Baker Retail Rundown

Black Friday drove a record $10.8 billion in US online sales

On Black Friday 2024, U.S. online spending hit a record $10.8 billion, up 10.2% from 2023. Mobile sales accounted for 55% of online purchases, while in-store traffic dropped 3.2%, with a 7% decline in the Midwest. Shoppers turned to mobile and AI tools like ChatGPT for deals, and retailers blending e-commerce, social media, and mobile saw success. Big discounts, especially 30-50% off, drove foot traffic at stores like Forever 21 and Urban Outfitters. Consumers also chased trending products, and Buy-Now, Pay-Later use rose by 8.8%, particularly among Gen Z. Footwear sales increased by 1.3%, while jewelry saw a slight decline. Shoppers were also more willing to splurge on higher-ticket items if the deal was strong.

Macy’s Discovers Employee Hid Millions in Delivery Expenses

Macy's discovered that an employee intentionally misstated up to $154 million in delivery expenses from 2021 through 2024, prompting the company to delay its full quarterly earnings report while it investigates. Although the error did not affect cash flow or vendor payments, it has raised concerns among investors, causing an initial drop in Macy's stock. The company's third-quarter sales fell 2.4%, but luxury brands like Bloomingdale’s and Bluemercury showed growth. Analysts remain cautious as Macy's delayed its full-year guidance, adding uncertainty ahead of the holiday shopping season. The employee responsible has been terminated, and no other involvement has been identified.

Amazon Takes On Temu With New ‘Haul’ Store, Just In Time For Holidays

Amazon is stepping into the ultra-low-cost shopping arena with the beta launch of "Amazon Haul," just as the holiday shopping season hits its stride. Targeting value-conscious shoppers, the new platform offers items priced at $20 or less, with most under $10, and introduces a playful, youth-focused interface complete with emojis and social media-inspired language. This move comes as competitors like Temu and Shein dominate the space, with 56% of Americans reportedly shopping on Chinese marketplaces in the last six months. Leveraging its trusted fulfillment network and A-to-z guarantee, Amazon aims to capture shoppers drawn to both low prices and a "treasure hunt" experience.

How U.S. brands are preparing for proposed tariffs

Proposed tariffs on imported goods from trade partners, such as China and Mexico, presents a challenge for retail brands with extra costs to import anything brands need including raw material and finished goods. Brands like Steve Madden and ELF Beauty are already talking about plans to shift production to other countries or focus efforts on international sales to offset the impact of proposed tariffs. Brands have had to continuously navigate shifting supply chains due to the pandemic and the tariffs makes it difficult for young brands to find alternatives for supply chains. Remaining flexible and being prepared is key as policies and plans for tariffs change. 

Tapestry and Capri Call Off Their Merger

Tapestry, parent of Coach, has officially terminated its deal to acquire Capri Holdings, parent of Michael Kors. After the merger between Capri and Tapestry was blocked by the Federal Trade Commission last month, Tapestry initially indicated that the brand would appeal the ruling. News came recently that Tapestry and Capri agreed to call off their merger. While Tapestry sales rose from Coach, sales at Capri from Michael Kors fell 16% in the recent quarter. Capri is in a difficult position as the company has been managed poorly and neglected their brands in hope that a merger was successful. Capri must work to get back on track for their brands which includes Michael Kors, Versace, and Jimmy Choo.