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☆ These retailers are most at risk for a margin squeeze this earnings season thanks to cautious consumers, heavy promotions
▼ + stars: | 2023-05-16 | by ( Gabrielle Fonrouge | In Gabrielle-Fonrouge | ) www.cnbc.com time to read: +4 min

The price worries could suggest trouble for retailers that are relying on promotions to win over cost-conscious customers. Retailers that largely sell apparel, shoes or home goods are most likely to see squeezed margins due to promotions this earnings season, according to analysts and research. In a Thursday research note, UBS analysts reported softline promotions increased to 17% in April, a 2 percentage point jump year-over-year. Softline retailers are those that sell "soft" goods such as apparel. "This is likely a bad sign for Softline retailers' 1Q23 gross margins."

☆ Bowlero, the public company that reimagined bowling, faces dozens of discrimination claims that the feds want to settle for $60 million
▼ + stars: | 2023-05-11 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +19 min

The 73 EEOC claims brought by individual former employees against the company sparked the larger pattern or practice investigation into age discrimination. Only a fraction of EEOC age discrimination complaints — 2.8% in fiscal 2021 — resulted in reasonable cause determinations, EEOC data show. It went from running six bowling alleys to 272 overnight after it acquired AMF, which was then the largest bowling company in the world and was in bankruptcy. The following year, Shannon's company acquired the Brunswick Corporation, the second-largest bowling company in the world, and changed his company's name to Bowlero. Dowe said negotiations fell apart when Bowlero countered the EEOC's $60 million settlement proposal with a proposal of $500,000.

☆ Lawmakers urge SEC to crack down on Chinese retail giant Shein over alleged forced labor
▼ + stars: | 2023-05-01 | by ( Chelsey Cox | ) www.cnbc.com time to read: +3 min

WASHINGTON — Bipartisan lawmakers are urging the nation's top markets regulator to require Chinese fast-fashion giant Shein to disclose potential forced labor practices ahead of the company's possible initial public offering in the United States. "As a global company, Shein takes visibility across our entire supply chain seriously. We have zero tolerance for forced labor." "Other experts argue that it is appropriate to presuppose that any product made in the XUAR is made with forced labor." Independent coalition Shut Down Shein has also called on the SEC to deny IPO registration to Shein unless it provides proof of compliance with the Uyghur Forced Labor Prevention Act.

☆ Gap to lay off 1,800 workers as part of broad push to cut costs
▼ + stars: | 2023-04-27 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +4 min

The Gap logo is displayed at a Gap store on April 25, 2023 in Los Angeles, California. Gap will lay off about 1,800 employees as part of a broad effort to cut costs and streamline operations, the company said Thursday. The layoffs are expected to result in annualized savings of $300 million, Gap's interim CEO Bob Martin said in a statement. The layoffs will cost Gap about $100 million to $120 million in aggregate pre-tax costs, according to a securities filing. About 9% of its global staff work in headquarter locations.

☆ Il Makiage parent Oddity buys biotech startup Revela to design new molecules for beauty products
▼ + stars: | 2023-04-27 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +2 min

Oddity is buying startup Revela for $76 million, its largest acquisition to date, and is putting another $25 million toward building Oddity Labs in Boston. The merger will bring to Oddity a team of scientists tasked with creating brand-new molecules, using artificial intelligence, that can be used in its cosmetics brands and future lines. AI-based molecule discovery is a common tool used in the pharmaceutical industry to create new drugs, but it isn't widely used in the beauty and wellness industry. Legacy brands have long relied on building products using proprietary formulations with a similar set of active ingredients, such as retinol, hyaluronic acid and peptides. "With this acquisition, we are using biologics to bring game-changing, science-backed beauty and wellness products to the market and to our users.

☆ Gap will cut more than 500 workers in latest layoffs, as struggling retailer tries to reduce costs
▼ + stars: | 2023-04-25 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +3 min

A clearance sale sign is seen at the Gap retail store on September 20, 2022 in Los Angeles, California. Gap is laying off more than 500 employees in an attempt to cut costs and become more efficient, as the company tries to move back to profitability, CNBC has learned. The cuts come after Martin told investors during a March earnings call that the apparel retailer's staff has been "dampened by a complicated organizational structure, bureaucracy, and outdated processes." It managed to turn an annual net profit in 2021, but reported net losses in both 2020 and 2022. As of Jan. 28, Gap employed about 95,000 staff members, 81% of which work in retail locations.

☆ Bed Bath & Beyond vows it can pull off a sale – here's what that means for shareholders
▼ + stars: | 2023-04-24 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +5 min

Bed Bath & Beyond is confident it can offload its names and stores after it declared bankruptcy, but shareholders are expected to be wiped out as its stock plummets. "Bed Bath & Beyond has pulled off long shot transactions several times in the last six months, so nobody should think Bed Bath & Beyond will not be able to do so again. To the contrary, Bed Bath & Beyond and its professionals will make every effort to salvage all or a portion of operations for the benefit of all stakeholders," she added. The likelihood of finding a buyer will come down to how much Bed Bath and Buy Buy Baby's names are worth. As of late November, Bed Bath & Beyond had about $4.4 billion in assets and $5.2 billion in debts, court filings show.

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☆ Bed Bath & Beyond files for bankruptcy protection
▼ + stars: | 2023-04-23 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +5 min

Bed Bath & Beyond on Sunday filed for Chapter 11 bankruptcy protection after a series of last-ditch efforts to raise enough equity to keep the business alive failed at the eleventh hour. Bed Bath has been hanging on by a thread ever since but has refused to go down without a fight. Days after the second stock offering was announced, Bed Bath said it had partnered with liquidator Hilco Global to boost its inventory levels. Soon, though, Bed Bath revealed in a securities filing that it didn't have enough cash to pay its debts and had defaulted on its credit line with JPMorgan. Under the reduced credit agreements, Bed Bath was on the hook for monthly interest payments.

Baldwin, who is also a producer on the film, was charged with two counts of manslaughter in the death of "Rust" cinematographer Halyna Hutchins. Though Baldwin's manslaughter case has been dropped, the actor still faces other legal woes as a result of the accidental shooting. In early February, Hutchins' parents and sister filed a lawsuit against Baldwin, "Rust" producers and other crew members, accusing them of negligence and intentional infliction of emotional distress, among other charges. Halls' hearing was the first to be conducted under the supervision of special prosecutors Kari Morrissey and Jason Lewis. In her place, she appointed Morrissey and Lewis as special prosecutors.

☆ Lululemon has approached Hydrow about a possible sale of Mirror
▼ + stars: | 2023-04-18 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +3 min

Lululemon is looking to sell its at-home fitness business Mirror and has approached competitor Hydrow as a potential buyer, CNBC has learned. A Lululemon company spokesperson said they "don't comment on rumors or speculation." Lululemon announced it would acquire Mirror for $500 million at the height of the at-home fitness bonanza in June 2020. The segment has since rebranded as lululemon Studio but has been weighing on the fitness apparel company's balance sheet. "We view lululemon Studio in the same way we view any innovation.

☆ Nordstrom adds former Nike executive to board as activist battle continues
▼ + stars: | 2023-04-17 | by ( Melissa Repko | In Melissa-Repko | ) www.cnbc.com time to read: +2 min

Nordstrom on Monday said it has tapped former Nike operating chief Eric Sprunk to join its board, as the company faces pressure from an activist investor. Sprunk, who was Nike's COO from 2013 to 2020, will join the board immediately, the company said. In a news release, Nordstrom board member Brad Tilden highlighted Sprunk's "track record of driving e-commerce growth and large-scale transformations within a complex global business." Nordstrom did not say in the news release whether the board appointment was board of an agreement with Cohen. Net sales for the company's namesake banner decreased 2.4%, and net sales for its off-price banner, Nordstrom Rack, dropped 8.1% in the quarter versus the year-ago period.

☆ NJ deli stock fraud defendant denied bail as judge calls him a serious flight risk
▼ + stars: | 2023-04-17 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +4 min

Peter Coker Jr., left, is issued search warrants from police at his villa on the southern resort island of Phuket, Thailand, Jan. 11, 2023. A magistrate judge had approved Peter Coker Jr.'s release on a $1.5 million bond in late March, but he remained in an Essex County jail as prosecutors appealed the ruling. He added that Coker Jr.'s local doctors had advised him not to travel because of his health issues. Assistant U.S. Attorney Shawn Barnes acknowledged that Coker Jr. had health concerns, but said officials could have made arrangements to ensure his safety while traveling. After the judge delivered her ruling, Coker Jr.'s mother cried in the gallery and outside of the courtroom.

☆ Walmart sells Bonobos to WHP Global and Express in $75 million deal
▼ + stars: | 2023-04-13 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +3 min

Walmart has sold menswear brand Bonobos to brand management firm WHP Global and Express in a $75 million deal announced Thursday. WHP, which took a 60% stake in Express in December, will acquire the Bonobos brand for $50 million, the company said in a news release. In a statement, a Walmart spokesperson said the company decided "it's the right time to sell Bonobos" after nearly six years. Last February, Bonobos launched Bonobos Fielder – a more affordable riff on the original brand that sold athleisure on its website, Walmart.com and select Walmart stores. Bonobos CEO John Hutchinson will become brand president of Bonobos and report to Baxter after the deal closes.

☆ Rent the Runway's losses narrow as company edges closer to profitability
▼ + stars: | 2023-04-12 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +5 min

Rent the Runway's losses narrowed in its fiscal fourth-quarter earnings reported Wednesday as the digital retailer continues to streamline its costs and work towards profitability. For the full year, the company expects revenue in the range of $320 million to $330 million. Active subscribers excludes those with paused memberships. At the end of the fiscal year, Rent the Runway had 126,712 active subscribers, a 10% increase compared to the year-ago period. The company expects its active subscriber count to grow by more than 25% in the next fiscal year.

☆ Blocked emergency exits and 'dangerous' fire hazards: Dollar General again found in violation of federal workplace safety standards
▼ + stars: | 2023-04-07 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +3 min

The exterior of a Dollar General convenience store is seen on March 16, 2023 in Austin, Texas. Dollar General has again been found in violation of federal workplace safety regulations for "willfully exposing" staff to fire hazards at a Pennsylvania store, the Department of Labor said Friday. "Dollar General Corp. has a substantial history of the same violations and hazards found at stores all around the U.S. Just last week, OSHA said Dollar General was in settlement talks with federal regulators after the retailer was labeled a "severe violator" of workplace safety rules. In fiscal 2022, which ended Feb. 3, Dollar General reported $37.84 billion in sales and a net income of $2.41 billion.

☆ Bed Bath & Beyond proposes reverse stock split as it struggles to avoid bankruptcy
▼ + stars: | 2023-04-06 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +3 min

Bed Bath & Beyond wants shareholders to approve a reverse stock split at an upcoming special meeting, as the retailer keeps working to avoid filing for bankruptcy, according to a securities filing late Wednesday. "The Company may be unable to avoid bankruptcy if the Reverse Split Proposal fails to obtain shareholder approval. The beleaguered retailer said the reverse stock split would be at a ratio, to be determined by the board, in the range of 1-for-10 to 1-for-20. The reverse split could also boost Bed Bath's per-share price, which the company expects could improve perception of its stock and attract more investors. Still, even if the reverse split temporarily boosts Bed Bath's share price, the stock offering will eventually dilute it, which happened after the company announced another stock offering in February.

☆ Bed Bath & Beyond gets $120 million merchandise lifeline as it faces bankruptcy threat
▼ + stars: | 2023-04-05 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +3 min

Bed Bath & Beyond announced Wednesday it is working with Hilco Global to get merchandise back on its shelves in the company's latest effort to stay alive and avoid bankruptcy. Last week, the company reported preliminary results for its fiscal fourth quarter. The company noted negative operating losses have continued, although it noted it hasn't depleted its free cash flow. The company reported $2.05 billion in revenue for the fiscal fourth quarter of 2021. On March 30, Bed Bath announced another stock offering of $300 million and warned it would likely need to file for bankruptcy protection if it doesn't work out.

☆ Peloton shares are on the up — but will it last? Here's what Wall Street thinks
▼ + stars: | 2023-03-31 | by ( Ganesh Rao | ) www.cnbc.com time to read: +4 min

Shares of Peloton Interactive are making a comeback, with the stock up by 30% this year. But many investors who bought into the connected fitness company during the pandemic are still nursing big losses; shares are down 93% from their all-time high in late 2020, currently trading around $10.40. The consensus price target of 30 analysts ($17) points toward a 63% upside over the next 12 months. They also noted that digital-only subscriptions, which are separate from the connected fitness subscribers, fell marginally in the latest quarter. UBS' price target of $8 represents a more than 20% drop from the current share price.

Peter Coker Jr., left, is issued search warrants from police at his villa on the southern resort island of Phuket, Thailand, Jan. 11, 2023. NEWARK, N.J. – A former fugitive in the securities fraud case involving a New Jersey deli company once valued at $100 million renounced his U.S. citizenship in 2019, prosecutors revealed Thursday as they asked a judge to deny him bail. In the same letter, prosecutors said Coker Jr. had "stood to make tens of millions of dollars" from a hoped-for reverse merger of the deli company, which the goal of the "complex, long-term fraud' spanning at least seven years that grossly inflated its stock price. CNBC in 2021 published several dozen articles that exposed eyebrow-raising consulting agreements, troubled legal histories, and other issues related to people connected to the deli company. I have no intention to return to live or work in the U.S., and have therefore decided to renounce my U.S.

☆ Chewy and Petco earnings make it clear: Pet health care is their future
▼ + stars: | 2023-03-23 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +5 min

The retailers, which both released their quarterly earnings on Wednesday, began investing heavily into pet health when the pandemic-fueled pet boom saw 23 million American households welcome a new animal into their homes. The boom turned the overall pet market into a $123.6 billion dollar powerhouse in 2021, and it's expected to grow. Pet health care – and the high margins that come with it – is a crucial component to that overall market. It changed its name to Petco Health and Wellness Company in 2020. Pet adoptions surged during the pandemic, triggering a surge in demand for pet goods.

The retailer had been working to steer itself back to profitability, and got there in part by cutting costs. Selling, general and administrative expenses came in at $453.4 million for the quarter, or 20.4% of sales, compared to $538.9 million, or 23.9% of sales, in the year-earlier period. GameStop did not provide financial guidance and has not done so since the early days of the pandemic. For the quarter ended Jan. 28 , net sales dropped slightly to $2.23 billion from $2.25 billion in last year's fourth quarter. "GameStop is a much healthier business today than it was at the start of 2021," he said.

☆ Nike's holiday quarter plagued by bloated inventory, weak China sales
▼ + stars: | 2023-03-21 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +4 min

While Nike CEO John Donahoe told investors last quarter he believes the company is past its inventory peak, the company warned gross margins were expected to take a hit during the holiday quarter. During an earnings call with investors Tuesday, executives said they're "increasingly confident" Nike will exit the fiscal year with healthy inventory levels. They also expect to see "even leaner inventory" than they'd anticipated given sales momentum, the executives added. Citing its strong performance in the quarter, Nike now expects fiscal year revenue to grow by high single digits, compared to mid single digit guidance it gave in the prior quarter. In the next quarter, Nike expects flat to low single digit revenue growth.

☆ Foot Locker touts 'renewed' Nike relationship as it reports slide in holiday-quarter profit
▼ + stars: | 2023-03-20 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +3 min

Foot Locker plans to open dozens of Power stores across the U.S. over the next few years. Foot Locker CEO Mary Dillon on Monday touted a "renewed" and revitalized relationship with Nike , including an emphasis on what she called "sneaker culture." Shares of Foot Locker rose about 4%. Dillon, the former chief executive of Ulta, said Foot Locker and Nike have "re-established joint planning, as well as data and insight sharing." "The fruits of our renewed commitment to one another will begin to show up in holiday this year as we build increasing momentum to 2024 and the 50th anniversary of Foot Locker," Dillon said.

America's biggest retailers say organized retail crime has grown into a multibillion-dollar problem, but the effectiveness of their strategies to solve it and the validity of the data overall have come into question. However, the problem isn't as clear-cut as retailers and trade groups have made it seem. External retail crime accounts for only 37% of those losses, or about $35 billion, the NRF data shows. Still, law enforcement agencies and retailers insist organized retail crime remains an issue and said they stand behind their data. We see it every day in our stores," Scott Glenn, Home Depot's vice president of asset protection, told CNBC.

☆ Allbirds admits missteps, unveils new strategy after brutal holiday quarter
▼ + stars: | 2023-03-09 | by ( Gabrielle Fonrouge | ) www.cnbc.com time to read: +2 min

A woman walks past an Allbirds store in the Georgetown neighborhood of Washington, D.C., on Tuesday, Feb. 16, 2021. The company is betting its new strategy will reignite growth, improve capital efficiency and drive profitability in the coming years. The company said its most recent quarter was hurt by a "disappointing" holiday season. While full year net revenue increased by 7% to $297.77 million, Allbirds' net losses in its first full year as a public company ballooned to $101.35 million, more than double the $45.37 million in losses it recorded in 2021. Gross margins in the quarter decreased to 43.1% compared to 50.2% in the year ago period as selling, general and administrative expenses jumped to $41.6 million, compared to $36.7 million in the fourth quarter of 2021.

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