Baker Retail Rundown

Consumer Spending Surges Again and Keeps U.S. Economy in Overdrive

Holiday shopping gave the US economy a major boost, with consumer spending surging 0.7% in December and capping off a strong year. The fourth quarter rose 4.2% in spending, the fastest in nearly two years, driven by necessities like rent and discretionary purchases like clothing. However, spending outpaced the growth of savings with that rate dropping to 3.8%.While this consumer strength keeps the economy resilient, it also means the Federal Reserve is unlikely to cut interest rates soon, keeping borrowing costs high. Looking ahead, economists can expect households to slow spending in early 2025.

Trade Trends: Tariff Tension and the Rise of the Global South

The global south is experiencing a significant shift, with countries like Asia, Africa, and Latin America gaining more influence in global trade, specifically in textiles and apparel. As tension rises between the US and China, nations like India, Indonesia, Brazil, Egypt, and Ethiopia are emerging as key players in the global economy. According to Kearney’s report, the collective growth of these “middle powers” gives them increasing sway over international markets. Experts suggest that these nations are reaching a critical moment of influence, driven by a convergence of economic, political and global shifts.

Secondhand E-commerce Platforms Transition to Physical Retail 

Fashionphile, the RealReal, Rebag, and other digitally native platforms offering millions of dollars’ worth of second-hand luxury items—such as Birkins, Rolexes, other goods— are making significant investments in the creation of their own physical stores as well as selling wholesale to other retailers such as Saks Off Fifth. In 2025, Fashionphile has announced plans to launch new brick-and-mortar locations in cities like San Francisco, Dallas, Philadelphia, and more. Of the 14 planned outposts, some will offer luxury shoppers the unique option to trade in their secondhand pieces for cash. Similarly, The RealReal is expanding its footprint in Houston and Miami, Rebag has introduced shop-in-shop concepts within Bloomingdale locations, and Mercari ventured into brick and mortar with a dedicated storefront in LA.  As these platforms embrace more traditional retail strategies, one has to wonder: Is the future of luxury resale e-commerce a return to brick-and-mortar roots? 

Prada and Private Equity Bidders Consider Versace Acquisition

Prada is among the potential suitors exploring a bid for luxury fashion house Versace, which has been put up for sale by its parent company, Capri Holdings. Capri is assessing strategic options, including the sale of Versace and Jimmy Choo, as it grapples with declining sales and weakened investor confidence due to reduced spending in the wealthy Chinese market. Versace’s operating margin had declined over 10%, and Capri has been forced to consider divestitures after Tapestry - the parent company of Coach - abandoned its proposed $8.5 billion acquisition of the company. As part of its evaluation, Prada has enlisted Citigroup to assess a potential bid. Despite a broader industry slowdown, Prada has defied trends, reporting an 18% increase in sales. However, Prada has had an ‘unsuccessful’ past in Mergers & Acquisitions, and CEO Andrea Guerra has previously stated that the company is focused on strengthening its existing portfolio rather than pursuing large-scale acquisitions. Given these factors, the likelihood of Prada following through with a bid remains uncertain.