Week in Review

December 3, 2022

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Week in Review | Dec. 03, 2022

“I just think we’re in for a tough December across retail.” – Victoria’s Secret CEO Martin Waters

FINANCE

Black Friday weekend (Nov. 24-28) sales rose 9% year-over-year to $68 billion in the U.S. and 2% globally to $281 billion, per Salesforce data. Cyber Monday sales record $11.3 billion in total spend, marking 5.8% growth year over year, according to data from Adobe Analytics.

Discounts hit record highs, with apparel discounts reaching 34%, per Salesforce.
Purchases using BNPL grew 5%.
Independent sellers on Amazon racked up more than $1 billion in sales.

Dollar General (USA) reported Q3 sales rose 11.1% to $9.46 billion. Net income was up 8% to $526.17 million.

The retailer is planning to open 1050 news stores in 2023.

PVH (USA) reported Q3 revenue fell 2% to $2.28 billion. The company reported a loss of $214 million, compared with earnings of $377 million a year ago. Inventory was up 32% year-on-year.

Five Below (USA) reported Q3 sales rose 6.2% to $645 million. Net income fell 33% to $16.1 million.

Designer Brands (USA) reported Q3 net income fell 43.6% to $45.2 million. Sales rose 1.4% to $865.0 million. The retailer lowered its full year guidance.

H&M (Sweden) said it plans to cut 1,500 jobs across its global operations as part of efforts to save $194 million a year, amid slowing sales and rising costs.

Nordstrom (USA) reported a loss of $20 million for the quarter ended Oct. 29. Sales fell 2.9% to $3.43 billion. Nordstrom sales were down 3.4%. Sales at Nordstrom Rack fell 1.9%.

Victoria’s Secret (USA) reported Q3 net sales fell 9% to $1.3 billion. Net income fell 70.4% to $22.2 million. Inventory rose 21.8% year-on-year.

MANAGEMENT INSIGHTS

Investors to Brands: Profit or Perish!

Patient investors and more rounds of venture capital funds have kept many DTC brands afloat, even as losses grew and companies were nowhere near profitability.

“For every $1 of revenue DTC brands earn, they have about $1.50 in debt,” said Lesley Hensell of Riverbend Consulting. With rising interest rates, that debt is becoming expensive.

A tougher retail environment has led to greater discounting – pushing profitability even further down the road for many brands. Read More

PODCAST

Rethinking Venture Capital Funding

The idea of getting VC backing for your brand seems like a founder’s dream. However it can also turn out to be a nightmare.

In the podcast Nick Fogle, Founder & CEO of Churnkey, shares some advice and cautionary tales about the pros and cons of venture capital.

You’ll Learn:

The Potential Pitfalls of Venture Capital
The Highest Impact Areas Where A Founder Should Invest Their Time
Top 3 Lessons Learned While Fielding Acquisition Offers And Ultimately Being Acquired

🎧 Listen to the podcast

RETAIL

H&M (Sweden) has rolled out a new “store experience”. The 7,000 sq. ft. space will rotate every four to 12 weeks to reveal a new “chapter” that includes updated fashion, visuals and events along with local partners. The concept is debuting in Brooklyn, New York.

Giordano (Hong Kong) is introducing new store concepts and new store openings to capture the opportunities as the six economies in the Gulf Cooperation Council (GCC) are set to rebound and show strong growth in the coming year. Read More

MARKET

The British pound soared to $1.23 – its highest level against the dollar in over five months despite gloomy economic figures stoking recession fears.

U.S. Federal Reserve chairman Jay Powell said he would continue raising interest rates to fight inflation, but at a slower pace.

Inflation in the eurozone is starting to cool, according to data published by the EU’s statistics agency. Still, it remains at 10%, and there’s a long way to go before hitting the union’s 2% target.