturday is celebrating 135 years since founder William Henry Belk opened his first location in Charlotte, North Carolina, in 1888. The department store, owned by Sycamore Partners since 2015, now boasts nearly 300 locations in 16 Southeastern states. “Events will vary by location, but stores will celebrate all day while activities and sweets last,” the company said in a press release. “Several locations will also have special photo moments and DJs to add to the festivities.”
Also to mark the milestone, the company had aimed to add 135 national brands to its roster, but has eclipsed that with 150 so far. In addition to merchandise from longstanding partners like Polo Ralph Lauren and Estee Lauder, Belk is offering new brands in most departments. Stores themselves are also being refreshed with new signage and tests of amenities like valet parking, gift wrapping and concierge services.
Like other retailers run by private equity firms, however, Belk is straining in a tough economic environment with little financial cushion, Moody’s Investors Service warned earlier this year. The company took a one-day spin through bankruptcy in 2021.
Vince navigates a ‘challenging’ environment
Apparel brand Vince this week reported that second-quarter sales were $69.4 million, a 22.1% drop year over year. Income from operations was nearly $33 million, compared to a loss of $5.2 million in the year-ago period. Vince wholesale decreased 22% while direct-to-consumer sales decreased 3.7% year over year.
“As expected, we continued to navigate a challenging macro environment during the second quarter, which impacted both our direct to consumer and wholesale channels,” CEO Jack Schwefel said on a call with analysts regarding the quarter. “That said, we are pleased with the delivered sequential improvement in our direct-to-consumer channel compared to the first quarter, while our wholesale channel was more pressured due to the strategic decision to pull back the penetration of off-price and enhance our focus on the more profitable full-price business.”
This spring, Authentic Brands Group struck a deal to acquire Vince’s intellectual property.
The people want Build-A-Bear’s Pumpkin Kitty
What Build-A-Bear giveth, it also taketh away. The stuffed animal company on Sept. 5 issued a limited release of its 2008 pumpkin-themed cat toy as part of its Vault Collection.
The $35 adorable, orange cat is now sold out and fans are begging for a re-release, according to comments on the company’s Instagram. Customers were limited to ordering a maximum of four, but that still seems to have enabled resellers to jack up the price. Pumpkin Kitty can be found on eBay listings ranging from $155 to $210.
On Build-A-Bear’s latest Instagram post on Thursday which is not about the pumpkin cat, the comments section is flooded with feedback such as “where is the pumpkin kitty restock?” and “pumpkin kitty supremacy.”
Apple v. Pumpkin Spice: The battle for the superior fall flavor
As the holidays are approaching and the weather gets colder, fall flavors have returned to shelves marking the start of the season. Across many retailers and industries, companies are finding their own ways to participate in the seasonal trends past staple desserts and drinks.
Pumpkin spice as a trademark of the fall season can be found in just about anything from rapper Ice Spice’s newest collaboration drink with Dunkin’ to Dude Wipes pumpkin-spice scented flushable wipes. Apple-flavored items are coming at the forefront not only in dessert form, but with Grove Collaborative’s limited edition harvest apple detergent sheets and Kroger’s limited edition Harvest Apple Products of snacks and food.
What we’re still thinking about
That’s how late Walmart Express Delivery customers can receive a same-day delivery if they place their order by 9:30 p.m. the retailer said this week. Walmart previously offered Express Delivery until 8 p.m.
Walmart said the expanded delivery hours are in response to increasing customer expectations on speed and convenience. The retailer’s e-commerce sales continue to surge, rising 24% in the second quarter, while e-commerce at Sam’s Club rose 18%, led by curbside. Walmart online pickup and delivery is available at over 4,000 stores nationwide.
That’s the lower end of holiday sales growth projections Deloitte is predicting this year. The firm said holiday sales could be between $1.54 trillion and $1.56 trillion, representing up to 4.6% year-over-year growth.
The growth is more modest compared to last year when holiday sales increased 7.6% year over year to $1.49 trillion.
Online sales specifically are projected to rise between 10.3% and 12.8% from last year, Deloitte said.
What we’re watching
Birkenstock IPO shows what it takes to go public
Footwear brand Birkenstock filed for an initial public offering on Tuesday, though the number of ordinary shares to be sold and the price range have not been determined.
The company’s filing with the U.S. Securities and Exchange Commission revealed that it generated 1.24 billion euros in revenue during fiscal 2022 (about $1.33 billion) and made a net profit of 187.1 million euros.
The bottom line has never been so important for brands as a shift away from growth-at-all-costs takes over the industry and market volatility upends consumer behavior. Accessories brand Claire’s postponed its IPO plans in July “in light of public equity market conditions” just a few months after Mattress Firm decided to postpone its own public plans “in light of the ongoing volatility.”
Among the few consumer brands that have gone public this year is Oddity – the consumer tech company that owns makeup brand Il Makiage and skin care brand SpoiledChild. Oddity’s SEC filing showed that it brought in a net income for the years ended December 31, 2020, 2021 and 2022. In 2022 the company generated $21.7 million in net income.