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March 2026 | Newsletter No. 32
Baker Retail Rundown
Stay in the know with monthly retail challenges and our rundown of top retail industry news, curated by our talented Penn student analysts.
For nearly two decades, Walmart held the title of the United State’s largest company by revenue – often referring to itself as a “Fortune 1” company. But this February, Amazon, roughly half the age of Walmart, crowned itself the new Fortune 1, officially surpassing Walmart’s annual revenue by ~$3 billion. Amazon, having grown from an online bookseller started in Jeff Bezos’ garage to a behemoth dominating in cloud computing, artificial intelligence and entertainment to online sale, is simply growing at a faster rate. The company expanded 12.4% last year compared with Walmart’s 4.7%, delivered its fastest speeds in 2025 as 100 million people ordered items for same-day delivery, injected cash into new high-ticket categories such as luxury handbags and even cars, and also earned much of its profit from non-retail operations (cloud computing, advertising, and fees from third-party sellers). Meanwhile, Walmart gets the bulk of its sales and profits from U.S. stores. The transition is already showing up in internal adjustments, with Walmart reportedly removing mentions of its “Fortune 1” status from job postings.
After years of blockbuster price inflation that pushed Dior and Chanel’s prices far ahead of other luxury retailers (+51% and +59% price hikes for the two French houses, as opposed to only +36% industry averages), analysts say that the generic formula for luxury growth is coming to a noticeable shift. This year, luxury sales momentum is expected to be driven by volume, not further price increases. That pivot, undoubtedly driven by larger macro-economic circumstances, helps to explain why Chanel and Dior are quietly recalibrating their entry level offerings: while prices for core handbags remain firmly intact, both luxury brands appear to be increasing their proportion of offerings under €4,000 (handbags, small leather goods and fashion jewellery) by more than 15 percent each. Chanel’s Spring/Summer 2026 pre-collection highlights sub-€5,000 handbags, adding styles such as the Small Flap, while Dior’s Spring/Summer 2026 collection follows a similar playbook, with items priced under €1,000 — including wristlets, card holders and toiletry bags — up 27 percent compared to the same season in 2023. These lower-priced items — from bag charms and brooches to ballet flats, scarves and sneakers — are designed to slip just beneath key consumer psychological thresholds, pulling aspirational shoppers into smaller purchases that feel like more manageable investments.
Etsy is selling U.K.-based resale platform Depop to eBay for about $1.2 billion in cash, less than the $1.6 billion it paid for the company nearly five years ago. While the price appears discounted, analysts say that the deal will be highly accretive for eBay, which can better take advantage of operational synergies and support Depop more effectively with technology, investment, and infrastructure. As part of eBay, Depop sellers and buyers will gain access to the company’s financial services, shipping capabilities, and cross-border trade infrastructure. Meanwhile, eBay is poised to benefit significantly from a new growth vector, helping to satisfy investors and compete more effectively in the fast-growing secondhand apparel market. Depop – popular with Gen Z and millennial shoppers and now generating most of its sales in the U.S. – saw U.S. sales grow 60% last year. So why divest the platform now? Etsy CFO Lanny Baker explains that the move allows Etsy to refocus on its core marketplace, with cash proceeds expected to go toward general corporate purposes, share repurchases, and further investment in the Etsy platform.
L’Oréal struck a deal last year to take over Gucci’s beauty license beginning in 2028, the rights of which are currently held by smaller cosmetics firm Coty until 2028. However, the French beauty giant is eager to accelerate that timeline. Discussions are ongoing between L’Oréal, Gucci owner Kering, and Coty about a potential early transfer. According to a source, Kering had offered to buy out Coty instead of finalizing its agreement with L'Oreal, but Coty refused. This allegedly came after Coty’s Swiss subsidiary, HFC Prestige International Operations Switzerland, filed a lawsuit in the UK against Gucci last year. While Gucci is certainly one of the world's best-known luxury houses, analysts say its beauty operations are under-developed relative to its fashion business. In October, Kering sold its beauty division — built around high-end fragrance brand Creed — to L’Oréal for €4 billion ($4.75 billion). While L’Oréal’s primary target was Gucci’s beauty license, the deal was conditional on Creed coming with the package, especially as Kering moved to offload assets it no longer considered core. Whether L’Oréal can bring Gucci Beauty into its portfolio ahead of 2028 remains an open question — and a high-stakes negotiation between the three powerful companies.
While Claire's was once a rite of passage, the place where young girls begged to get their first pair of sparkly hoops and their ears pierced, the brand has lost momentum in recent years. Now, a seasoned retail veteran – who had her own ears pierced at Claire’s at age eight – is stepping in to revitalize the brand. Michelle Goad, expert in youth marketing, former leader of Gen Z digital innovation at Nike, and former Chief Digital Officer at Athleta, is coming in as CMO after Ames Watson, a private holding company, acquired Claires for $140 million last August. Goad — who oversees Claire’s marketing, retail experience and design, and product creation — wants to reposition Claire’s to once again be a “life moment retail destination.” As ultra-low-cost players like Shein and Tenu take over the low-priced accessory/trinket market, Goad is betting on something competitors can’t replicate online: the IRL piercing experience. While much will change, some hallmarks will remain at Claire’s: its logo, its purple aesthetic, and most importantly, its enduring celebration for girlhood.
February Challenge Winner
Merchandising in the Physical/Digital World
Given the shift to 'phygital' customer journeys, how must merchandising strategies be adapted to seamlessly present the product across both physical and digital channels?
Ria Kokkengada
"Merchandising should prioritize store design as content hubs, using experiential, photo-ready pop-ups to turn in-store moments into shareable digital content for organic consumer-to-consumer growth."
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