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| Here's your daily business briefing. - 👗 Shein and Forever 21 launch co-branded clothing line
- 🔍 Deep Dive: U.S. food insecurity rises for the first time in 11 years
- 👜 Prada sales slump despite Miu Miu success
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Thank you!! Shriram
p/Shriram | |
| 1 | | Shein and Forever 21 are launching a co-branded clothing line primarily available on Shein's website, building on their earlier joint venture when Shein invested in Sparc Group, the operator of Forever 21. In this partnership, Shein will design, produce, and distribute co-branded Forever 21 apparel and accessories, emphasizing availability on Shein's website and featuring a range of men's and women's attire, including sportswear, activewear, and swimwear. More: - As part of their arrangement, Shein purchased around one-third of Sparc Group, and Sparc acquired a small share of Shein.
- The partnership aims to boost sales for both brands and help Shein enhance its reputation, particularly as it considers a potential U.S. IPO in 2024, addressing concerns related to labor practices, tariffs, and design integrity.
- The collaboration hopes to bring Forever 21 back to life and attract younger consumers who buy online.
- In addition to giving Forever 21 a digital boost, the partnership gives Shein credibility with a significant ally.
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What the numbers say: Food insecurity affected over 17 million U.S. families (12.8% of all households) in 2022 compared to 13.5 million households (10.2%) in 2021. In 2022, there were 6.8 million households experiencing food insecurity, which is a rise from 5.1 million households in 2021. Relevance: The impact of increased food costs and supply interruptions during the COVID-19 outbreak was highlighted by the U.S. Department of Agriculture, which reported the first yearly increase in food insecurity in over a decade. More data: Due to supply disruptions, crop losses, and geopolitical issues like Russia's war in Ukraine, food costs skyrocketed throughout the pandemic, making it increasingly difficult for lower-class households to acquire basic meals. Food insecurity highlights the persistent difficulties that poor American households experience, which have been made worse by national and international events. | | | |
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| 3 | | Prada SpA reported third-quarter sales of $1.17B, falling short of analyst expectations, as its flagship Prada label experienced a growth slowdown, dropping to 5% from the previous quarter's 15%. Global luxury goods demand is slowing, with Hermes International faring better than competitors like Kering SA (Gucci's owner) and LVMH Moet Hennessy Louis Vuitton SE, which reported below-expectation sales growth in fashion and leather goods. More: - Andrea Guerra, CEO of Prada, claims that geopolitical events like the Middle East crisis have harmed the company's operations.
- With full-price volumes and average prices driving the increases, retail sales — the most significant contributor to the overall figures — rose by 17%.
- Except for the Americas, which showed a minor 1% dip, most markets recorded double-digit increases.
- Japan recorded the highest growth at 47%, primarily due to domestic demand.
- Miu Miu topped the Lyst Index in the third quarter for the most popular products and brands on the shopping app and in mentions on social media.
- Miu Miu's retail sales increased by 49% in every category.
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| 4 | | Stellantis, the parent company of Chrysler, attributed a revenue loss of over $3B to the six-week U.S. auto worker strike, resolved after labor deals with the United Auto Workers. The strike caused around $3.2B in lost revenue and had a profit impact of less than $790M. More: - The business exceeded analyst forecasts by reporting a gain in third-quarter sales from $44.33B to $47.48B, ascribed to improved volume and pricing, somewhat offset by currency exchange rates.
- Compared to Ford and GM, which recorded profit losses of $1.3B and $800M, respectively, the strike had a less significant effect on profits.
- Stellantis pointed out that, in contrast to its rivals, its global organization was not as affected by the strike in North America.
- To 1.4 million, consolidated vehicle shipments grew by 11% across several areas.
- Stellantis reaffirmed its forecast for the entire year, predicting positive free cash flow and an adjusted operating income margin in the double digits.
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| 6 | | Southwest announced third-quarter earnings per share of $0.38, in line with estimates, and sales of $6.53B, just less than $6.57B. Southwest Airlines aims for a 10% to 12% expansion in the first quarter, down from the prior 16% prediction, and intends to reduce capacity growth in 2024 as travel demand recovers to pre-pandemic levels. More: - CEO Ted Christie attributed the third-quarter 2023 performance to weaker demand and discounted fares in their markets.
- Southwest projects a growth rate of 6% to 8% for the entire year 2024.
- With capacity growing by roughly 21%, Southwest anticipates a 9%-11% decrease in unit revenue in the fourth quarter over the prior year.
- In the third quarter, Southwest's net income dropped to $193M, or $0.31 per share, a 30% year-over-year decline.
- Similar difficulties with declining demand forced other airlines, notably Spirit and Frontier, to change their expansion strategies.
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- Australia's Treasury Wine Estates is acquiring Californian vineyard DAOU Vineyards, founded by Lebanese migrants, for up to $1B, aiming to establish a luxury wine division in the Americas.
- Realty Income will acquire Spirit Realty Capital in an all-stock deal valued at about $9.3B, with Spirit shareholders receiving 0.762 shares of Realty stock for each Spirit share.
- An analyst from the Wells Fargo Agri-Food Institute reports that prices for the standard 10- to 15-pound Thanksgiving turkey dropped 13% in October over the prior year.
- As part of its cost-cutting measures, Charles Schwab has let go of around 2,000 workers or 5% to 6% of its workforce.
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Term of the Day Board of directors: A board of directors is a group of individuals elected by shareholders to govern and oversee a company’s strategy and management. Question of the Week What's one tool or app that has significantly made your life easier at work? Join the conversation |
INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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