U.S. retail sales increased in April, suggesting consumer spending is holding up in the face of economic headwinds including inflation and high borrowing costs. The value of retail purchases rose 0.4% after an upwardly revised 0.7% decrease in March, Commerce Department data showed Tuesday. Excluding autos and gasoline, sales increased 0.6%. The figures aren’t adjusted for inflation. While the overall figure came in below the median estimate in a Bloomberg survey of economists, the gain in sales excluding autos and gasoline topped expectations. Seven out of 13 retail categories rose last month, including advances at auto dealers, general merchandise outlets and online merchants. The advance in April sales suggests low unemployment and steady wage growth are supporting demand for merchandise.
Revlon Group Holdings emerged from bankruptcy last week with $2.7 billion less debt to worry about, but a balance-sheet makeover alone won’t help the company reclaim its place in an industry it shaped nearly a century ago, according to a Bloomberg News commentary. Big rivals such as L’Oreal SA and Estée Lauder have deeper pockets, while newer brands including Rare Beauty and e.l.f. Cosmetics have captured the imagination of young consumers. What Revlon needs is a niche it can own that plays to its strong connections among Gen X and millennials, two cohorts with an abundance of spending power that grew up with the brand, according to the commentary. It helps that consumers in the U.S. are more willing to spend on beauty these days. Consultancy McKinsey & Co. estimates that annual sales in the sector over the next few years will increase at nearly double the 4% pace seen pre-pandemic. The market for anti-aging products, from creams and lotions to ampoules and serums, reached $5.3 billion last year, growing 24% since 2017, according to market research provider Euromonitor International, which forecasts sales to grow 27% to $6.8 billion by 2027.
Bedding provider Tempur Sealy has agreed to acquire Mattress Firm in a cash-and-stock transaction valued at about $4 billion, the companies said yesterday, according to the Associated Press. Mattress Firm operates more than 2,300 brick-and-mortar retail locations and an e-commerce platfom. After the Tempur Sealy acquistion is complete, the two companies will have a total of some 3,000 retail stores, 30 e-commerce platforms, 71 manufacturing facilities and four research-and-development facilities worldwide. Tempur Sealy will pay about $2.7 billion in cash and $1.3 billion in stock to Mattress Firm, which is partially owned by Steinhoff International Holdings NV. That reflects the issuance of 34.2 million common shares, based on Monday's closing share price of $37.62. The companies expect to complete the transaction in the second half of 2024. After the acquistion is complete, Mattress Firm is set to operate as a separate business unit within Tempur Sealy, which received a request from the Federal Trade Commission for additional information and documents related to the transaction. The company plans to “work cooperatively” with the FTC to complete the acquistion. While Mattress Firm and Tempur Sealy have a long history as retail partners, the two have had a rocky relationship in recent years. The companies temporarily ended their partnership in January 2017 — in a move that notably removed popular Tempur-Pedic beds from Mattress Firm stores. The following year, in August 2018, Tempur-Pedic sued Mattress Firm for allegedly "selling confusingly similar products under the ‘Therapedic’ name, and copying the look and feel of the entire Tempur-Pedic brand and consumer experience." Tempur-Pedic also accused Mattress Firm of continuing to sell Tempur-Pedic mattresses beyond the 2017 end of their partnership. In October 2018, Mattress Firm filed for chapter 11 protection and closed hundreds of stores. At the time, the Houston-based company pointed to years of overexpansion that resulted in “cannibalization” of sales. Mattress Firm’s then-CEO Steve Stagner later resigned in April 2019. Months after Stagner's resignation, Tempur Sealy and Mattress Firm reconciled with a new, long-term supply agreement. In addition to announcing plans to acquire Mattress Firm on Tuesday, Tempur Sealy also reported a first-quarter profit of $85.3 million, or 48 cents per share. Excluding one-time items, earnings were 53 cents per share.
Weight loss brand Jenny Craig has begun liquidating its operations in the U.S. after efforts to ease a cash crunch fell short, Bloomberg News reported. Jenny C Holdings LLC and affiliates filed for chapter 7 bankruptcy on Friday in Delaware, court papers show. The move means Jenny Craig will cease operating and see its assets sold off in pieces. Jenny Craig acknowledged the wind-down on its website. Customers’ auto-delivered subscriptions have been canceled, while coaching sessions and merchandise sales have ceased, the company said. Since founder Jenny Craig opened the company’s first brick-and-mortar location in 1983, diet fads have changed dramatically. Weight-loss drugs, at-home exercise machines and health-food stores have reshaped the industry landscape. The firm, backed by HIG Capital, struggled to maintain enough cash in recent months as it stared down a first-lien term loan due in October 2024. It has searched for a buyer and held active discussions with lenders in an attempt to rework roughly $250 million of debt.
Summit Restaurant Holdings, a group of CKE franchisees that operated over 145 Hardee’s restaurants in eight states at its peak, filed for chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Colorado, on Thursday, court records show, RestaurantDive.com reported. Summit Restaurants recently closed 39 stores and said it currently operated 108 in its bankruptcy filings. Summit is a part of Capstone Restaurants, which owns and operates about 226 Carl’s Jr. and Hardee’s restaurants, according to its website and court records. In a statement emailed to RestaurantDive.com, CKE said that its “goal is to maintain the maximum number of stores continuing to operate, backed by a capital structure that is sustainable and poised for long-term growth and success, and we are working with all parties to achieve that goal.”
Discount home-goods retailer Christmas Tree Shops filed for chapter 11 on Friday with a plan to emerge from bankruptcy in months with its store base mostly intact, WSJ Pro Bankruptcy reported. The 82-store chain filed bankruptcy aiming to close 10 underperforming locations in bankruptcy and to exit chapter 11 by August, Christmas Tree Shops said. The Middleboro, Mass.-based company has no plans to seek a buyer. Owners Marc and Pam Salkovitz, who are also creditors of the company, plan to retain an ownership stake in the restructured business, Salkovitz said on Friday. “This is strictly a financial restructuring. Our operations are sound,” said Salkovitz, the company’s chairman. Christmas Tree Shops filed for bankruptcy with a $45 million loan, including roughly $20 million in fresh capital, from its lenders to finance it through chapter 11, Salkovitz said. The loan is subject to bankruptcy court approval.
Christmas Tree Shops, the discount home-goods chain spun out by Bed Bath & Beyond in 2020, is preparing to file for bankruptcy as early as this weekend, WSJ Pro Bankruptcy reported. The Middleboro, Mass.-based chain of roughly 80 bricks-and-mortar stores recently hired Boston-based law firm Murphy & King to prepare a potential chapter 11 filing. The chain was acquired from Bed Bath & Beyond by Handil Holdings, owned by entrepreneurs Marc Salkovitz and Pam Salkovitz. They embarked on a plan to rebrand the stores as CTS to increase awareness of the breadth of its offerings beyond Christmas items. Mr. Salkovitz told the Wall Street Journal in 2021 that the name of the chain led many customers to believe that the stores only sell Christmas-related items. Christmas Tree Shops could follow its former parent into bankruptcy. Bed Bath & Beyond filed for chapter 11 in April after years of losses and failed turnaround plans left the home-goods chain short of cash.
U.S. retailers replaced technology firms in cutting the most number of jobs in April, as companies show little signs of easing their belt-tightening drive in an uncertain economy, Reuters reported. Higher interest rates to counter the impact of inflation have muddied the outlook for the U.S. economy, forcing Corporate America to undertake stringent measures to protect itself from any fallout from a potential recession. The sector has cut 36,000 jobs this year, which is still well below the 114,000 jobs cut by technology companies, including Meta Platforms Inc and Amazon.com Inc , according to a report by Challenger, Gray & Christmas Inc. "Retailers and Consumer Goods Manufacturers are preparing for a tightening in consumer spending, particularly with the Fed's hike to interest rates in an attempt to control inflation," said Andrew Challenger, senior vice president at the firm. So far this year, major retail and consumer companies including Gap Inc and Walmart have announced job cuts. The report also said job cuts last month fell 25% to about 67,000 - the lowest so far in the year, taking total layoffs to around 337,000 jobs since the start of the year.
Jenny Craig, the weight loss and nutrition business backed by HIG Capital, will shut down after four decades of operation after failing to secure additional financing, according to an employee, Bloomberg News reported. Management informed workers of the news in an email on Tuesday, and company-owned centers where members pick up meals, consult with coaches and weigh in are closed as of yesterday, the employee said, adding that franchise-owned locations may remain open. Jenny Craig had been seeking a buyer as it struggles amid increased competition, including against much-hyped new weight-loss drugs. With about 500 North American locations and around 600 centers worldwide, Jenny Craig was also hurt by the COVID-19 pandemic as customers stayed home. Bloomberg News previously reported that the company was mulling bankruptcy if a buyer didn’t surface. The company also had plans to move to an online-only model, but it’s unclear whether that will happen, the employee said.
Nordstrom is the latest retailer to shutter stores in downtown San Francisco as crime, rising costs and the fallout from remote work forces lead companies across the country to reevaluate viability in major cities, the Washington Post reported. The Seattle-based retailer, citing dwindling foot traffic, will not renew leases for its store in Westfield Mall and a Nordstrom Rack across the street, according to an email sent to staff from chief stores officer Jamie Nordstrom. The Westfield store will be open until the end of August, and the Rack location will close July 1. In a statement to the Post, Westfield attributed the closure to “the deteriorating situation in downtown San Francisco” and blamed the departure of businesses on “unsafe conditions for customers, retailers, and employees, coupled with the fact that these significant issues are preventing an economic recovery of the area.” Whole Foods announced in April it was shutting down its year-old flagship store downtown “for the time being” to “ensure the safety of our Team Members,” the company told the Post. Retailers Anthropologie and Office Depot are also exiting the area.
