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Consumer & Retail Report #4: 7/31 Recap
Summary of the Week in Consumer and Retail
Welcome to our Consumer and Retail recap where we share noteworthy headlines, updates, and insights. Never spam.
Table of Contents:
RUMOR: Farfetch FTCH 0.00%↑ – The online luxury fashion seller was close to a deal with Switzerland’s Richemont that would see it absorb Richemont-owned fashion retailer YNAP.
Why this matters? - It’s been long rumored that one of Apple’s long-awaited products would end up being an “Apple car.” While rumors have come and gone, this news seems to be worth some weight towards the rumor.
Why this matters? - In-person fitness was a part of the reopening play in a post-COVID world. F45 going public last year was supposed to benefit from this trend but quite the opposite has happened. The company is down 88% since going public and management seems to not know how to right the ship. If you’re looking at other opportunities, Xponential Fitness is the way to go. You can read both my reports from this link.
Xponential Fitness XPOF 0.00%↑ says total members grew 32% to 539,000 in Q2, from 408,000 last year.
Apple prepares rare iPhone discount for China buyers.
Why this matters? - The discounts come as China’s economy tries to bounce back from major Covid-19 lockdowns in business hubs Shanghai and Beijing, which have hurt sales of leading domestic smartphone brands from Xiaomi Corp. to Vivo and Oppo. Apple bucked the trend by registering healthy growth in China shipments in June, according to national statistics, though the discounts suggest even it has surplus inventory heading into the latter half of the year.
Why this matters? - In 2022 alone, search demand within the collectibles category has more than doubled, with consignments increasing by more than 48% since the start of the year.
Amazon to raise Prime prices in Europe as retailer wrestles with costs.
H&M to sell Russian business to local or foreign company.
SmartRent SMRT 0.00%↑ Chief Revenue Officer Christopher Jon Edmonds was terminated from his position on July 25.
Eric Langan, RCI President & CEO, said: "Cheetah becomes our fourth adult nightclub in South Florida, 15th club acquisition this fiscal year, and 52nd club in our portfolio. We believe it should generate approximately $4 million in adjusted EBITDA."
Altria MO 0.00%↑ also said it cut the estimated fair value of its 35% stake in Juul Labs, a vape products company, to $450 million.
Why this matters? - That’s more than 70% lower than the $1.6 billion at the end of March. Altria is Juul’s largest investor, originally paying $12.8 billion in 2018.
Sankyo Seiko to purchase French luxury fashion house Leonard.
Why this matters? - With luxury retail and areas of apparel the only thing to be holding up in the consumer discretionary space, many rumors are floating around that further consolidation will occur. LVMH has done well to weather all the turmoil so far in the economy and adding to its already existing portolio could be in the cards for smaller players.
MCG MCG 0.00%↑ President sold 86,211 shares at $6.96 - $7.04 worth ~$604K.
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Until next time,
Paul Cerro | Cedar Grove Capital
Personal Twitter: @paulcerro
Fund Twitter: @cedargrovecm