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 Orville Redenbacher releasing a collection of quirky seasonings to eBay reporting second quarter earnings, here’s our closeout for the week.
What you may have missed
REI expands trips and tours business
As part of a longer-term strategy to grow its outdoor services business, REI is expanding its rentals, day tours and multiday trips. REI is adding more kayak, paddleboard, e-bike and bicycle tours and rentals in key cities, and the retailer said its paddling operations as a whole have doubled in location number.
The retailer’s longer trips, which can span from backpacking to cycling to snowshoeing, are also in growth mode. REI has added almost 30 multiday trip itineraries this year and introduced three trips to the Canadian Rockies.
"We are growing REI Experiences to enable everyone to connect with the best version of themselves through nature," Mark Seidl, divisional vice president of REI Experiences, said in a statement. "Whether someone joins us for an afternoon paddle in a metro area or on a backcountry camping trip under the stars, the benefits of time outside are undeniable."
Mercari forecasts a $325 billion secondhand market by 2031
Online marketplace Mercari this week released its 2023 Reuse Report in partnership with GlobalData. It states that despite economic uncertainty the resale market is one of the fastest-growing segments for consumer spending. The reuse market should grow by around 87% to $325 billion by 2031, per the report.
"It's a transformative time for resale, with nearly nine in ten consumers planning to shop secondhand in the coming year," John Lagerling, CEO of Mercari U.S., said in a statement. "We're seeing an uptick in Gen Z and millennials taking part in the circular economy, largely due to their commitment to sustainability and interest in discovering one-of-a-kind items.”
EBay beats expectations, but margins take a hit
EBay did better than the company thought it would in its second quarter, but analysts warned that its margins are suffering. Revenue in the period rose 5% to $2.5 billion, as gross merchandise volume declined 2% to $18.2 billion. Operating margin contracted to 20.4% from 21.7%, according to a company press release.
Like many retailers, the marketplace giant is leaning into advertising initiatives to boost revenue. In Q2, $341 million of its revenue came from first-party advertising products, primarily driven by promoted listings, up 47% year over year. Total advertising offerings generated more than $367 million in the period, about 2% of GMV, per the release.
“In Q2, we exceeded expectations on all key metrics while investing in sustainable growth," CEO Jamie Iannone said in a statement.
While Iannone touted the company’s investments in the last three years, Wells Fargo analysts led by Ken Gawrelski noted that, along with currency headwinds and other factors, the company’s acquisitions have been a drag on margins. There’s some evidence that eBay’s investments are “beginning to move the needle on GMV growth … but not demonstrable enough to justify 285bps of [fiscal year] margin degradation,” they said in emailed comments.
The mustard snack of your nightmares
Mustard and candy aren't two words you expected to be together, but alas. To honor National Mustard Day on Aug. 5, the French’s brand will release yellow, mustard-flavored Skittles, per a Tuesday press release.
Now through Aug. 5, fun-size packages of the collaboration will be given away to select winners in an online sweepstakes contest and at in-person pop-up events in Atlanta, Washington, D.C., and New York City.
"From Mustard Ice Cream to last year's viral Mustard Donuts, this year marks the fifth time French's has gone all out with unique, flavorful innovations to celebrate National Mustard Day. With the yellow holiday landing on August 5th, we knew we had to outdo ourselves," Valda Coryat, North America vice president of marketing for McCormick & Company, said in a statement.
Cinnabon popcorn seasoning?
Popcorn brand Orville Redenbacher released a collection of six unique seasonings per a Tuesday press release. The six include Buffalo Wild Wings buffalo, Cinnabon cinnamon roll, movie theater butter, nacho cheese, white cheddar cheese and ranch. The shake-on seasonings for microwave popcorn are based on trending snack flavors and licensing partnerships, according to the release.
"Ready-to-eat popcorn and other salty snacks have long offered a broad collection of flavors, but freshly popped popcorn has trailed behind. We're excited to shake up the microwave and kernels category with our diverse assortment of sweet and savory seasonings." Vice President and General Manager of Snacks at Conagra Brands, Spencer Fivelson, said in a statement.
What we’re still thinking about
That’s how much Selena Gomez’s Rare Beauty brand reportedly sold of its blush last year. The brand sold 3.1 million units of its blush, which retails for about $23, in 2022, according to a recent report from Bloomberg.
Rare Beauty, which launched its first line of products in 2020, has grown in popularity. The beauty brand boasts 6 million followers on its Instagram account.
Celebrity-backed retail brands have picked up traction in recent years and are among the most popular DTC brands, including Kim Kardashian’s Skims, Rihanna’s Savage X Fenty and Fenty Beauty, and Gwyneth Paltrow’s Goop. A recent report from JLL found that over half of celebrity retail brands are in the beauty category.
That's how much Amazon will now pay per share to acquire the robot vacuum brand iRobot, according to a Tuesday press release. Additionally, iRobot has taken on a $200 million financing facility to fund its ongoing operations.
Amazon initially agreed to acquire iRobot in August 2022 at a price of $61 per share at a valuation of about $1.7 billion.
“We’ve reached an amended agreement with Amazon that reflects the incurrence of iRobot’s new debt,” Colin Angle, chairman and CEO of iRobot, said in a statement. “iRobot is taking on new financing that we believe is sufficient to support our operations in a hyper competitive environment and meet our liquidity needs as well as pay off iRobot’s existing debt. This new financing is the outcome of a thorough process and represents the best terms reasonably obtainable on additional financing to support our operations.”
What we’re watching
Academy Sports and Outdoors adding second location in Virginia
Academy Sports and Outdoors plans to open a second Virginia store in Fredericksburg this fall.
While Academy didn’t provide a specific opening date, the company said it expects to employ about 60 people at the store, which will occupy a 77,000-square-foot space formerly filled by two retailers – And That and BuyBuy Baby. Along with offering sports and outdoor merchandise, the store will also provide additional services like free assembly on grills and bikes, fishing reel respooling, and the ability to buy hunting and fishing licenses.
Academy said in an announcement this week that it plans to open 13 to 15 stores this year, and a total of 120 to 140 new stores by the end of 2027. The Fredericksburg location is in the Central Park shopping center just off Interstate 95 about 50 miles north of the company’s other Virginia store in Richmond.