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The post-holiday fallout is coming swiftly as retailers brace for a difficult environment in 2023. In the first week of the year, several retailers issued warnings about lackluster sales, and said they were exploring options to save their businesses. Here’s a look:
Macy’s warns of soft holiday quarter
Macy’s issued a warning that sales during its holiday quarter would be light, while it anticipates the consumer to be “pressured” this year.
In a Friday update on the fourth quarter issued prior to its earnings call, Macy’s said sales for the fourth quarter are likely to be at the low-end to mid-point of its forecast, between $8.16 and $8.4 billion. Inventories, meanwhile, are expected to be slightly below 2021, and down mid-teens relative to 2019.
“Black Friday/Cyber Monday sales were in line with our expectations, while the week leading up to and following Christmas were ahead. However, the lulls of the non-peak holiday weeks were deeper than anticipated, CEO Jeff Gennette said. “Overall, our occasion apparel and gift-giving business were strengths and inventory composition and price points aligned with customers' needs.”
Gennette added that Bloomingdale’s and Bluemercury “continued to outperform” expectations.
Coming ahead of its full earnings report in March, the update also sought to set expectations for the coming year, in which the toll of inflation and interest rates is expected to dampen consumer demand for discretionary purchases.
“Based on current macro-economic indicators and our proprietary credit card data, we believe the consumer will continue to be pressured in 2023, particularly in the first half, and have planned inventory mix and depth of initial buys accordingly.
The update followed news on Wednesday that Macy’s is planning to close four physical stores. Axios reported that the closures are part of the company's transformation strategy, which was first announced in 2020. The mall-based locations include Los Angeles, Fort Collins, Coloardo; Hawaii and Gaithersburg, Maryland.
Bloomingdale’s said earlier in the week that it will open a new small-concept Bloomie’s location in Seattle later this year. Macy’s also introduced a third-party marketplace ahead of the holiday season in a bid to boost its assortment.
Bed Bath and Beyond on bankruptcy watch
Bed Bath & Beyond issued a warning that it is pursuing a number of options to keep itself afloat, and may have to enter bankruptcy.
The home retailer said its leadership “concluded that there is substantial doubt about the Company's ability to continue as a going concern,” according to an update. Some of the potential options include bankruptcy protection, a sale of assets and pursuing additional capital. However, the company said, “These measures may not be successful.”
The company said it is expecting earnings of $1.26 billion for its quarter ended Nov. 30, compared to $1.8 billion for the same period a year ago. Its net loss is expected to be $385.8 million.
Bed Bath & Beyond joined GameStop as a meme stock in early 2021, but has been in the headlines for struggles with its business since then. It replaced CEO Mark Tritton, a former Target exec who was brought into refresh the company, with Sue Gove last year, and overhauled the executive team. In August, it took more than $500 million in new financing in August and said it would close 150 stores.
One recent issue was traced to inventory. Many retailers were working through problems with overstock during the last year as a result of a glut of merchandise wrought by supply chain challenges, but Bed Bath & Beyond reported trouble filling shelves.
“Despite more productive merchandise plans and improved execution, our financial performance was negatively impacted by inventory constraints as we partnered with our suppliers to navigate both micro- and macro- economic challenges,” Gove said in a news release. “Reduced credit limits resulted in lower levels of in-stock presentation within the assortments that our customers expect. Consequently, we have already leveraged the liquidity gained from the holiday season to immediately pursue higher in-stock levels with support from our key vendors. We have seen trends improve when in-stock levels have increased.”
Boxed weighs a sale
Ecommerce platform Boxed is considering options including a potential sale of the company or raising additional capital in the next 45 days, the company wrote on Thursday. The company said it is not planning additional communication “unless and until” there is a deal in place.
The company, which delivers wholesale bulk pantry items to individuals and businesses without requiring a membership, had previously issued a warning from the New York Stock Exchange after its share price fell below $1 in the fall.
Boxed reported that net revenue fell 15% in the third quarter of 2022. This was driven by a decline in software revenue, which comes from enablement technology that the company provides along with its delivery service. Software revenue was $100,000 during the period. The company said it did not see any implementation services or up-front license fee revenue in this category.
The company’s net loss ballooned to $26.4 million, rising more than 4x from about $6 million in the same quarter of 2021. In terms of liquidity, the company had $39.4 million in total cash balance.
Trending in Retail Channels
On the Move has hiring news from Walmart US, Etsy, commercetools and more.
This week, retailers are bringing on C-level talent in areas such as people, operations and transformation. Plus, Kohl’s appoints an activist investor’s choice for CEO, Fanatics taps a former Snap executive for livestream shopping and Etsy brings aboard Facebook’s former general counsel.
Tom Kingsbury was appointed CEO of Kohl’s. Kingsbury was named interim CEO in December upon the resignation of now-Levi’s President Michelle Gass. Now, Kingsbury will have the job on a permanent basis. Kingsbury served as CEO of Burlington Stores from 2008-2019. Kingsbury was nominated by activist investor Macellum Advisors, which was pushing for change at Kohl’s. With Kingsbury’s appointment as CEO, Macellum has agreed to a “multi-year standstill.”
Judy Werthauser was appointed chief people officer at Walmart U.S. Werthauser comes to the teen-focused retailer from Five Below, where she served as EVP and chief experience officer. Over her four-year tenure, the chain grew from about 750 stores to more than 1,300 locations. Werthauser also served on the board of BJ's Wholesale Club, and is now resigning from that position. “I am excited to work alongside the world-class Walmart U.S. team as they bring the purpose of building a better world – helping people live better and renewing the planet while building thriving, resilient communities – to life,” Werthauser wrote in a LinkedIn post.
Mike Brewer was named chief operating officer at Crate & Barrel Holdings, overseeing operations at Crate & Barrel, CB2, Crate & Kids and Hudson Grace. Brewer brings 20 years of experience from Nike, where he served in roles including sourcing, manufacturing and supply chain. Crate & Barrel said Brewer’s appointment was part of the home retailer’s “ongoing efforts to evaluate and alter its structure in ways that help support overall growth.”
Keith Melker. (Courtesy photo)
Keith Melker was appointed chief strategy and transformation officer at JCPenney. Melker comes to the department store retailer from Wehner Multifamily, where he served as CEO. He was also a previous chief strategy officer at the Kimberly-Clark Corporation. Melker will oversee the transformation office, which includes ownership of metrics such as profitable traffic, inventory management, digital growth and strategic partnerships. With this move, Katie Mullen will remain chief strategy officer.
Blaine Trainor is joining ecommerce software provider commercetools as VP of global partnerships and alliances. In the role, Trainor will lead the headless commerce company’s partnerships ecosystem, working with companies including Deloitte, CapGemini, AWS and Google Cloud. Trainor previously served in senior leadership roles at SAP over a 12-year tenure, and also held sales roles at hybris software and Sterling Commerce.
Nick Bell, a former Google and Snap executive, will lead a new livestream shopping division of Fanatics, Footwear News reported. Bell previously led the teams behind Google Search Experience, and served as VP and global head of content and partnerships at Snap Inc. Bell will lead the Fanatics Live division, which will launch a standalone app that is geared toward collectibles.
NIck Bell. (Photo via LinkedIn)
Colin Stretch was appointed chief legal officer at corporate secretary at Etsy, effective Feb. 14. Stretch previously served as general counsel at Facebook from 2013-2019. He then spent two years as leader in residence at Columbia University Law School's Reuben Mark Initiative for Organizational Character & Leadership, and went on to the law firm Latham & Watkins.
"Colin's extensive experience will be critical to Etsy's efforts to ensure we remain a safe and trusted marketplace, broaden our reach across all our brands, and advocate for microbusinesses around the world,” said CEO Josh Silvermann, in a statement.