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 Balenciaga's controversial distressed sneaker release to Tapestry's latest earnings report, here’s our closeout for the week.
What you may have missed
Eddie Bauer CEO exits
Damien Huang, CEO of Eddie Bauer, stepped down as of Friday, according to a press release emailed to Retail Dive. Huang has only been CEO for about a year (around the same time Eddie Bauer joined the Sparc portfolio), according to his LinkedIn profile, but he has a long history at the outdoors retailer. Before taking on the CEO post in 2021, Huang was president of Eddie Bauer from 2018 onward and held senior merchandising and design roles for 8 years before that. All in, Huang has been with Eddie Bauer for well over a decade, joining the retailer in 2010.
Sparc Group has begun a search for Huang’s replacement and in the meantime, the retailer’s daily operations will continue as usual.
“Working with the team at Eddie Bauer and crafting a vision for this brand’s second century has been a phenomenal experience,” Huang said in a statement. He added that the brand “is well-positioned to continue its momentum” under Sparc and Authentic Brands Group.
Earlier this month, Eddie Bauer named a new creative director in Christopher Bevans, who serves as senior creative lead at Shopify and was previously a design director for Nike’s Blue Ribbon Sports division. In 2018, Eddie Bauer’s private equity owner Golden Gate Capital combined Eddie Bauer and PacSun into one operating company after initially picking up the brand in bankruptcy in 2009. However, Eddie Bauer was acquired by Sparc and Authentic Brands Group in May last year, undoing the arrangement and putting Eddie Bauer in Sparc's portfolio, along with Brooks Brothers, Forever 21 and Lucky Brand, among others.
Target's progress update on Black-owned brands
Last year, Target announced a goal to spend over $2 billion with Black-owned companies by 2025. This week, the company provided an update on its progress. Since April 2021, Target has increased its investment in Black-owned brands, suppliers and other companies by more than 50% compared to 2020. In terms of assortment, the retailer has more than doubled the amount of Black-owned brands, with representation in “every major product category” and now offers more than 100 Black-owned brands, according to a company press release.
Target also plans to spend 5% of its annual marketing media budget with Black-owned companies by the end of 2022. So far, the company has invested four times more with Black-owned partners than in 2020 and has doubled its partners in the space. As part of that effort, Target on Tuesday introduced the Roundel Media Fund, which will award over $25 million in media to diverse-owned and -founded brands by the end of 2025.
“While there’s more to be done, our team has approached this critically important work with passion and conviction, and we are on track to meet the goals we established to advance racial equity through the full impact of our company,” Chief Growth Officer Christina Hennington said in a statement.
Tapestry CEO: Our Q3 results ‘significantly exceeded expectations’
Tapestry on Thursday reported third quarter net sales grew 13% year over year to $1.44 billion. By banner, Coach grew 11% to $1.1 billion, Kate Spade grew 19% to $301.5 million and Stuart Weitzman grew 11% to $63.6 million.
“Our third quarter results significantly exceeded expectations led by continued strong growth in North America,” Tapestry CEO Joanne Crevoiserat said in a statement. “Our performance reinforces the meaningful runway ahead across our portfolio. We are harnessing our unique blend of magic and logic – distinctive brands amplified by an agile and data-rich platform. These differentiators enable us to deliver the continuous innovation necessary to build lasting customer relationships in the context of a rapidly evolving landscape.”
The company’s operating income grew 45.2% to $169.5 million, while net income increased 33.8% to $122.7 million.
Best Buy to open new outlet stores
Best Buy announced on Wednesday that it will open four new outlet stores. This follows an earlier disclosure that the company would double the number of outlets it operates over the next year. New locations will open in Chicago, Houston, Phoenix and Manassas, Virginia. Outlets offer open-box and clearance items at a discounted price including laptops, tablets, mobile phones and gaming products.
Additionally, for the first time it is possible to shop outlet stores online. Customers can see available products, make a purchase and pick it up at their local outlet store. For the Chicago, Phoenix, Manassas and Houston locations, any Best Buy customer can have small items like laptops and tablets shipped directly to their home. Customers can also purchase any product from the Best Buy website and have it shipped to their local outlet location for pickup, and all outlets now have the option for same-day delivery.
The effort also delivers on the retailer’s objective of cutting back on electronic waste by giving tech a longer life cycle.
Balenciaga releases limited-edition distressed sneakers
If you’re bored of wearing shoes that are properly constructed and don’t come with any rips in them, you’ll be pleased with Balenciaga’s new fully distressed Paris sneakers. The luxury retailer unveiled its limited collection of distressed sneakers this week, which include heavily ripped, scuffed, and stain details. The price tag is a mere $1,850, which is actually about triple the price of its non-distressed high-top Paris sneakers.
The brand has become known for its unique and bizarre products, such as its five-toed Vibram shoe collaboration and its stiletto-heeled sneakers. The newest destroyed sneaker release received strong opinions on social media, with some critiquing the brand for profiting off of an aesthetic inspired by poverty.
Why is poverty now an aesthetic for rich people???? pic.twitter.com/jkZgKH22vu— X Æ A-XII (@MessiahMajid) May 10, 2022
It’s likely that getting that attention was exactly the point, as the company reportedly told a select group of media players who saw the campaign in advance that the distressed shoes “suggest that Paris sneaker are meant to be worn for a lifetime.” By doing this, the brand was likely looking to draw attention to the non-distressed Paris sneakers, which have a much smaller price tag of $625 for high-tops and $495 for mule sneakers.
Nonetheless, if you want the sneaker equivalent of ripped jeans, look no further than Balenciaga.
Goop continues to goop it up for a cause
Goop on Wednesday introduced a very peculiar product to its lineup. On Instagram the company announced the addition of The Diaper – a disposable diaper lined with virgin alpaca wool and fastened with amber gemstones. The item was described as being infused with the scents of jasmine and bergamot “for a revitalized baby” and had a hefty price tag of $120 for 12 diapers.
Response to the product was mixed. Some people in the comments of the post said that it was needed while others asked the astute question of “is this a SNL skit?”
Turns out the entire thing was a troll, to get people to pay attention to the fact that diapers are taxed in 33 states. In a follow up video post, Goop CEO Gwyneth Paltrow explained that diapers are not a luxury good, and that the fictional product was priced at $120 because that is what the diaper tax could cost families annually. The company pointed to Baby2Baby, an organization that helps provide diapers, formula and other essentials to families in need.
Pointing to a problematic diaper tax is good. But Goop is still Goop. The reason that people were confused by this item is that it actually seems like something the company would both create and promote. This is the business that gave us a candle that "smells like my vagina" and has given some questionable wellness advice and practices.
It was also a stunt carried out while the country is amid panic about a baby formula shortage that could leave parents in a lurch for months. Paltrow’s follow up post does contain language that addresses the formula shortage. The U.S. is also in the middle of a battle over reproductive rights. Let’s just say that things are tense.
What we're still thinking about
That’s how many pairs of counterfeit shoes of its own brand Nike says it purchased from StockX’s sneaker marketplace. Based on that, the shoe giant added claims of counterfeiting and false advertising to an ongoing lawsuit against StockX, filed earlier this year. Nike said in court papers the shoes came with a “100% Authentic” guarantee from the marketplace.
The original suit involves non-fungible tokens on StockX that Nike alleges infringed on its trademark rights. StockX has said that its Vault NFTs are “absolutely not” virtual products or digital sneakers, but rather claim “tickets” to physical goods, and are lawful.
StockX said in a statement to Retail Dive this week that Nike’s latest filing including the counterfeiting and false advertising claims was “baseless” and had no merit. The company also said the filing was curious given that Nike's "own brand protection team has communicated confidence in our authentication program, and that hundreds of Nike employees — including current senior executives — use StockX to buy and sell products.”
Anyone who has, not unreasonably, typed “shoes.com” into their web browser in the search for footwear has been rerouted to several different places on the internet over the years. In the past decade, no fewer than five different retailers have owned the valuable domain name.
Founded in 1999, the online retailer Shoes.com was acquired the next year by Brown Shoe Co., the owner of Famous Footwear and several wholesale brands, which today is known as Caleres. That company sold Shoes.com to what was then ShoeMe. Shoes.com went bankrupt a few years later. In bankruptcy, the domain was picked up by Walmart for $9 million, which merged the name and domain with the ShoeBuy business the retail giant picked up a few years earlier to add to its now defunct Jet unit.
In 2020, amid an e-commerce revamp, Walmart sold off Shoes.com to private equity firm CriticalPoint Capital. This spring, Designer Brands Inc. — owner of the footwear retailer DSW — acquired the shoes.com domain name and intellectual property from an undisclosed seller for an undisclosed amount. Type “shoes.com” into your browser today and you’ll find a link to DSW’s online store.
A spokesperson for DSW said in a statement that, “The high-traffic Shoes.com domain furthers Designer Brands’ long-range strategy to expand its footprint digitally and strategically position and distribute Designer Brands’ Owned Brands as well as shoes from top National Brand partners.”
What we’re watching
Target workers in Virginia, seeking better wages for longtime workers, move to unionize
The labor activism seen at Amazon, Starbucks and elsewhere across the country has reached Target.
Workers at a Target store in Christiansburg, Virginia, have filed a petition with the National Labor Relations Board in hopes of holding an election. The workers are affiliated with the New River Valley General Membership Branch of the Industrial Workers of the World, per the filing.
A Target spokesperson declined to comment on the union effort specifically, but said in an email to Retail Dive that the company wants “all team members to be better off for working at Target.”
“At Target, our team members are at the heart of our strategy and success, and we have a deep commitment to listening to our team and creating an environment of mutual trust where every team member’s voice matters,” the spokesperson said in the statement, touting the retailer’s starting pay, health benefits, tuition assistance, scheduling policy and opportunities for growth.
The workers’ move follows what the group Target Workers Unite said was a failed request last month to pay longtime employees more than the starting wage. Target Workers Unite is not itself a union, but “an independent initiative run by rank and file Target team members.”
Earlier this year, Target said it would increase its starting pay from $15 per hour to between $15 and $24. In the emailed statement, Target said that it raised the starting wage at the Christiansburg store last fall, and “increased wages for longer-tenured team members,” but declined to confirm what the wage is.
According to a screenshot of the store workers’ demand shared on Twitter by the pro-union media outlet More Perfect Union, the starting pay at that store is $16. Workers want $2 per hour above that for those who’ve been there for five years, and another $2 for those there for 10 years or more.
As of press time, a living wage for a single adult with no children in the Christiansburg area is about $17 per hour; for a single adult with one child it is about $32, and for two adults (both working) with two children it is about $23, according to the Massachusetts Institute of Technology living wage calculator. Target declined to elaborate on how it calculates its wage policy for a given store.
Editor's note: This story has been updated to clarify the ownership of Eddie Bauer.