February Monthly News Roundup

We are pleased to share with you our TRAUB monthly news roundup from February 2019.


February was yet another month of high activity across M&A and capital raises. Foot Locker had a big month led by its $100mm investment in GOAT and its $12.5mm investment in Rockets of Awesome. The digital natives continued to take in some major funding with notable raises including: Calm ($88mm), ThirdLove ($55mm), Rebag ($25mm), Neighborhood Goods ($14.5mm), Showfields ($9mm), By Humankind ($4mm), Argent ($4mm) and Girls' Night In with a pre-seed round of $500k. In addition, P&G acquired This is L, a  startup retailer of period products and prophylactics, to complement its Always and Tampax portfolio. AdoreMe acquired nearly 20-year old maternity brand Belabumbum in a push for differentiation amid the increasingly crowded lingerie market. WeWork made its first acquisition of 2019, buying Euclid, a data platform that tracks visitor identity and behavior and UTA acquired digital media firm DBA as it expands in the arena of working with digital media stars and influencers. We anticipate 2019 to continue at this pace of high activity across public and private markets. PinterestLyft and Levi Strauss filed for IPO, with several other high profile consumer companies such as Peloton, Uber and The Real Real expected to file later this year. 


This month we also saw some big moves by established retail companies. Gap announced that it would spin off Old Navy to create two independent publicly traded companies. Amazon continued its shift into physical retail with plans to open dozens of grocery stores in major cities that would be distinct from it's Whole Food chain. Walmart launched a baby products line with Kristen Bell and Dax Shepard and a denim line with Sofia Vergara. Target is rolling out Flamingo, the sister brand to Harry's, to all Target stores. QVC launched Q Anytime, a mobile app with shoppable video. And Harrods will create a new e-commerce platform using an enterprise white-label offering from Farfetch. 


CBD is seemingly everywhere these days and a new analysis found that the CBD market could reach $16bn by 2025. We saw a number of developments in the mainstreaming of CBD this month. Green Growth Brands made a deal with Simon Property Group to run kiosks and stores selling its Seventh Sense brand of CBD personal care products in nearly 100 shopping centers. By 2020, Green Growth Brands hopes to have 450 CBD kiosks at mall locations around the country. Med Men, the $2.2bn cannabis retailer launched its first clothing collection incorporating the signature red MedMen logo. On the luxury side, Barneys jumped on the cannabis train with a store-in-store called the High End which will offer all manner of luxe smoker's paraphernalia. Even Martha Stewart is getting into the game, joining Marijuana company Canopy Growth as an advisor to the company to develop a new line of CBD products for both humans and animals. But as the pace of mainstream CBD adoption has sped up, some cities have started to crack down.The Department of Health and Mental Hygiene in New York City ordered restaurants under its jurisdiction not to sell food products containing CBD.  Despite some regulatory setbacks we think the CBD market will only continue to heat up in 2019. Still have questions about CBD? The New Yorker's got you covered.


Finally, Karl Lagerfeld passed away this month, leaving big shoes to fill at both Chanel and Fendi. Morty Singer shared some remembrances on Lagerfeld's wonderful turn of phrase in this blog post


Also, in case you missed it, check out Morty Singer on Bloomberg last week on how retailers should be thinking outside the box.


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