Marketplaces news, including Amazon, eBay, Tmall, Alibaba

Mexican antitrust commission: Amazon, Mercado Libre hinder effective competition

Abbas Haleem — Thu, 15 Feb 2024 21:48:25 +0000

Amazon and Mercardo Libre both face regulatory scrutiny, following the release of new findings in Mexico.

A report from the Federal Economic Competition Commission (COFECE) — an agency in the Mexican government responsible for regulating anti-competitive behavior — found that Amazon and Mercado Libre control too much of the ecommerce market’s sales and transactions in the country, impeding new merchants from successfully entering the market.

Amazon and Mercado Libre are the largest online marketplaces in Mexico. Together, the report says, they control more than 85% of online marketplace sales and transactions in the country.

“We are aware of this preliminary report and are closely collaborating with COFECE,” Amazon said in a statement.

Mercado Libre issued a statement saying it was analyzing COFECE’s preliminary report, which the marketplace described as the start of the process. It also pledged its cooperation.

Amazon.com Inc. is No. 3 in the Global Marketplaces Database. MercadoLibre Inc. is No. 8. The Digital Commerce 360’s database ranks the largest online marketplaces around the world based on third-party gross merchandise value (GMV).

Amazon, Mercado Libre investigated in antitrust report

“There are no conditions of effective competition in the marketplace service market for sellers,” according to a translation of the preliminary opinion in the COFECE antitrust report. The report cites an investigation the commission held from March 31, 2023, to Oct. 27, 2023.

The report found that in Mexico, Amazon and Mercado Libre also:

Have the ability to set prices
Create barriers to entry into the market
Exert significant competitive pressure over smaller competitors

It says although there are some competitors in the market, most of them are much smaller in size compared to Amazon and Mercado Libre. As such, the smaller competitors’ ability to exert competitive pressure is not significant, the regulator asserted. Additionally, it states that Amazon and Mercado Libre are the only competitors that have systems for collecting and processing large volumes of data. Those systems allow the companies to offer sellers various tools within their platforms. The tools then incentivize sellers to remain on the marketplaces. That ensures a sufficient number of users to generate and maintain industry effects, according to the report.

COFECE report proposes corrective measures

Among the barriers to competition cited, COFECE identified that Amazon and Mercado Libre artificially influence buyer behavior by offering streaming services in their loyalty programs. As a corrective measure, COFECE proposes the marketplaces dissociate streaming services from their memberships and loyalty programs.

Another barrier to competition is the lack of transparency in offer management. It asserts that Amazon and Mercado Libre’s marketplaces use algorithms to manage offers. The regulator is concerned that a lack of transparency in that process could undermine efficient market functioning.

“COFECE also orders Amazon and Mercado Libre to take all necessary and sufficient actions to ensure that sellers can find comprehensive information about the variables and weighting factors they consider in selecting the featured offer,” according to a Mexico Business News report on the COFECE findings and corrective measures.

Also at issue is the idea that a preference for proprietary logistics solutions creates a third obstacle for market competitors.

“Amazon and Mercado Libre give preferential treatment to products from sellers who use their fulfillment services,” the report said, according to Mexico Business News.

“A seller would be unable to hire a single company that offers fulfillment in a comprehensive manner, and from there participate in various sales channels,” the report said.

As a solution, COFECE proposes that the marketplaces modify the criteria for the “Prime” and “Full” labels on products eligible for delivery using the marketplaces’ fulfillment networks. It suggests modifying the criteria so the labels are not exclusively or preferentially assigned to sellers who use the marketplaces’ fulfillment services.

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Away will lay off 25% of staff

Mary Meisenzahl — Thu, 15 Feb 2024 18:36:10 +0000

Away said layoffs will impact 25% of its internal staff, Retail Dive first reported Feb. 14. The retailer did not share how many total employees it has.

The direct-to-consumer luggage brand is undergoing a larger restructuring that also includes “the elimination of a traditional executive team structure,” according to a statement shared with Retail Dive.

Staffing changes were made because “the team recognizes the need for a more nimble approach amidst the changing consumer landscape,” according to the statement.

“We’re reconfiguring the traditional exec team structure in order to promote better decision-making,” CEO Jen Rubio told Inc. “What I think this is doing is setting us up to be able to grow the right teams to work on the right projects.”

“Disruption has always been at the core of our company’s DNA,” the spokesperson said in a statement. “Away is dedicated to delivering the highest-quality travel products and experiences to our customers, and we believe that these steps will better position us to continue to be an innovative leader in the category.”

Away is No. 391 in the Top 1000, Digital Commerce 360’s ranking of North America’s leading retailers by online sales.

Changes at Away

Away held an earlier round of layoffs in May 2023. At the time, it cut 22 employees, including chief commercial officer Laura Willensky.

In 2023, the retailer also expanded its executive team. It hired Carissa Barrett as vice president of retail. She previously worked at Byredo, Saint Laurent, and Prada (No. 187 in Digital Commerce 360’s Europe Database). At the same time, Away hired Amanda Brody as vice president of brand. Brody previously worked at L’Oreal (No. 17 in Europe) and Charlotte Tilbury.

In January 2023, Away brought on Carla Dunham as chief marketing officer with a mandate to increase marketing spending and capitalize on post-pandemic travel.

Away may have grown its executive team too quickly, Rubio told Inc.

“I was really proud that Away was able to attract people with such impressive accolades and such great experience,” she said. “Maybe I was in a little bit of a rush to have the company grow up so quickly, and in the midst of that, we lost a little bit of the magic that got us here.”

Away’s possible sale

Away was exploring a potential sale in 2023, Bloomberg reported.

Rubio told Inc. that’s not the plan for 2024. However, “there has to be some plan on the horizon” for an IPO or acquisition eventually, she said.

This year, Away will focus on increasing the number of product launches and working with retailers on wholesale, according to Rubio.

Other online retail and ecommerce layoffs

Away joins other retailers and marketplaces in announcing recent layoffs. EBay plans to lay off 1,000 workers, 9% of its total workforce. EBay ranks No. 6 in Digital Commerce 360’s Global Online Marketplaces database. The database ranks the 100 largest such marketplaces by third-party GMV.

Macy’s, Amazon, and Wayfair also all cut their workforces in the first month of 2024. In addition, REI announced that it would lay off 357 employees, about 2.2% of the retailer’s total workforce, The Seattle Times reported.

Macy’s ranks No. 17 in the 2023 Digital Commerce 360 Top 1000. Amazon ranks No. 1, Wayfair ranks No. 10, and REI ranks No. 67.

Levi Strauss (No. 191) also said it would lay off 10% to 15% of its corporate workforce, and Estee Lauder (No. 43) will lay off 3% to 5%.

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Wish to be acquired by Qoo10 for 1% of marketplace’s previous value

Brian Warmoth — Wed, 14 Feb 2024 19:53:54 +0000

San Francisco-based ContextLogic announced it reached a deal to sell its online marketplace Wish for $173 million. The transaction will see Wish acquired by the Singapore-headquartered ecommerce platform Qoo10 at a 99% markdown from the publicly traded company’s market cap in 2021.

ContextLogic will drop its current ticker symbol WISH within 30 days of the deal closing, according to its announcement. The acquisition price of $6.50 per share, however, will give investors a 44% premium on where the stock traded before the Monday announcement.

Wish.com is No. 25 in Digital Commerce 360′ Global Online Marketplaces Database. The database ranks the 100 largest such marketplaces by 2023 third-party gross merchandise value (GMV).

What Wish being acquired by Qoo10 means for its future

“Integrating the Wish platform into Qoo10 will create a true global cross-border ecommerce platform to support the massive market demand,” said Joe Yan, the CEO at ContextLogic. “Upon close, we expect the new Wish platform will have an improved customer experience through increased product assortment and merchant selection. And for our merchants, we will be able to offer fully integrated logistical capabilities to deliver unmatched cost-efficient services with high quality control and transparency.”

The acquisition also provides an end to Wish’s ongoing losses under ContextLogic. The company announced in November that it was exploring “a range of strategic alternatives to maximize shareholder value” at the end of third quarter when negative cashflow reached $86 million.

Who are Qoo10’s competitors?

By adding Wish to its portfolio, Qoo10 will push into a competitive discount space in online retail. There, Temu and Shein are aggressively pursuing expansion. Temu, for instance, likely spent tens of millions of dollars on Super Bowl ads, in 2024. In addition, it may have as much as $3 billion being readied for its total annual marketing budget.

“Wish has innovative technology that provides highly entertaining, personalized shopping experiences for its users while serving as one of the largest global ecommerce platforms,” said Young Bae Ku, the CEO and founder of Qoo10. “By combining our operating expertise and Wish’s technology and data science capabilities, we expect to drive greater success for merchants while providing an even greater marketplace for consumers globally.”

As Qoo10 eyes its own international expansion, it will look to leverage Wish’s existing reach and business.

“With the acquisition of Wish, Qoo10 and Wish will offer a comprehensive platform for merchants, sellers, buyers, and customers globally to realize the potential of a truly global marketplace,” Ku said. “With the strong commitment from Wish’s employees and staff combined with the Qoo10 family group of companies, we are well positioned to realize our long-stated goal of being a leading cross-border, ecommerce marketplace.”

Closing date for Qoo10’s Wish acquisition

ContextLogic anticipates a second-quarter closing for the deal in 2024 to finalize Wish being acquired. It will face a shareholder vote and other conditions before that can happen.

“The Board conducted a thorough review of strategic alternatives with the assistance of outside financial and legal advisors,” said Tanzeen Syed, chairman of the board at ContextLogic. “We evaluated a variety of potential outcomes and determined that the proposed sale of our operating assets and liabilities, while preserving significant NOLs, represents the best path forward to maximize value for shareholders. We also believe there is a significant upside potential to obtaining a long-term aligned capital partner that would support future value creation.”

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Kroger adds AI to its marketplace

Mary Meisenzahl — Tue, 13 Feb 2024 21:08:37 +0000

Kroger Co. is adding new artificial intelligence (AI) capabilities for sellers to its online marketplace. The grocery retailer will partner with retail analytics firm Intelligence Node on the new technology, it announced Feb. 8.

AI will give Kroger customers a better experience through clearer and more informative product listings, the grocer said in a press release. Meanwhile, third-party sellers on the marketplace will be able to use AI for content management and copy optimizations to improve Search Engine Results Pages (SERPs).

“The Kroger Marketplace involves a complex matrix of elements that need to be effectively managed to deliver a seamless customer experience online,” Michael Murphy, group vice president of analytics and execution at Kroger, said in a statement. “From product copy and ratings to reviews and taxonomy, customers are searching out more information than ever before and providing what they need, when they need it is important. We look forward to working with Intelligence Node to deliver an amazing customer experience while empowering our sellers to improve their business performance.”

Kroger ranks No. 8 in the Top 1000, Digital Commerce 360’s ranking of North America’s leading retailers by online sales.

Integrating AI with Kroger’s other tech providers

Intelligence Node’s technology will work with Mirakl, which provides the platform for Kroger’s marketplace.

“We look forward to supporting Kroger’s growth plans with our ability to provide content audit, optimization, and execution directly within the Mirakl platform to help improve shopper conversion and seller recruitment and retention,” Intelligence Node cofounder and CEO Sanjeev Sularia said.

Mirakl also provides ecommerce platforms for Best Buy, Macy’s and Saks Fifth Avenue.

Best Buy, Macy’s and Saks rank No. 7, No. 17 and No. 28, respectively.

Kroger online marketplace

Kroger launched its marketplace in 2020 as a bid to compete with Amazon and Walmart.

Walmart ranks No. 2 in the Top 1000. Amazon ranks No. 1 in the Top 1000. Walmart is also No. 9 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the top 100 online marketplaces. Amazon is No. 3 in marketplaces. Kroger does not rank in the marketplace database.

Kroger’s marketplace began as an extension of Kroger Ship, launched in 2018. Kroger Ship is an ecommerce platform for non-perishable grocery items from third-party sellers. The marketplace added an additional 50,000 items. Those were mostly non-grocery products across categories including specialty items, toys and housewares.

The online grocery retailer has reported digital sales growth for several quarters in a row. Most recently in its third fiscal quarter of 2023 ended Nov. 4, Kroger digital sales grew 11% year over year. Delivery sales grew 11% over the same period. Digital engaged households grew 13%, Kroger said.

Kroger chief financial officer Rodney Millerchip called digital sales a “growth engine” for the grocery retailer. “Everything we continue to see gives us that belief it will continue to be an opportunity to drive deeper customer engagement and growth,” he told investors in November.

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Why Temu spends millions on Super Bowl commercials

Mary Meisenzahl — Mon, 12 Feb 2024 21:52:56 +0000

Growing ecommerce app Temu spent big on Super Bowl commercials this year.

The Chinese app bought air time for three commercials during the game and two after. Super Bowl advertising is some of the most expensive of the year. For Super Bowl LVIII, advertisers paid between $6.5 million and $7 million for a 30-second commercial, CNN reported. Individual rates vary, however, depending on when an ad airs during the game and if an individual advertiser purchases multiple commercial spots. A Temu spokesperson declined to comment on how much the retailer spent.

Temu’s Super Bowl commercial featured the tagline “Shop like a billionaire.” In it, the animated protagonist buys a variety of household and apparel products priced under $10. The purchases are a sampling of the low-cost products Temu has become known for. The retailer also partnered with San Francisco 49ers running back Christian McCaffrey to promote $5 million in coupons and credits on Instagram ahead of the game, and an additional $10 million during the game, the spokesperson said.

Pinduoduo owns Temu, which launched in 2022 and isn’t yet reflected in Digital Commerce 360 rankings of the largest online retailers. Pinduoduo operates an app-only marketplace for Chinese consumers. Because it doesn’t operate an ecommerce website, it is not included in Digital Commerce 360’s Asia Database.

Rise of Temu and its Super Bowl ad buys

Temu first gained the spotlight one year ago during the Super Bowl in 2023.

Last year, the retailer bought two Super Bowl commercials, its first introduction to many U.S. consumers. PDD had launched Temu just a few months earlier, in September 2022.

“Through the largest stage possible, we want to share with our consumers that they can shop with a sense of freedom because of the price we offer,” PDD said in a statement at the time.

That strategy seems to be working. Temu was the most downloaded app in the U.S. in 2023, and the eighth-most downloaded app in the world, according to analytics firm Sensor Tower. The retailer reached 51 million monthly active users in January, a nearly 300% year-over-year increase.

In May, Temu surpassed rival Shein’s monthly U.S. sales for the first time. In September, a report from Earnest Analytics found that Temu is taking market share from Dollar General and Dollar Tree. Temu is now the No. 4 most-visited retail website in the U.S., behind only Amazon, Walmart, and eBay, The Wall Street Journal reported based on Insider Intelligence research.

Shein Group Ltd. is No. 36 in the Asia Database. Dollar General ranks No. 725 in the 2023 Digital Commerce 360 Top 1000. The Top 1000 is a ranking of North America’s leading retailers by online sales. Amazon ranks No. 1, and Walmart ranks No. 2.

Temu’s ad strategy

Temu is spending heavily on advertising, prioritizing customer acquisition. The retailer outspent all advertisers except Amazon on Facebook in Q4 of 2023, Sensor Tower said. Temu grew its ad spending on Facebook 318%, and spending on Instagram grew 101% year over year in the quarter, the firm said.

J.P. Morgan estimates Temu will spend $3 billion on marketing in 2024.

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How Alibaba is investing to grow international commerce

Paul Demery — Thu, 08 Feb 2024 23:42:03 +0000

Alibaba Group has been investing in a better customer experience. In doing so, its goal has been to drive sales across its international retail and B2B ecommerce sites. That strategy produced a 44% year-over-year rise to $4.02 billion in its international division’s sales for the fiscal third quarter ended Dec.31.

But those investments led to a 388% drop in earnings before taxes and amortization costs to a net EBITA loss of $433 million for the Alibaba International Digital Commerce group, Alibaba said. They also contributed to Alibaba Group’s 77% drop in Q3 net income to $1.51 billion.

Consequences of Alibaba investing in AliExpress Choice

For AIDC, the “losses increased primarily because of the increase in investment in AliExpress Choice” and other expenses, chief financial officer Toby Xu said on the earnings call.

Still, AliExpress Choice provided more products and prices to customers on the AliExpress.com international retail site because of these investments. Meanwhile, it was also a primary contributor to AIDCG’s revenue Q3 revenue gain, AIDC CEO Jian Fang said.

“AliExpresss achieved year-over-year growth of 60%,” he said. “This was mainly driven by the new AliExpress Choice model that we launched in early 2023.”

Executives added that Alibaba will continue investing in its supply chain operations to support the Choice program.

“By offering entrusted cross-border logistics, marketing and other services, we lower the barrier for merchants to engage in cross-border business, bringing more certainty to their operations and more diverse assortment to the platform,” Fang said.

Alibaba’s Visable acquisition

Fang added that in Europe, Alibaba’s B2B unit, Alibaba.com, completed its acquisition of the European B2B digital trade platform, Visable. Thanks to that deal, Fang said Alibaba is “further expanding its supplier base in the region and further advancing Alibaba.com’s global expansion and dual brand strategy.”

“There is huge potential for AIDC to increase user penetration in the majority of overseas markets, building on our current resources and footprint,” Fang said. “We will increase our investment in select regional markets where we see opportunities and value to achieve opportunities for high certainty and healthy growth.”

Alibaba’s international retail commerce sites include Lazada, AliExpress, Trendyol and Daraz.

Alibaba Group conducts its international wholesale sales through its Alibaba.com B2B ecommerce site.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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International commerce drives Alibaba’s biggest growth rate

Paul Demery — Wed, 07 Feb 2024 22:31:37 +0000

For an ecommerce company with $36.67 billion in revenue for its most recent quarter, Alibaba Group Holding Limited showed a respectable year-over-year growth rate of 5%.

Our top priority is to reignite the growth of our core businesses, ecommerce and cloud computing.

Eddie Wu, CEO

Alibaba Group

Alibaba owns the world’s two largest online marketplaces by gross merchandise value (GMV), Taobao and Tmall. Taobao ranks No. 1 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the largest such marketplaces by GMV. Tmall ranks No. 2. Both operate in China.

Eddie Wu, CEO, Alibaba Group

Alibaba revenue in fiscal Q3

The lion’s share of revenue was in Alibaba’s China retail ecommerce operations Taobao and Tmall, which grew combined revenue 1% to $17.43 billion. At Alibaba’s China B2B ecommerce site, 1688.com, revenue increased 23% to $747 million. Sellers on 1688 include include such U.S. manufacturers as Avnet, 3M and Stanley Black & Decker.

But Alibaba’s sharpest ecommerce revenue growth came in its International Digital Commerce Group, where retail commerce revenue surged 56% to $3.28 billion and wholesale climbed 8% to $740 million, for consolidated international growth of 44% to $4.02 billion.

Alibaba’s international retail commerce sites include Lazada, AliExpress, Trendyol and Daraz. The company conducts its international wholesale sales through its Alibaba.com B2B ecommerce site.

The IDCG is headed by its CEO, Fan Jiang. The IDCG ‘s chairman is J. Michael Evans, a former vice chairman of investment bankers Goldman Sachs who joined Alibaba Group last year as president.

Alibaba also reported an 86% revenue increase in its Cloud Intelligence Group and a 24% increase to $4.01 billion in its Cainiao Smart Logistics Network.

Investing to drive Alibaba’s growth

CEO Eddie Wu said Alibaba intends to drive stronger growth across its operations.

“Our top priority is to reignite the growth of our core businesses, ecommerce and cloud computing,” he said today in a statement about its fiscal third quarter. “We will step up investment to improve users’ core experiences to drive growth in Taobao and Tmall Group and strengthen market leadership in the coming year. We will also focus our resources on developing public cloud products and sustaining the strong growth momentum in international commerce business.”

Alibaba said Q3 net income fell 77% to $1.51 billion. It attributed the decline to “impairment of intangible assets of Sun Art and impairment of goodwill of Youku.”

Alibaba earnings

For the nine months ended Dec. 31, Alibaba reported:

Taobao and Tmall Group China retail commerce revenue increased 5% to $45.94 billion.
China wholesale commerce revenue increased 13% to $2.19 billion.
Cloud Intelligence Group revenue increased 3% to $11.38 billion.
International retail commerce revenue grew 62% to $8.36 billion
Alibaba international B2B ecommerce revenue increased 6% to $2.22 billion.

In November 2023, Alibaba Group became the first Asian Internet technology company to join the World Business Council for Sustainable Development, a group of over 200 businesses, to support WBCSD’s drive to make global value chains more sustainable.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports.

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Estee Lauder announces layoffs in Q2 earnings

Mary Meisenzahl — Wed, 07 Feb 2024 18:58:26 +0000

The Estee Lauder Cos. Inc. will lay off 3% to 5% of its global workforce this year, it said in a Feb. 5 second-quarter earnings call. Those job cuts will impact up to 3,100 of the beauty retailer’s 62,000 employees, The Wall Street Journal reported.

Layoffs are part of a multi-year plan to rebuild profit margins in 2025 and 2026, Estee Lauder said.

“We are focused on strategically leveraging our strengths to accelerate our return to more sustainable profitable growth while elevating our consumer activations and increasing our operating agility,” chief financial officer Tracey Travis said. “The restructuring program is designed to right-size and streamline select areas within our organization, which unfortunately necessitates us making the difficult decision of an expected net reduction in positions globally of 3% to 5%.”

Estee Lauder ranks No. 43 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers by online sales.

Wayfair (No. 10 in the Top 1000), Amazon (No.1), Macy’s (No. 17) and Levi Strauss (No. 191) all also announced recent layoffs.

What were Estee Lauder’s financial results?

Estee Lauder reported net sales declined 7% to $4.28 billion in its second fiscal quarter ended Dec. 31.

Skin care made up the largest portion of sales, accounting for $2.17 billion in the quarter. That was a decline of 10% from $2.43 billion in the year-ago period. Makeup sales also declined, down 8% year over year to $1.17 billion. Fragrance sales grew slightly to $737 million from $734 million. Meanwhile, hair care sales declined 5% to $173 million.

The retailer attributed much of the sales decline to waning demand in China.

“This decline was primarily driven by the slowdown of overall prestige beauty in mainland China,” CEO Fabrizio Freda said in a statement. Online sales in China also declined, with worse than expected performance on Double 11 Day, also known as Singles Day, on Tmall. Tmall is an Alibaba-owned marketplace. Tmall is No. 2 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the largest such marketplaces by gross merchandise value. Brick-and-mortar sales increased in China, but they were more than offset by the online decline.

Net sales in the Asia Pacific region fell 7% year over year, and the retailer lost some market share there, Freda said. Net sales in the Americas declined 1%. That was driven by decreasing demand in North America, partially offset by growth in South America. In Europe, the Middle East, and Africa, net sales declined 14% in the period. Part of the decline is due to rightsizing inventory levels, Estee Lauder chief financial officer Tracey Travis said, with 2% attributable to “business disruptions in Israel and other parts of the Middle East.”

Estee Lauder earnings

For the fiscal second quarter ended Dec. 31, 2023, Estee Lauder reported:

Net sales declined 7% to $4.28 billion.
Gross profit declined 8% to $3.13 billion.

For the six months ended Dec. 31, 2023, Estee Lauder reported:

Net sales declined 9% to $7.80 billion.
Gross profit declined 12% to $5.57 billion.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports.

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Ecommerce earnings recap: What you missed from Amazon, Tractor Supply and more

Mary Meisenzahl — Fri, 02 Feb 2024 20:58:25 +0000

More retailers in Digital Commerce 360’s Top 1000 list of leading ecommerce retailers in North America reported ecommerce earnings results for the most recent fiscal quarter. Retailers reported mixed results on demand returning to normal levels. Here’s the ecommerce earnings summary you need to know from this quarter. Read more ecommerce earnings coverage here.

Parentheses indicate the merchant’s ranking in the Top 1000.

Amazon.com Inc. (No. 1)

Amazon beat expectations with earnings for its fiscal fourth quarter ended Dec. 31, 2023. Its net sales in the quarter grew 14% year over year to $170.0 billion.

Full-year sales grew 12% to $574.8 billion in 2023, up from $514.0 billion in 2022.

Read more about Amazon’s earnings here.

Boot Barn Inc. (No. 366)

Boot Barn reported that net sales grew 1.1% to $520.4 million in its fiscal third quarter ended Dec. 30. Ecommerce same-store sales declined 11.5%, and retail same-store sales declined 9.4%.

“Our online channel has felt pressure due to less efficient online marketing spend, partly caused by an increase in digital spend by a handful of vendors and competitors,” CEO Jim Conroy said. “Our objective continues to be to maximize profitability for our online business, so we will remain disciplined with our digital spend so as not to erode earnings and our desire to grow the top-line sales,” he said. The retailer expects further ecommerce declines next quarter.

Columbia Sportswear Co. (No. 149)

Columbia reported net sales declined 9% to $1.1 billion in its fiscal fourth quarter ended Dec. 31. Net sales declined 1% for the full year. U.S. net ecommerce sales declined by a high single-digit percent, the retailer said without specifying further.

“Softer consumer traffic and weather weighed on results. Our DTC business performed well during peak sales windows like Black Friday and Cyber Monday, but fell off during non-peak periods,” CEO Tim Boyle said.

Costco Wholesale Corp. (No. 6)

Costco said net sales grew 6.1% to $56.72 billion in its first fiscal quarter of 2024 ended Nov. 26, 2023. Ecommerce comparable sales grew 6.3% in the same period. E-gift cards, snacks and pet items were all strong in the ecommerce channel, the retailer said.

Deckers Brands (No. 74)

Deckers reported revenue grew 16% to a record $1.56 billion in the fiscal third quarter ended Dec. 31.

“Our brands delivered Deckers’ largest quarter in history, with record revenue and earnings as both HOKA and UGG drove exceptional performance in the quarter, led by our DTC channel and high levels of full-price selling,” CEO Dave Powers said in a statement.

Pitney Bowes (shipping carrier to the Top 1000)

Pitney Bowes announced revenue declined 4% to $872 million in its fiscal fourth quarter ended Dec. 31. Full-year revenue declined 8% to $3.3 billion. Revenue from global ecommerce declined 7% in the fourth quarter to $381 million and was down 14% for the full year. Meanwhile, domestic parcel volume grew, it said.

Pitney Bowes is a shipping carrier to 104 retailers in the Top 1000.

Sally Beauty Supply LLC (No. 523)

Sally Beauty said consolidated net sales declined 2.7% to $931 million in its fiscal first quarter ended Dec. 31. Comparable sales declined 0.8% during the period. Online sales remained flat with the year-ago period, comprising $91 million in sales.

The beauty retailer reported some improvements in demand, with a return to normalcy among customers over the holiday season.

Skechers USA Inc. (No. 302)

Skechers said sales for the fiscal fourth quarter ended Dec. 31 grew 4.4% to $1.96 billion. Annual sales grew 7.5% to a record $8.0 billion. Direct-to-consumer sales, which encompass ecommerce, grew 20.3% in Q4 and 24.3% for the whole year. Meanwhile, wholesale sales declined 8% for both the fourth quarter and full year.

Online DTC sales recorded double-digit growth, Skechers said.

“The momentum in our direct-to-consumer segment is indicative of strong consumer demand driven by the combination of our fresh and innovative product paired with effective brand marketing. We are excited about our omnichannel growth opportunities as we continue to deliver on our strategy to expand our direct-to-consumer presence worldwide,” said John Vandemore, chief financial officer.

United Parcel Service Inc. (shipping carrier to the Top 1000)

UPS consolidated revenue declined 7.8% to $24.9 billion in its fiscal fourth quarter ended Dec. 31. Consolidated operating profit declined 22.5% during the same time period to $2.5 billion. The carrier said it will eliminate 12,000 jobs this year as a plan to generate $1 billion in cost savings as revenue and package volume decline.

532 online retailers in the Digital Commerce 360 Top 1000 use UPS for their fulfillment — either exclusively or in combination with other carriers.

Target Corp. (No. 5)

Third-quarter sales declined 4.9% for the mass merchant, to $25 billion from $26.12 billion in its fiscal third quarter ended Oct. 28. Meanwhile, Target online sales decreased 6% year over year. Moreover, Target’s online sales declined 6.7% year over year for the first nine months of its fiscal year.

Read more about Target’s earnings here.

Tractor Supply Co. (No. 99)

Tractor Supply reported net sales declined 8.6% to $3.66 billion in its fiscal fourth quarter ended Dec. 30. The retailer did not share ecommerce sales for the quarter but said annual online sales topped $1 billion for the first time in 2023. It also reached 7 million mobile app downloads, with 2 million of those downloads in 2023.

“We continue to capitalize on opportunities to accelerate our growth,” CEO Hal Lawton told investors. “Between our website and our mobile app, we have more visitors online now than we do in our stores. These digital assets are essentially the front door to Tractor Supply. We’ll be focused this year on improving our digital customer experience and capability as we look to accelerate conversion rate.”

Lawton cited poor weather, high interest rates and inflation as headwinds facing Tractor Supply and impacting consumer demand.

Walmart Inc. (No. 2)

Walmart reported that U.S. online sales grew 24% for its fiscal 2024 third quarter ended Oct. 27. Global ecommerce sales grew 15% over the same period, while international ecommerce declined 3%.

U.S. comparable sales grew 4.9%, and total revenue grew 5.2% to $160.8 billion.

Read more about Walmart’s earnings here.

1-800-Flowers.com Inc. (No. 47)

1-800-Flowers revenue declined 8.4% to $822.1 million in the second fiscal quarter ended Dec. 31. Ecommerce revenue declined, but slightly more slowly. It was down 6.6% to $738.4 million. Average order value grew 3% year over year as higher-income consumers became a larger percentage of the customer base and tended toward more expensive gifting purchases, the retailer said. Meanwhile, lower-income consumers continued to be impacted by macroeconomic pressure and cut back spending.

During the first half of our fiscal year, we have been prudent with our marketing spend in a challenging consumer environment in which we didn’t see an adequate return on investment,” president Thomas Hartnett said.

So what does it mean?

UPS and Pitney Bowes both recorded declining revenue during the peak holiday season. UPS is still grappling with the fallout of its near strike last year and recovering volume it lost during that period.
Footwear retailers Skechers and Deckers both recorded significant growth in their most recent quarters, with major gains in DTC sales. Other apparel retailers did not report the same gains in consumer demand.

Ecommerce earnings calendar

Here’s when other ecommerce earnings are scheduled to report this quarter:

Amazon.com Inc.: Feb. 1
Best Buy Co Inc.: Feb. 29.
Costco Wholesale Corp.: Dec. 14
The Home Depot Inc.: Feb. 20
Lowe’s Cos Inc.: Feb. 27
Target Corp.: March 5
Walmart Inc.: Feb. 20

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The post Ecommerce earnings recap: What you missed from Amazon, Tractor Supply and more appeared first on Digital Commerce 360.

Coupang’s $500 million Farfetch acquisition is complete, despite investor pushback

Brian Warmoth — Fri, 02 Feb 2024 17:23:38 +0000

Just over one month after a deal was first announced, Coupang completed its Farfetch acquisition. The companies will proceed despite opposition from a group of investors who challenged the $500 million acquisition’s short timeline.

The deal, made possible through bridge loans and a partnership with the investment firm Greenoaks Capital Partners, will position Farfetch “to pursue steady and thoughtful growth,” a statement from Coupang states.

Coupang ranks No. 12 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the top 100 online marketplaces. Farfetch is No. 30.

Why Coupang is acquiring Farfetch

London-based Farfetch faced possible bankruptcy without a dramatic influx of capital to cover its debts. The Coupang deal meant that Farfetch could abandon another proposal from the Swiss luxury goods group Richemont. Under the terms of that deal, Richemont would have taken a minority stake in Farfetch.

“By providing access to $500 million in capital, this acquisition allows Farfetch to continue delivering exceptional services for its brand and boutique partners, and to more than 4 million customers around the world,” Coupang’s statement on Wednesday read.

Investors opposed to the Farfetch acquisition

On Jan. 26, a group of investors calling themselves “the 2027 Ad Hoc Group” declared that it disagreed with the terms of the Coupang deal. They assessed that the sale undervalued Farfetch, based on previous valuation estimates from August 2023. In addition, the group accused Coupang of deterring competing bidders with a “US$1bn ‘poison pill.'”

Initial terms of Farfetch’s Dec. 18 agreement would have provided time to entertain other bidders until April 30.

According to the group’s own press release, the funds managed by institutional investors in the 2027 Ad Hoc Group held “over 50% of Farfetch’s 2027 convertible notes.” Their public move followed a notice of default and acceleration that meant debt to be paid for their notes would be wiped to zero.

“The Group believes this process sets an incredibly dangerous precedent,” stated a spokesperson for the 2027 Ad Hoc Group. “Allowing this transaction to complete fails to maximize the value of the assets of the Company, at a time when at least three other credible parties were publicly reported to be interested in all or parts of the business.”

Farfetch’s SEC filing and message on convertible notes

Farfetch addressed convertible notes in a filing with the Securities and Exchange Commission dated Jan. 31. The filing states that — as a part of its acquisition — debt related to notes such as those described by the 2027 Ad Hoc Group will not be recoverable going forward.

“Farfetch expects that holders of its Class A and B ordinary shares and its convertible notes will not recover any of their outstanding investments in Farfetch, and Farfetch expects to be liquidated,” the company stated in its Form 6-K filing.

Moreover, Farfetch maintains that its efforts to obtain a competitive bid were sufficient.

“Following a robust marketing process undertaken by JP Morgan on behalf of FF PLC for the sale of all of FF PLC’s business and assets, which process did not result in a proposal for a competing transaction, on January 30, 2024, Surpique LP consummated the purchase of FF PLC’s business and assets through an English-law pre-pack administration process (the ‘Sale’),” Farfetch stated in its filing.

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The post Coupang’s $500 million Farfetch acquisition is complete, despite investor pushback appeared first on Digital Commerce 360.