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 a proxy fight looming at Kohl’s to Signet revealing an exceptional holiday season of sales, here’s our closeout for the week.
What you may have missed
Mattress Warehouse gets a fresh investment
After DTC brands seemingly disrupted the mattress category, legacy players are once again proving attractive to investors. Mattress Warehouse received an investment from private equity firm Wynnchurch Capital, according to an announcement this week. The amount was not disclosed.
Wynnchurch’s Russ Gehrett, a partner, and Mike MacKay, vice president, will join Mattress Warehouse’s board.
The investment comes just weeks after competitor Mattress Firm filed papers with the Securities and Exchange Commission for an initial public offering. About three years prior, the retailer filed for bankruptcy.
Casper shareholders approve acquisition
Two months after Casper announced it agreed to be acquired by private equity firm Durational Capital Management, its shareholders approved the deal. The deal is expected to close next week, subject to other closing conditions.
The acquisition comes two years after the DTC brand made its public market debut. While the pandemic offered a boost in demand for Casper, as with other retailers selling home goods, the brand struggled with profitability.
Mergers and acquisitions have consistently remained the top exit option among DTC brands for the last decade, according to PitchBook. In 2021, 298 DTC brands were acquired, while 160 exited via buyout, 40 via IPO and seven through de-SPAC transaction.
Ulta names first female chief human resources officer
Ulta’s chief of human resources, Jeff Childs, is retiring in April, according to an SEC document the beauty retailer filed earlier this week. He has held that position since 2013 and is a member of Ulta’s leadership team. Ulta has already found his successor in Anita Ryan, who is currently Ulta’s senior vice president of human resources.
Ryan will be the first female chief human resources officer in the company’s history, according to the filing. She is a 19-year Ulta veteran who has worked in various roles in the beauty retailer’s human resources department over the years. Ryan is set to take over the position when Childs steps down on April 5.
Oscar Mayer reimagines face masks with … lunch meat?
In this week’s list of products that didn’t need to be made, Oscar Mayer nabs the top spot with “bologna-inspired” face masks. The off-putting shade of pink is meant to resemble the popular lunch meat but also happens to look like you’ve put another person’s skin on your face. The food brand partnered with Seoul Mamas, a Korean beauty and skincare company, on creating the limited-edition masks. The product, which sold out immediately, follows the trajectory of other questionable retail items.
According to Oscar Mayer, the face masks are a nod to the company’s history of “inspiring families to make unforgettable face masks by biting holes in bologna slices for their eyes and mouth.” However, for the sane among us, the masks mostly conjure images of Anthony Hopkins’ disturbing Hannibal Lecter scene or the much more lighthearted take from “The Office.” Keep your faces on and bologna off of them, folks.
Not good at gifting? Build-A-Bear’s got you
Unless gift giving is your love language, there comes a time when you feel lost on what to give someone. We’ve all been there. Build-A-Bear plans to do all the thinking for you by introducing a new “adult-to-adult” gifting solution called HeartBox.
HeartBox provides specialty curated gift boxes for various occasions. Consumers can choose between the Romantic at Heart Box, the Little Bit of Sunshine Box, the Hooray! It’s Your Birthday Box and the You’re the Best Box. Each HeartBox will also include a teddy bear in which consumers can record a personal voice message.
“The launch of HeartBox is reflective of our ongoing evolution into the large and growing gifting category. This new introduction represents a natural strategic extension as it is estimated that well over one-third of Build-A-Bear’s revenue is already related to birthdays or other gift-giving occasions,” Sharon Price John, president and CEO of Build-A-Bear Workshop, said in a statement. “With HeartBox, Build-A-Bear expects to leverage our knowledge, trust and expertise of creating special memories to the growing tween, teen and adult consumer-base which now represents over 40% of sales.”
What we’re still thinking about
That’s what Signet Jewelers raked in during its holiday season, the nine weeks ended Jan. 1, a 30.4% sales rise from last year, according to preliminary figures released Thursday. The company – which runs Kay Jewelers, Zales, Jared, H. Samuel, Ernest Jones, Peoples, Piercing Pagoda, JamesAllen.com, Diamonds Direct and jewelry subscription service Rocksbox – said that its holiday sales “were broad-based with all banners and merchandise categories up double digits.”
Preliminary same-store sales grew 25.2% year over year and 35.1% from 2019; e-commerce sales rose by $52.1 million year over year, as brick-and-mortar sales rose by $499.9 million. As a result, the company is expanding its share repurchase program and raising its guidance for this year.
“We delivered operating margin expansion as our strategy drove higher traffic and strong conversion with effective promotion and cost management,” Chief Financial and Strategy Officer Joan Hilson said in a statement.
That is roughly half the footprint of retailer Escada America, the U.S. face of the global women’s upscale fashion brand that shares the name. The retailer filed for bankruptcy this week, with plans to close five unprofitable stores, which would leave it with just five still operating.
The company’s financial director said it is still struggling with uncertainty created by the pandemic and hasn’t been able to reach lease agreements with all of its landlords. The global brand’s financial issues precede the pandemic and came under new ownership in 2019. Escada America intends to keep operating and use the bankruptcy process to restructure its finances.
What we’re watching
Coach invests in apprentices
Coach this week introduced a one-year leather craftsmanship skills and training program, dubbed the Coach (Re)Loved Craftsperson Apprenticeship Program, according to a company press release. It builds on an existing apprenticeship course, which has already trained around 400 in-store craftspeople.
The program, which will begin in June, is currently accepting applications and will take place at the company’s workshop in New Jersey. Participants will learn skills that will enable them to “transform pre-loved Coach bags into newly reimagined and restored bags for resale,” per the announcement.
The effort is part of the company’s commitment to circular fashion, which includes the Coach (Re)Loved Exchange — a trade-in service where consumers can swap eligible pre-owned Coach bags for credit toward their next purchase. It is currently offered at 30 locations, and the company plans to expand it to all stores in the U.S. and Canada over the next few months.
A looming proxy fight at Kohl’s
Not too long ago Kohl’s was a retail turnaround success story and among the healthiest department stores in an ailing sector. But as some of its peers have outperformed it, the company has become vulnerable to activist shareholders.
One of those investors made noise this week, firing off a letter to fellow shareholders that accused Kohl’s board of a lack of urgency and mismanagement. Macellum Advisors, owner of nearly 5% of Kohl’s common stock, said it plans to nominate its own slate of Kohl’s directors at the company’s annual investor meeting.
In its letter, Macellum agitated for Kohl’s to sell owned real estate and for a massive increase in share buybacks to shower cash on investors. The financial firm also, somewhat ambiguously, suggested a possible spinoff of Kohl’s e-commerce business. In lieu of those and operational changes at the retailer, Macellum’s Jonathan Duskin wrote that “a sales process must commence” for Kohl’s.