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Leadership Changes
August was packed with high-profile CEO appointments and departures, chief among them:
- Starbucks nabbed Chipotle CEO Brian Niccol and offered a pay package of over $110 Million to woo the executive.
- Victoria’s Secret poached Savage X Fenty’s top executive Hillary Super to replace Martin Waters as CEO.
- Estée Lauder set a date for longtime CEO Fabrizio Freda’s retirement - end of the year - without naming a successor.
- Tapestry announced the departure of apparel veteran Liz Fraser and welcomed beauty insider Eva Erdmann as kate spade’s new CEO.
Additional CEO appointments included Party City, Rite Aid, Leslie’s, Ashworth Golf, European Wax Center, Cecilie Bahnsen, Rapha, and Furla.
Earning Reports
Of the 103 retail earnings we tracked in August, the prevailing sentiments were “cautious optimism,” “better-than-feared” consumer spending, and “increasing uncertainty” with the US election looming ahead.
The mall brand renaissance continued, with “record” revenue figures from American Eagle Outfitters and Abercrombie, while Coach surpassed $5 billion in sales. Gap’s turnaround efforts continued bearing fruit, and even Victoria’s Secret reported an upswing in many metrics.
A tale of two Chinas emerged, with Apple, Esteé Lauder, Hugo Boss, Lanvin Group, PVH, Puma, Shiseido, and Tapestry all citing declining sales in the world’s second-largest economy as a direct cause of disappointing results. Meanwhile, Amer Sports, Canada Goose, Ralph Lauren, and VF Corp all reported growth or improvement in their China business and set their sights on continued growth in the region.
Financing/M&A
The spike in consumer-related PE activity we recorded in July abruptly dropped off.
A trio of bankruptcies occurred in the same week, as Avon, Blink Fitness and LL Flooring filed for Chapter 11. Around the same time, the online used furniture marketplace Kaiyo abruptly called it quits, leaving sellers in a lurch.
The pandemic-popular Amazon aggregator industry continued to deflate, as Branded and Heyday announced a merger and layoffs, and Blackrock put SellerX up for auction after the startup defaulted on a loan.
Industry News
The month kicked off with two ubiquitous, complex macro events that no company could ignore - the global market meltdown and brands’ adoption of the phrase “very demure, very mindful” rapidly spreading across social media.
Resale gained significant steam, with industry giants launching Resold at Walmart, IKEA Preowned, Bloomingdale’s Rebag partnership, and ThredUp’s new peer-to-peer section. Not to be outdone, Amazon updated and relaunched its pre-owned section, now called Amazon Resale.
China Inc. continued to grow its market share in the US and Europe, with a new cohort of upscale brands attracting Western customers at higher price points. Amid rising demand for Made-in-China goods, FedEx and Walmart launched new international shipping solutions to enable easier direct-from-China fulfillment.
The TikTok-fueled "Tote Bag Wars" continued, as Lands' End rolled out a $1 tote trade-in promo in pursuit of L.L. Bean and Trader Joe's viral tote frenzy.
In polarized DEI news, Gap Inc. named a new Chief Inclusion & Belonging Officer while Lowe’s joined the list of companies dialing back some DEI commitments.
In the US, retail real estate availability hit a 10-year low as rents continued to rise globally, and Simon Property Group reported the highest level of Q2 real estate net operating income in its history. A pronounced mismatch between the rate of new construction and demand for real estate continued to grow.
Top-Clicked Articles
Of the 500+ news items we summarized in August, the most read items were:
- As brands issue RTO orders, CEOs are running businesses remotely (Bloomberg)
- Saks Fifth Avenue falls behind dozens of vendor payments (Glossy)
- Luxury Brands Are Embracing the ‘Ozempic’ Coat for Fall Staples (Bloomberg)
- ‘The Stress Is Palpable.’ The Frenzy Over Target’s $5 Birds. (WSJ)
- 5 Moments That Make or Break a CEO-Board Chair Relationship (HBR)
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