The Weekly Closeout: Toys R Us launches NFTs and David’s Bridal debuts loyalty program for teens
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 Nike cutting ties with Kyrie Irving to Rent the Runway beaming over Kate Middleton’s outfit choice, here’s our closeout for the week.
What you may have missed
Kate Middleton didn’t get her dress from Rent the Runway, but she may as well have
Rent the Runway Co-founder and CEO Jennifer Hyman would like to take some credit for the splash made by Kate Middleton, princess of Wales, in Boston last week.
The royal made headlines when she wore a rented dress to the Earthshot Prize Awards, established by her husband, Prince William, to fund climate change solutions. The key lime-colored dress was rented from U.K. site Hurr, Vogue reported. While the garment itself may not have come from Rent the Runway, the idea of renting rather than owning apparel (embraced by men in need of formal attire for eons) has flourished thanks to the U.S. site, Hyman told analysts on a Wednesday call.
“If you would have told anyone 13 years ago when we launched Rent the Runway, and people thought renting was disgusting and not chic and not something that anyone would talk about, that Princess Kate – that royalty – would be renting and talking about it publicly,” she said. “That’s really due to us starting this movement globally, making rental something that’s normalized, aspirational.”
The company had a decent Q3, posting record quarterly revenue of $77.4 million, up 31% year over year, and wider margins. The site wasn’t profitable, but net loss narrowed $36.1 million from $87.8 million last year, and it grew its active subscriber base 15% to 134,240.
Bed Bath & Beyond extends debt swap offer, again
After first announcing an initiative in October to pay off some of its debts with a bond exchange, the struggling home goods retailer on Tuesday announced it has extended its offer to exchange its outstanding senior notes.
The bond exchange offer includes swapping 3.749% senior notes due in 2024 with 3.693% senior second lien secured non-convertible notes due 2027 and/or 8.821% senior second lien secured convertible notes due 2027, 4.915% senior notes due 2034 with 12% senior third lien secured convertible notes due 2029 and 5.165% senior notes due 2044 with third lien convertible notes.
Bed Bath & Beyond also announced it is “soliciting consents to amend the indenture governing the Old Notes.”
The exchange offers were previously scheduled to expire at 11:59 p.m. ET on Dec. 5, but have been extended through Dec. 19 at 11:59 p.m. Late last month, the retailer extended its offer relating to the debt exchange, pushing the deadline from Nov. 18 to Dec. 5.
The principal amount of old notes validly tendered but not withdrawn was 17.58% for the notes due in 2024, 24.9% for the notes due in 2034 and 11.16% for the notes due in 2044.
A famous giraffe gets into the NFT game
Toys retailers Toys R Us is releasing 10,000 digital collectibles as part of a metaverse partnership with Web3 company Anybodies, according to a press release Tuesday.
Customers can purchase NFTs on the Magic Eden digital marketplace starting Friday, which feature the brand’s iconic Geoffrey the Giraffe along with collectibles that are inspired by the most popular toys and brands from stores.
Collectible owners will get access to GCoins, which can be redeemed for access to exclusive physical and digital toys, store experiences and more. Loyalty-based rewards will be available as the program evolves, according to the release.
Dyson’s new purifying headphones make you look like Bane from Batman
Dyson’s next industry it hopes to disrupt is headphones, and it’s not coming at them from a regular angle. The technology brand announced on Thursday that it will be releasing headphones starting in January that come with the added benefit of air purification. Oh, and they will cost $949.
The Dyson Zone noise cancelling headphones have an attachable, non-contact visor which project streams of purified air that come from filters within the earcups. Users will have 50 hours of audio-only run time on a full charge, and four hours of audio plus air purifying. They will also take three hours to charge to 100%.
“Air pollution is a global problem – it affects us everywhere we go. In our homes, at school, at work and as we travel, whether on foot, on a bike or by public or private transport. The Dyson Zone purifies the air you breathe on the move,” Dyson Chief Engineer Jake Dyson said in a statement. “And unlike face masks, it delivers a plume of fresh air without touching your face, using high-performance filters and two miniaturized air pumps. After six years in development, we’re excited to deliver pure air and pure audio, anywhere.”
David’s Bridal wants your teenager
David’s Bridal announced on Tuesday that it launched a new loyalty program for high school students, dubbed Diamond Prom. The offer is an extension of the company’s Diamond Loyalty program, which the company introduced in 2020.
Members of the free program receive one point for every dollar spent and can earn exclusive offers. They are also eligible to win a $1,000 scholarship and can work with classmates for a chance to earn a free photo booth at their school’s prom event.
What we’re still thinking about
This is the amount WHP Global will invest in Express. The investment will form an intellectual property joint venture. Express CEO Tim Baxter said in an earnings call this week the joint venture will strengthen the company financially and operationally. As part of the deal, WHP gains a 7.4% stake in the apparel retailer.
During that same call, Baxter also acknowledged a tough Q3 for Express. The company reported an operating loss of $30 million, down from income of $16.3 million last year. Sales declined 8% year over year last quarter to $434.1 million, and comps were also down 8%.
That’s how many people retailers hired for seasonal positions last month, the lowest number since Great Recession-era 2008 and a 26% decline from last year, according to a Challenger, Gray & Christmas analysis of data from the Bureau of Labor Statistics.
For the season overall so far (October plus November), retailers have filled 27% fewer seasonal jobs, and the transportation and warehousing industry 30% fewer. This could be in part because the industry is well staffed, with the highest level of employment since 2018. The transportation and warehousing sector also employs more workers than at its previous peak in December 2021. But it’s an emerging trend, as last October through December retailers added 7% fewer seasonal jobs compared to 2020, according to another Challenger, Gray & Christmas study.
What we’re watching
Another brand ambassador deal crumbles
When Nike cut ties with Kyrie Irving earlier this week, it marked the second high-profile brand ambassador to be dropped over antisemitism in little more than a month. Adidas severed its relationship with Kanye West, also known as Ye, at the end of October. Both athletic brands denounced antisemitism, with Adidas calling West’s behavior “unacceptable, hateful and dangerous.”
The moves signal that companies are scrutinizing their brand ambassador relationships more closely, and taking a stronger stance on hate speech, even if it means sacrificing revenue (Adidas estimated the hit from dropping West would be about $250 million). But is severing the partnership enough?
How retailers should handle their remaining product, for example, is already emerging as a problem. Nike did not respond to questions about what it plans to do with the remaining merchandise from its deal with Irving (the company pulled the Kyrie 8 shoe release in November), but Adidas indicated it would sell Yeezy products next year without the Yeezy name attached to them. Will that help recoup sales or just tie Adidas once more to the behavior it denounced?