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Less than two years into the opening of Hudson Yards, one of the most expensive real estate projects in the country, the development's shopping center is losing its anchor tenant. Last week, Neiman Marcus, which filed for bankruptcy in May, announced that it would be closing its Hudson Yards store, among other locations. As Hudson Yards considers a new type of tenant to take over the space, which spans three floors, each type of tenant comes with its own set of drawbacks.
Last week, Simon Property Group and Authentic Brands Group submitted a $305 million for 200-year-old bankrupt apparel retailer Brooks Brothers, through a joint LLC the two had set up called Sparc. The deal is still subject to court approval, as well as if higher bids come in. But no matter how the deal pans out, it gives some important insight into what mall owners like Simon are looking for in acquisition targets, as an unprecedented number of struggling retailers are likely to be up for sale this year.
During the coronavirus pandemic, direct-to-consumer startups in categories ranging from personal care to athletic apparel have reported tripe-digit sales growth. The big question though, is how much it will last, as coronavirus cases start to rise again in some states like California and Texas, forcing other businesses to close once again. Five direct-to-consumer startups said they aren't seeing many signs of headwinds -- yet.
Despite a newfound appreciation for them in advertising campaigns, essential retail workers say their jobs have become more stressful as the pandemic has dragged on, and short-term pay bonuses and words of thanks have provided little comfort.
During Snap's second quarter earnings yesterday, CEO Evan Spiegel called out e-commerce advertising as one of the company's bright spots during the quarter, as consumers are spending more money online during the coronavirus. Snap's revenue overall grew 17% year-over-year, to $454 million. But, even before the pandemic, Snapchat was heavily focused on wooing new e-commerce advertisers, particularly with new ad formats.
Since launching Instagram Checkout a year and a half ago, which allows customers to buy products from participating retailers' websites, Instagram has made it a priority to get more well-known retailers using the feature. Now, the next step on the app's to-do list is to make shopping more visible on Instagram. That was signaled by the launch of a new Shop tab in Instagram Explore last week. But Instagram still has a ways to go until users think of it as a shopping destination first and foremost.
Shopify has a bevy of competitors, like Magento, WooCommerce, Salesforce, Microsoft Amazon and BigCommerce, which just filed to go public this week. But no one company yet has emerged as the biggest threat to Shopify's position as the go-to e-commerce platform for DTC brands. Shopify's dominance says a lot not just about the state of other e-commerce platforms, but also about the state of DTC brands.
Since the beginning of the coronavirus pandemic in the U.S., most national retailers have held off on requiring customers to wear masks for entry, unless the state or city a particular store is in required it. Now, that's starting to change. Yesterday, Walmart announced that it would require customers to wear face masks to enter stores starting on July 20. And the largest industry trade group is encouraging other retailers to follow in Walmart's footsteps.
Before the coronavirus, opening more brick and mortar stores was a surefire way for DTC brands to acquire customers more profitably. Now, that calculus is changing.
Back-to-school shopping is an important time of year for retailers. Parents typically spend hundreds of dollars, on average, during back-to-school season, and it's one of the few shopping holidays where spending hasn't drastically shifted as much online. But that could change this year, thanks to the coronavirus, as shoppers remain hesitant to visit stores, and parents are unsure yet what all they will exactly need on their kids' back-to-school list.
As retailers seek to make greater inroads into health care, many of them have unveiled aggressive plans to launch dozens -- if not hundreds -- of their own primary care clinics over the coming years. Whichever of them builds the most successful chain of clinics has the potential to win over a very lucrative share of shoppers' wallets.
After months of Instagram posts about how "we're all in this together," and turning their factories into production centers for masks, direct-to-consumer brands are finally starting to return to business as usual. That's particularly evident by the number of new startups entering the market. But they playbook they're following is rapidly changing.
As part of Nike's plan to increase the percentage of its sales that come from its direct-to-consumer, the company has been opening a slew of new stores in order over the past couple of years to boost sales. Now, the company is unveiling a new retail format that it hopes will make its stores a more regular destination for shoppers. Called Nike Rise, they serve as a hub for local sports enthusiasts, by hosting new in-store events as well as through the addition of new app features.
All retailers that rely heavily on brick-and-mortar stores have had to pivot their business models in recent months, and toy store startup Camp is no exception. But what's unusual about Camp, which has five stores, is that it doesn't rely just on sales of toys in order to drive revenue. Co-founder and CEO Ben Kaufman previously told Modern Retail that only 20% the business comes from toy sales. The company also makes money in-store sponsorships and ticket sales for in-store activities like interactive storytimes and arts and crafts sessions. But since the coronavirus has forced Camp's stores to close for months, Camp has had to figure out ways to move those sponsorship deals online.
Despite experiencing unprecedented sales declines, some retailers are still willing to open their wallets. At least, Lululemon proved it was when the athleisure brand announced last week that it was acquiring Mirror, a connected fitness startup that it had previously acquired, for $500 million. The news was largely celebrated as a "win" for the direct-to-consumer community. But it may also gives some startups a sense of false hope.
During its fiscal first quarter earnings, Nike reported that sales were down 1% year-over-year. In today's retail environment, that's a success. The athletic apparel reported that while it's still not seeing the same in-store traffic that it was a year ago, it's digital sales are up 82%, even as more than 90% of its stores were reopened. Nike's benefitted from seeing a huge increase in downloads of its apps, which include its main Nike shopping app, Nike Train Club, and Nike Run Club.
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