It’s been another week with far more retail news than there is time in the day. Below, we break down some things you may have missed during the week and what we’re still thinking about.
From HomeGood’s new concept restaurant to Target’s expansion of its luggage private label, here’s our closeout for the week.
What you may have missed
Dollar Tree faces pressured margins due to inflation
Dollar Tree this week reported its consolidated net sales rose 6.1% to $7.32 billion in the first quarter.
Operating income was $419.7 million and operating margin was 5.7%, while the retailer’s net income was $299 million. However, Dollar Tree’s gross profit fell 4.7% to $2.23 billion and its gross margin declined 340 basis points to 30.5%.
“In addition to the historic levels of inflation and labor market challenges, retailers have seen in just the past quarter elevated levels of shrink and even further pressure on the consumer’s willingness to spend on discretionary goods,” CEO Rick Dreiling said, according to an earnings call transcript. “Shrink and the mix shift from discretionary goods have pressured margins throughout retail. We are no exception.”
Dollar Tree tightened its full-year sales guidance and is being more cautious on margins and earnings per share, saying the unfavorable sales mix away from discretionary purchases is likely to normalize over time. Consolidated net sales for fiscal 2023 are now expected to range from $30 billion to $30.5 billion. And the company expects to deliver a low- to mid-single-digit comp store sales increase for the year.
Tuesday Morning intellectual property up for sale
Tuesday Morning’s assets are for sale, including its trademarks, domain names, icustomer database, social media accounts, design patents and related digital content.
Founded in 1974 in Dallas, Tuesday Morning achieved $1 billion in revenue in 2019. But faced with “exceedingly burdensome debt,” the home decor retailer filed for Chapter 11 in February. And a few months later, the company announced it was going out of business following a court-approved bankruptcy sale to Hilco for $32 million.
“The Tuesday Morning brand provides a meaningful opportunity to maintain engagement with its valuable customer base and to reactivate the remainder through new channels such as e-commerce and new product categories,” Hilco Streambank executive vice president David Peress said in an announcement.
Target expands its private label luggage brand
After launching in 2020, Target’s Open Story luggage private label is expanding its offering.
The retailer earlier this week said it has added new luggage options and accessories, most of which are under $30, including a hardside carry-on, packing cubes and a commuter backpack.
“You asked for simple organization solutions, space-maximizing designs, a range of sizes and smart technology, and Open Story has it all, with travel solutions for every budget,” the company said in an announcement.
Target has been successful in its introduction of private labels in recent years, touting several billion-dollar brands, including its activewear brand All in Motion, which reached $1 billion in sales in its first year.
The Open Story brand, however, positions itself as a lower-cost option against DTC players like Away and Monos. While Away has expanded its physical footprint with more stores, reports circulated earlier this year that the DTC brand could be exploring strategic options, including a sale.
Low on date night ideas? How about dinner at HomeGoods?
People will pay for all kinds of novel dining experiences. Whether it’s dining in the dark or eating Christmas dinner at Hogwarts, there’s a market for the unique — and HomeGoods wants in on it.
The off-price retailer this week announced “A Taste of HomeGoods,” a $25 dinner curated by James Beard award-winning Chef Mashama Bailey. For one night only, treasure hunting home goods shoppers in Austin can experience an eight-course meal while touring four different styled spaces. Bailey designed the dinner around HomeGoods’ merchandise selection, according to a statement.
The food experience will take its intrepid explorers through a champagne toast in the “Foyer of Curiosity,” skewered light bites in the “Harmony Lounge,” main courses and wines in the “Library of Discovery,” and a dessert pairing in the “Wanderlust Desert.” While they might seem like episodes of a young adult TV show, each room is actually inspired by an inanimate object, ranging from a “multi-stem ceramic vase” to a “gold metal floor lamp.”
The home goods retailer is offering 30 reservations at both 6PM and 9PM ET for the Wednesday dining experience.
Marvel and Crocs create clogs ready for web-slinging
Ahead of the release of “Spider-Man: Across the Spider-Verse,” Marvel and Crocs have partnered to create a collection of clogs, according to Footwear News. Inspired by Spider-Man, the collection offers three clogs and various Jibbitz charms for each pair. The Ghost Spider Classic Clog, All-Terrain Clog and the Team Spider-Man Echo clogs range from $55 to $80.
The designs feature colors from the classic Spider-Man suit, the Miles Morales suit and comic book series character Spider-Gwen. The shoes include varying features like webbed designs and turbo straps for casual and sports mode. All pairs are set to be available at Foot Locker, Kids Foot Locker, Champs Sports and on Crocs.com, Footwear News said. Crocs’ latest collaboration follows previous shoe releases with Bad Bunny, SZA, Post Malone, and others.
What we’re still thinking about
That’s the price of one of Peloton’s new content membership tiers. The new Peloton App Free tier gives customers access to over 50 classes, while Peloton App One ($12.99 per month) includes thousands of classes plus up to three equipment-based cardio classes, and Peloton App+ ($24 per month) provides unlimited access to Peloton’s library, in addition to thousands of equipment cardio classes.
The new subscription model from the fitness brand was announced Tuesday as part of an effort to position Peloton as “more than a bike company.” The news came alongside a marketing campaign featuring users of all ages and fitness levels utilizing Peloton’s services beyond its equipment hardware.
That’s how much Express recorded in net loss during its first quarter, according to a press release Wednesday. The company’s net loss grew substantially year over year from the nearly $12 million recorded in Q1 2022. Express’ net sales dropped 15% to $383 million while its operating losses ballooned from $9.1 million the year before to $70.1 million. The earnings report comes as Express and WHP Global completed their acquisition of Bonobos from Walmart for $75 million.
What we’re watching
Uniqlo says its Russia business is not for sale
Japanese fast-fashion chain Uniqlo has no plans to divest its business in Russia, according to a notice on owner Fast Retailing’s website. The brand joined others last spring in temporarily shuttering stores following Russia’s attack on Ukraine, though reportedly not until after facing criticism for its decision to keep operating there.
“In March 2022, Fast Retailing temporarily suspended operations in Russia, and that status remains unchanged. With no foreseeable prospects to resume operations, the company has closed some stores,” Fast Retailing said on Wednesday. “The company will continue to monitor the situation closely and make decisions accordingly.”
The Russian trade minister on Tuesday told Russian news daily Izvestia that Uniqlo plans to sell its operations there, following a blueprint established by McDonald’s. About a year ago, the fast food giant sold its Russian portfolio to one of its licensees, who is now operating the restaurants under a new brand. Izvestia’s report on Uniqlo was widely picked up by global news outlets this week.
The fate of Uniqlo’s Russia stores remains uncertain, but the apparel retailer has some concrete plans for its operations elsewhere. In a statement published in March, CEO Tadashi Yanai said the company each year plans to open 30 new stores in North America, 30 in Europe, 100 in the Greater China region, and 70 to 80 in Southeast Asia and Oceania.
In 2015, the brand curtailed a planned expansion into U.S. malls after missing profit goals.
“Our aim is to be the No.1 apparel brand, enjoying the loyal support of customers worldwide,” Yanai said in March.