The Weekly Closeout: Kohl’s considers packaged foods and Target partners with Tabitha Brown
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 Walmart’s exclusive savings event for subscribers to Gusher’s limited-edition metaverse sneakers, here’s our closeout for the week.
What you may have missed
Nike’s head of diversity is out after 2 years
Felicia Mayo, who was named chief talent, diversity and culture officer in 2020, is reportedly out after only two years. Financial Times first reported the news, which was based on an internal memo.
Mayo succeeded Kellie Leonard, who was named the company’s first vice president and chief diversity officer in 2018, and was in the role for only two years. At the time of her appointment, Nike made the diversity and inclusion position part of its C-suite. Leonard was one of two women Nike promoted in the spring of 2018, following a number of executives who left the company amid allegations of improper conduct and a toxic work environment.
Nike did not immediately respond to Retail Dive’s request for comment.
Walmart to launch savings event exclusive to its subscribers
Walmart announced it would host an exclusive sales event for its Walmart+ subscribers from June 2-5. The three-day event will give members “access to the deepest discounts on thousands of the hottest summer items,” including a Shark vacuum, Minnie Mouse playhouse and a Samsung Galaxy S7, the company said in a press release.
“Our Walmart+ members loved early access to our Black Friday events, so we were inspired to create an entire weekend dedicated to the best deals,” Chris Cracchiolo, senior vice president and general manager at Walmart, said in a statement. “Giving members more of what they want with exclusive, unprecedented Black Friday-like savings allows us to celebrate our members in a fun, new way.”
The mass merchant has tapped Jim Gaffigan, Ken Jeong, Franco Escamilla and Iliza Shlesinger to help promote the event by sharing their favorite deals.
To further drive membership signups, consumers who visit one of the mass merchant’s stores and become a subscriber to Walmart+ will receive $20 off their next purchase.
Lush Cosmetics releases ‘Gay is OK’ soap to support Equality Florida
As LGBTQ Pride Month approaches, Lush Cosmetics has launched a gold and glittery soap bar with the phrase “Gay is OK” on it, according to a press release. The launch is in response to a controversial law passed in Florida, which restricts classroom lessons on gender and sexual identity, which many LGBTQ advocates have labeled the ‘Don’t Say Gay’ bill.
Courtesy of Lush Cosmetics
The bar of soap is available in all Lush Cosmetics stores in Florida and online, with the goal of raising $50,000 for Equality Florida, a civil rights organization dedicated to securing full equality for Florida’s LGBTQ community, per the release.
“At Lush, we believe the state has a responsibility to provide a safe and inclusive learning environment for all children and the Don’t Say Gay legislation does just the opposite. At a time when youth need our support the most, they and those that love them are being targeted,” Carleen Pickard, ethical campaigner at Lush Cosmetics, said in a statement.
Many retailers are announcing new launches and initiatives that benefit specific organizations in anticipation of LGBTQ Pride Month this June. DTC homeware brand Our Place launched a set of rainbow mugs where 20% of net revenue will go toward the Los Angeles LGBT Center’s Pride Pantry. Clothing retailer Levi’s released a collection of Pride apparel and noted they make an annual donation of $100,000 to OutRight Action International. Additionally, 1-800 Flowers.com released 14 curated Pride items, with 20% of net proceeds being donated to GLAAD.
Tabitha Brown makes everything colorful for Target
Target on Tuesday announced it partnered with social media influencer, actress and New York Times bestseller Tabitha Brown on new, limited-time collections.
Courtesy of Target
Tabitha Brown for Target includes four collections that will launch over the next year with products like food, kitchenware, accessories, home and office, apparel and swim. The first one drops on June 11 online and in most stores, and features over 75 apparel, swim and accessories items, with most pieces under $30. Sizes go from XXS to 4X.
Brown has worked with Target on social media content for more than two years.
“Tabitha Brown is known for being a beacon of positivity, making her the perfect partner to help Target continue providing inspirational, inclusive and affordable style for all,” Jill Sando, chief merchandising officer at Target, said in a statement.
Retail Therapy
LoveSac partners with Disney+
As temperatures start to rise, consumers are starting to look for ways to beat the heat this summer. If you’re anything like us, nothing quite compares to escaping to an ice-cold movie theater on a scorching hot day.
And thanks to Disney+, we may not even have to leave our houses to get that movie theater experience.
The streaming service this week announced a partnership with LoveSac, the DTC furniture brand known for its “Sactional” couches.
To help promote LoveSac’s new StealthTech Sound + Charge technology — which features speakers integrated into the product’s frame — the company teamed up with Disney+ to bring the DTC brand’s “product benefits to life in ways only Disney+ can power,” according to a company press release.
The partnership also coincides with Disney’s release of “Chip ‘n Dale: Rescue Rangers.”
“Lovesac StealthTech was designed to bring the movie theater experience into the comfort of our customer’s homes, so we couldn’t be more excited to team up with Disney+ to showcase our immersive, surround sound technology in unison with the premiere of ‘Chip ‘n Dale: Rescue Rangers,’ and future projects, all while offering the best possible viewing experience to families everywhere,” Lovesac founder and CEO Shawn Nelson said in a statement.
Now if only the two could partner with Digiorno for the ultimate movie-viewing experience.
Gushers releases limited-edition sneakers in the metaverse
The taste of a Gushers candy, but for your feet, is finally here. The General Mills gummy candy brand Gushers announced Tuesday that it was releasing a limited-edition sneaker in the metaverse, according to a press release. The virtual sneaker will be available to find during ComplexLand — a virtual shopping experience run by streetwear company Complex — from May 25 to 27.
Courtesy of Gushers
Attendees of the virtual event will be given a special code that can help them unlock the virtual sneaker and put it on their avatar. Those who find a winning code can also get the chance to win the sneakers in real life.
“We wanted to give Gusher fans a new way to express themselves and their creativity with a sneaker that only Gushers could inspire,” said Stephanie Lensing, brand experience manager at General Mills.
The shoe was hand-designed in collaboration with General Mills and the Italy-based design studio RAL7000STUDIO. The unique sneakers have a colorful Gushers gem-shaped mold filled with Gushers liquid on both sides, as well as a removable and transparent Gushers splash patch that’s also filled with Gushers fluid. If you get hungry, consider breaking open the shoes for a treat!
What we’re still thinking about
11.3%
Despite concerns about consumer sentiment, retail sales in the segments tracked by Retail Dive continued their upward climb in April, growing by 11.3% from last year and topping $225.5 billion. E-commerce sales were up 24.1%, even as Adobe found that inflation in online sales finally slowed down during the month.
The average sales figure hides some declines in the industry. Three categories that enjoyed pandemic-era booms fell during April: Sales of furniture and home goods dropped by 0.5%, sporting goods by 5.5% and electronics by 4.1%.
Analysts are bracing for inflation and other macro-level challenges to take a toll on the consumer, which may already be happening. Wells Fargo economists wrote this week that “[i]t is inevitable that when prices grow faster than wages, at some point difficult choices will have to be made.”
$1 billion
That is the size of the haircut Target took on its operating profit from last year. It amounts to a more than 43% decline compared to the first quarter of 2021.
The number, among other things in Target’s earnings, has analysts and the industry spooked as retail enters yet another period of volatility and uncertainty that is utterly unique in its specific agglomeration of challenges.
While the retailer’s sales grew overall, Target customers pulled back spending in some discretionary categories, including electronics, sporting goods, patio furniture and apparel. That helped to sink margins as the retailer opted to mark down slow-selling goods to clear space and refresh stores.
On the other end, Target’s costs spiked sharply, with rising fuel prices exacerbating already-steep costs in its supply chain. The retailer’s chief operating office said that it saw hundreds of millions of dollars in freight and transportation costs that were above already-high expectations.
Much of this tracks with Walmart’s disappointing Q1 as well. Together, the retail giants revealed a consumer that is reacting to rising gas and food prices, while the retailer’s own costs rise faster than they can pass them on to consumers. Both Walmart and Target might also be absorbing some inflation in their own cost base to take market share from rivals.
What we’re watching
In hunt for market share, Kohl’s mulls pet, grocery categories
Kohl’s originally launched as a Milwaukee-area grocery chain, but the company pivoted away from that business long ago. Now the department store, whose sales, margins and profits all took major hits in the first quarter, may return to it, at least to some extent.
In an effort to expand its market share, Kohl’s is looking to enter new categories, CEO Michelle Gass told analysts on Thursday. That could include the thriving pet market and even gourmet foods, she said.
“We are not intending to ever be like a grocer per se — or well, never say never — but … you see retailers who do offer more of that packaged food, and that’s an area we are looking at, too,” she said.
Gass may be looking longingly at Walmart and Target. Both got squeezed in their first quarters, too, but enjoyed healthier topline numbers in part thanks to their grocery sales.
About a decade ago, Sears had the same idea, according to retail consultant Brian Kelly, who worked with Sears at the time. That now nearly defunct department store opened off-mall locations dubbed “Sears Grand.” The stores also had in-store food service and featured the kind of “racetrack” layout common to Kohl’s, Kelly said by email.
“The logic was being a one-stop shop,” he said. “But it was a dismal failure and accelerated the end.”