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 Party City possibly spinning off its balloon business to Oddity delivering a strong second quarter, here’s our closeout for the week.
What you may have missed
Weeks after public market debut, Oddity delivers strongest Q2 to date
Oddity, the parent company of Il Makiage and SpoiledChild, this week reported its second-quarter earnings less than a month after its public market debut.
The company’s net revenue increased 55% year over year to $151.3 million, while gross profit grew 60% to $106.8 million. Net income reached $30 million, compared to $16.6 million in the year-ago period.
“We delivered our strongest second quarter and year-to-date financial results ever, beating our plan on revenue and all key profit metrics, and allowing us to raise our full-year outlook,” Oran Holtzman, Oddity co-founder and CEO, said in a statement.
The company now expects full-year net revenue to be between $475 million and $480 million, compared to previous projections of $453 million. It also expects adjusted EBITDA to be between $96 million and $101 million, from previous estimates of $91 million.
An opening chord across the pond
Guitar retailer Gibson said this week that it plans to open a Gibson Garage in London.
Located just off Oxford Street, the central London location is slated to open in early 2024. It’ll have 4,500 square feet of retail space. Guests will have an opportunity to play more than 300 electric and acoustic guitars from Gibson and products from other music gear brands in the company’s portfolio, like Epiphone, Kramer and Mesa/Boogie. The location will also host live performances.
The company first introduced the experiential retail concept with the opening of the first Gibson Garage in Nashville in 2021.
“As one of the most cosmopolitan cities in the world, London has always been an influential musical ecosystem and became an obvious choice of where to open our next Gibson Garage,” said Cesar Gueikian, Gibson’s president and CEO.
Will Party City spin off its balloon business?
Following its bankruptcy earlier this year, Party City may spin off Anagram, its balloon manufacturing and retailing business. Bloomberg reported this week that the company is in talks with debt holders regarding the potential deal. The Anagram business was excluded from Party City’s Chapter 11 filing in January.
In fiscal year 2021, the retailer made around $92 million from its balloon distribution channel.
Retail therapy
Crocs, Pop-Tarts partner on collab with edible Jibbitz
Crocs alongside its latest collaborator, Pop-Tarts, this week announced the release of Pop-Tarts Croc-Tarts. The limited-edition offering comes with one pair of custom Crocs clogs featuring Pop-Tarts-inspired Jibbitz charms, along with a box of Unfrosted Strawberry Pop-Tarts with Crocs-shaped candy Jibbitz.
"When thinking about bringing these two iconic and beloved brands together, we couldn't help but notice the uncanny similarity of the Crocs shoes and Unfrosted Pop-Tarts,” Pop-Tarts Senior Director of Marketing Heidi Ray said in a statement. “We're excited to unveil our newest snacking twist, an interactive experience where fans can add flavor to both using fun and distinct charms."
The Croc’s shaped gummy candy comes in strawberry and blueberry flavors. The candy also comes with edible glue to decorate unfrosted Pop-Tarts.
Fans can enter for a chance to purchase the Pop-Tart Croc-Tarts Kit via croc-tarts.com. The first drop was Wednesday, with a second on Friday, then additional drops on on Aug. 16 and Aug. 18. Sixty kits will be available during each promotion window, while supplies last.
This Headless Horseman is gourd-geous
As we all know, Halloween season starts on July 5. This year you can celebrate by spending $33 of your hard-earned money on a Headless Horseman fragrance plug from Bath & Body Works.
You will have to separately buy one of the retailer’s Wallflower fragrances so you can actually perform the task the plug-in is made for — i.e. wafting a scent in your living room. However, the big news here is that the jack-o’-lantern head is a projected light that floats over the device. Ichabod Crane would be so pleased.
What we’re still thinking about
$30M
Instant Brands this week received a commitment for an additional $30 million in new term loan financing from its existing lenders. This increased the amount of the term loan credit facility to $162.5 million.
The new term financing, plus its $125 million asset-backed loan financing and cash generated from operations is expected to fund the company’s operations.
Instant Brands — the parent company of Instant Pot, Corelle, Pyrex and CorningWare — filed for Chapter 11 bankruptcy protection in June.
"We are making important progress in our court-supervised process, and the commitment for additional financing reflects our lenders' confidence in our business and our ability to achieve a successful outcome," Ben Gadbois, president and CEO of Instant Brands, said in a statement this week.
$3.5 billion
That’s how much debt clothing company Hanesbrands reported holding at the end of Q2.
And that’s despite reducing its total debt by nearly $100 million last quarter, the company said in an earnings announcement this week. Hanes also reported $1.4 billion in net sales. That’s down $1.5 billion from last year, and net income swung from $92 million in the second quarter to a net loss of $22.4 million for the three months ending July 1.
Activist investors with Barington Capital Group this week sent a letter to the chair of the Hanes board calling for CEO Stephen Bratspies to resign. The company issued a written response to the investors’ letter.
What we’re watching
Student loans about to squeeze some luxury customers too
Tapestry and Capri made a splash this week with the announcement that Tapestry will take over the Michael Kors parent company — also owner of Versace and Jimmy Choo — for $8.5 billion. The move comes amid some softness in luxury sales, especially among U.S. consumers who buy more affordable, entry-level items. BTIG analysts Janine Stichter and Ethan Saghi last month noted that fashion powerhouses LVMH and Kering both reported weaker sales in that geography and demographic.
Add these consumers to the cohort whose budgets are about to be squeezed — just in time for the holidays — as student loans come due. Several analysts have warned about the impact of the Supreme Court’s nixing of President Biden’s student debt forgiveness program, especially among lower- to middle-class households. But higher-income borrowers will also feel the pinch, according to Kristin Bentz, president of KB Advisory Group.
“Student loans are kicking back in, and these consumers — the Michael Kors consumer, the Coach consumer — are going to get hit with an extra $300 or $500 bucks a month,” she said by phone. “With the economy being so dicey, I don't think that there's a lot of demand for these kinds of tweener luxury brands. They're kind of in peril from a demand perspective.”
