Adam Levine-Weinberg

Target has been one of the biggest winners in the toy business since the 2018 liquidation of Toys"R"Us. The demise of the only sizable national toy chain enabled discounters (led by Walmart, Amazon, and Target) to extend their growing dominance in toy sales. That said, a disappointing holiday performance in 2019 taught Target that success has to be earned. An omnichannel partnership with a relaunched Toys"R"Us (under new ownership) failed to meet expectations, as Target's toy sales remained flat during the 2019 holiday season relative to …

Target’s FAO Schwarz Partnership Is No Game ChangerRead More

Off-price retail leader TJX faced a big test after the Covid-19 pandemic swept the globe in 2020. Like other discretionary retailers, it was forced to close its stores for weeks (or months, in some jurisdictions). Meanwhile, mass merchants like Target stayed open, enabling them to capture discretionary sales. Even after TJX reopened its stores, customer traffic initially remained well below pre-pandemic levels. Many consumers continued to shift discretionary spending to ecommerce or mass merchants to minimize the number of shopping trips …

Even When It Loses, TJX Always WinsRead More

When Tritton took the top job in late 2019, the iconic home furnishings destination desperately needed a reinvention. The former Target chief merchant rapidly implemented long-overdue strategy changes. While one could quarrel with some of his decisions (e.g., abruptly changing Bed Bath & Beyond's product sourcing strategy and initially prioritizing merchandising changes over supply chain modernization), most of his plans made sense. Unfortunately, the supply chain snarls of 2021 and plunging demand for home furnishings in recent months …

The Share Buyback That Killed Bed Bath & BeyondRead More

To nobody's surprise, the Covid-19 pandemic gave Amazon a huge market share boost. So far, the ecommerce giant has been able to maintain most of its pandemic share gains even as consumer shopping patterns have started to normalize. However, the combination of surging costs and slowing growth are taking a severe toll on profit margins. The rising pressure on Amazon's core ecommerce profitability raises serious questions about the financial sustainability of its business model. Red Ink Piling Up for the Retail Business In late April, …

Behind Amazon’s Thorny Profitability ProblemRead More

Last fall, investment fund Jana Partners launched an activist campaign at Macy's. The fund aimed to double Macy's share price by separating the department store's growing ecommerce business from its physical stores. Jana Partners portfolio manager Scott Ostfeld estimated that Macy's digital operations could be worth $16.8 billion: far more than the entire company's market value at the time. Macy's management took this suggestion seriously. Rather than rebuffing Jana Partners, CEO Jeff Gennette told investors in November that Macy's had hired …

Macy’s Beats Back Activist AttackRead More

A year ago, Kohl's beat back a campaign by four activist investment funds to unseat its board and shake up its operations. The activists settled for smaller changes at the board level: adding three new directors, creating a standing finance committee to oversee capital allocation, and authorizing a $2 billion share repurchase program. The department store didn't get a very long reprieve, though. In early December, Engine Capital called for Kohl's to either spin off its ecommerce business as a separate entity or sell the whole company. And in …

Kohl’s Under PressureRead More

Over the past two years, buy now pay later (BNPL) services have rapidly gone mainstream in the United States. As recently as 2019, U.S. BNPL payment volume totaled just $3 billion. That rose to an estimated $55 billion last year. Many prognosticators expect this momentum to continue for the foreseeable future. BNPL has become a go-to payment method for younger consumers (particularly millennials and Gen Z) during the Covid-19 pandemic. Merchants have eagerly partnered with BNPL platforms to appeal to these cohorts. BNPL has become especially …

BNPL Is No Panacea for RetailersRead More