FROM THE DESK OF DEBORAH WEINSWIG

Prestige Beauty Opportunity Heats Up Between Kohl’s, Target and Walmart This week, Walmart announced a collaboration with UK retailer Space NK to bring prestige beauty products first to Walmart.com and then to nearly 250 of its physical stores in summer 2022. The BeautySpace NK collaboration combines the benefits of Walmart’s size and scale with Space NK’s high-quality assortment. Space NK was founded in 1991, selling fresh smoothies and independent fashion and beauty labels, and has since evolved to focus on selling “the very best of beauty.” The retailer currently operates 72 stores, including 29 in the US. Space NK has curated a collection of products for the Walmart customer, including bath and body, haircare, makeup and skincare products at a variety of price points. The collection will be available on Walmart.com on March 15, 2022, offering 600 products and 15 brands, with more to become available throughout the year. Significant prestige brands offered include Foreo and Mario Badescu. Existing retailer collaborations in the prestige beauty space, including Sephora at Kohl’s and Ulta Beauty at Target, also saw positive announcements this week. In its investor meeting on March 7, Kohl’s announced that it had opened 200 Sephora shops inside its stores so far, with plans to open a total of 850 shop-in-shop locations through 2023 and grow its Sephora business to hit $2 billion in revenue. According to the company, adding prestige Sephora products enables it to offer an elevated experience, attract a new base of younger customers and confer a “halo effect” to the entire business, which will help scale the entire Kohl’s chain. The first 200 stores offered a mid-single-digit sales lift, with 25% of Sephora customers new to Kohl’s and 50% of customers cross-shopping, according to the company. In addition, Sephora and Kohl’s are trialing a service to enable orders placed on Sephora’s e-commerce site to be collected at a Kohl’s store; Sephora has a significant online business, so offering this option is positive for Kohl’s in terms of driving additional store traffic. The success of Target’s partnership with Ulta Beauty is also driving future expansion. Target recently announced plans to expand its network of 100 Ulta Beauty shop-in-shop locations opened in 2021 by more than 250 stores this year—another step toward its ultimate target of 800 Ulta Beauty at Target stores. The spaces span approximately 1,000 square feet, making them smaller than the Sephora shop-in-shop spaces at Kohl’s, which cover 2,500 square feet. Target reported in its fourth-quarter earnings call on March 1 that its sales per square foot were strong, guest engagement was impressive and that the company is extremely optimistic about the partnership’s future. Interestingly, Sephora announced on March 9 that it is partnering with Shipt (which was acquired by Target in 2017) to offer same-day shipping in as little as one hour, adding nearly 500 locations in US cities. Sephora Beauty Insider members will also be able to return their purchases using Shipt. The agreement also features exclusive beauty, skincare and haircare products in partnership with hairstylist and TV personality Jonathan Van Ness. Previous similar partnerships include Sephora and Instacart, and Lush and DoorDash. Walmart jumping into the prestige beauty fray adds validation to the mass merchandiser-beauty specialty retailer concept, as also demonstrated by the expansion announcements by Kohl’s and Target. This move marks a foray into additional categories that leverage Walmart’s platform and offer a win-win situation for both retailers.

US RETAIL AND TECH HEADLINES

Dick’s Sporting Goods Reports Strong Fourth-Quarter Revenue Growth; Issues Negative EPS Guidance for 2022 (March 8) Company press release

• Apparel and footwear specialty retailer Dick’s Sporting Goods reported year-over-year revenue growth of 7.3% in its fiscal 2021 fourth quarter, ended January 29, 2022. Comparable sales increased by 5.9% year over year and adjusted EPS increased by 49.8%.
• For the full-year 2022, Dick’s Sporting Goods expects its adjusted EPS to be down 16.6%–25.5% year over year and comp sales to be down 4.0% to flat year over year. It plans to spend $400–425 million in capital expenditure on a gross basis in 2022, increasing from $308 million in 2021.

Lululemon Launches Its First Footwear Product (March 8) ChainStoreAge.com

• Apparel specialty retailer Lululemon has forayed into sports footwear for the first time with the launch of its women’s running shoe, Blissfeel. The shoe will be available online and in select stores across China, North America and the UK from March 22. Lululemon also unveiled three more women’s collections: Chargefeel, Restfeel and Strongfeel, which will be released through the course of 2022.
• The company also announced plans to launch a men’s footwear collection in 2023, alongside seasonal collections and special-edition shoes, as Lululemon continues to expand its footwear category.

Petco Reports Robust Sales Growth in Its Fourth Quarter; Issues Strong Sales Guidance (March 8) Company press release

• Petcare retailer Petco reported year-over-year net sales growth of 13.0% in its fiscal 2021 fourth quarter, ended January 29, 2022. Comparable sales increased by 14.0% year over year and adjusted EPS increased by 65.0%.
• The company’s gross margin decreased by 59 basis points year over year to 42.0%, due to higher supply chain costs. For the full year 2022, the company expects mid- to high-single-digit sales growth year over year and EBITDA growth in the high single digits. It expects adjusted EPS growth of 6.6%–9.9% year over year.

Ross Stores To Open 100 New Stores in 2022 (March 7) Company press release

• Off-price retailer Ross Stores has opened 22 Ross locations and eight dd’s Discounts stores in 15 states and Guam in February and March 2022. The new stores are part of the company’s plan to open 100 new stores this year comprising 75 Ross stores and 25 dd’s Discounts locations.
• The company’s Vice President, Gregg McGillis, stated, “Our return to stronger unit growth in 2022 reflects our belief that Ross can ultimately grow to 2,900 locations and dd’s Discounts can become a chain of 700 stores given consumers’ ongoing focus on value and convenience. Our continued expansion of both chains also demonstrates our commitment to further building our presence in both existing and newer markets.”

EUROPE RETAIL AND TECH HEADLINES

Carrefour Partners with Electra Consumer Products To Enter Israel (March 7) ESMMagazine.com

• French supermarket and retail chain Carrefour has partnered with Electra Consumer Products, an Israel-based manufacturer of multicategory products, to expand its international footprint. The partnership is a franchise agreement—Electra Consumer Products and its subsidiary Yenot Bitan will open stores under the Carrefour banner in Israel by the end of 2022.
• The partnership will also offer Yenot Bitan access to Carrefour brands by summer 2022. Yenot Bitan currently operates over 150 stores in Israel.

Duty-Free Retailer Dufry Announces Plans To Reopen 90% of Its Sales Network (March 8) UK.FashionNetwork.com

• Switzerland-based duty-free retailer Dufry will reopen 90% of its sales network by April 2022, following a rebound in worldwide travel after pandemic-driven declines.
• Dufry operates more than 2,300 stores across airports, cruise liners, seaports and other tourist destinations. The company stated that its business has picked up following a travel peak in the Americas and Europe, Middle East and Africa (EMEA) markets, which each account for about 45% of its sales.

Marks & Spencer Invests in Online Activewear Business The Sports Edit (March 8) RetailGazette.co.uk

• British apparel retailer Marks & Spencer has invested in activewear online retailer The Sports Edit, with a deal that will eventually give the retailer a 100% ownership stake. While The Sports Edit will continue to run the business independently, Marks & Spencer’s International Director, Paul Friston, will join its Board.
• The company stated that The Sports Edit is “a complementary e-commerce platform that is well positioned in the growing activewear market, in part due to its highly engaged customer base.”

Puma Collaborates with Liberty To Launch Sportswear Collection (March 7) UK.FashionNetwork.com

• German sportswear company Puma will launch a streetwear collection with UK department store Liberty that is “defined by female empowerment,” according to the companies. The collection features a range of Puma sneakers in classic Liberty floral prints, among other items.
• The collection is available on Puma.com, across Puma stores and at select retailers including Liberty’s flagship store off London’s Regent Street. Prices for the collection range from £55 (around $72) to £240 ($316).

Ted Baker Partners with BigCommerce on New Website Launch (March 8) ChargedRetail.co.uk

• British high-street clothing retailer Ted Baker has partnered with e-commerce platform BigCommerce to launch a new website. Ted Baker’s customers are able to purchase products online using their preferred currency and in a range of languages, including English, French, German and Spanish.
• Ted Baker’s Chief Information Officer, Leon Shepherd, stated that “Central to Ted Baker’s future-looking growth strategy is adopting a digital-first approach that supports our endeavor to offer a premier shopping experience for our customers and build brand awareness beyond Europe.”

ASIA RETAIL AND TECH HEADLINES

CityMall Raises $75 million in Series C Funding Round (March 7) Inc42.com

• India-based social commerce platform CityMall has raised $75 million (₹574 million) in a Series C funding round, led by new investors Citius VC and Norwest Venture Partners. Existing investors, including Accel India, Elevation Capital, Jungle Ventures, General Catalysts and WestBridge Ventures also participated.
• CityMall sells lifestyle products, groceries and other items through a network of community resellers in Tier 2 and Tier 3 cities. The company raised $11 million in Series A funding in March 2021 and $22.5 million in a Series B round in June 2021.

Deliveroo Hong Kong Invests $2.5 Million in Plastic-Free Packaging (March 8) RetailNews.asia

• Deliveroo Hong Kong, a subsidiary of the UK-based delivery platform Deliveroo, is taking steps to reduce the food packaging waste created by its restaurant partners. The company is investing HK$2 million ($2.5 million) to encourage restaurants to adopt plastic-free packaging for their delivery orders, in partnership with zero-waste company Sustainabl.
• Through the partnership, Deliveroo will allow businesses to purchase recyclable food containers at a reduced price—independent restaurants and small food and beverage providers will receive a 50% discount on packaging prices, while large chains will be given a 30% discount. The discounts will be available during the first six months of the initiative.

Douyin E-Commerce Unveils Douke To Bolster User Traffic (March 8) PanDaily.com

• Douyin E-Commerce, the online retail arm of TikTok, has begun testing a new tool called Douke, aiming to drive more visitors to the platform’s live shopping channels. Douke will create a commodity library on the platform for Douyin’s key opinion leaders and merchants.
• According to the company, Douke is designed to generate interest through various channels outside Douyin, using the platform’s codes and pictures. After users select a live shopping channel, the platform will suggest related connections, taking a commission on transactions.

Flipkart Enters Strategic Collaboration with Google Cloud To Improve Innovation (March 7) RetailNews.asia

• Walmart-owned Indian e-commerce firm Flipkart has announced a multi-year strategic partnership with Google Cloud to help accelerate its innovation and cloud strategy. The collaboration aims to take Flipkart into its next growth phase and meet its target of bringing 200 million more buyers and thousands more sellers on board, according to the company.
• Flipkart also aims to accelerate the pace of new product development using Google Cloud—allowing the company to expand further into Tier 2 and Tier 3 markets in India, as well as providing solid app access and performance, even during peak purchasing seasons when user traffic is high.

Grab Tests Live Shopping Service with BeLive (March 8) TechinAsia.com

• Singapore-based food delivery and payment service provider Grab is testing a live shopping function, in partnership with BeLive Technology, a livestreaming service provider company located in Singapore. The trial, dubbed “Grab Live Beta,” allows merchants on Grab’s network to interact with customers in real time.
• Grab Live Beta is now accessible in Thailand and Vietnam. It features a chat function, alongside a virtual gifting tool that allows users to support content creators and influencers.