March 2020 Monthly News Roundup

We are pleased to share with you our roundup for March 2020. This month we highlight the struggles felt by startups and legacy players alike, the innovation underway as brands pivot to tackle COVID-19, and the social good initiatives that have emerged during these trying times. 

We are pleased to share with you our roundup for March 2020. This month was like nothing we have experienced before. As we write this monthly newsletter we marvel at how differently our lives were just one month ago. The consumer retail industry, alongside nearly all other industries globally, is under great challenges as it looks to pivot and survive in the wake of this new reality. While some businesses have already shuttered, we have also seen many companies, both big and small, creatively using their resources to help fight this pandemic. 

Within the public and private markets,  activity has been much slower than usual. With the public markets taking a big hit, planned IPOs are at a standstill. Earlier this month, J Crew announced plans to delay its IPO of Madewell. While the private markets have been slightly more active, it too has been much quieter than in previous months, with acquirers and investors acting far more cautiously. M&A was minimal in March with the exception of Pepsico completing a $3.9 Billion acquisition of energy drink brand Rockstar. Notable investments this month included: Mobile streaming platform Quibi raising ahead of its planned launch in April ($750M), meat alternative darling Impossible Foods ($500M), mobile gaming company Scopely ($200M), DTC linens brand Brooklinen ($50M), payment platform SpotOn ($50M) and DTC sparking water brand Spindrift ($30M).

The Struggle From Startup to Legacy Players 

The struggle to survive right now is felt by startups and legacy players alike. As we wrote in our January and February issues this year, the digital native world was already experiencing challenges before the Covid-19 pandemic hit. With heightened scrutiny around the lack of profitability for many of these brands, we saw established players like Brandless and Walmart’s Jetblack service go out of business. The FTC also blocked Edgewell’s planned $1.4 Billion acquisition of razor startup Harry’s, causing investors and operators alike to worry about the future of the M&A consumer market. And other digital darling brands like Outdoor Voices or Rockets of Awesome, who months ago seemed to be on a fast flying rocket ship, announced their own set of layoffs, store closures and the like. 

We have long heard of “the death of retail” and though that statement is far from reality, it is true that many legacy retailers of late who could not innovate found themselves out of business even before the Covid-19 crisis. It was only late last year that Barney’s filed for bankruptcy and in February of this year Macy’s announced another set of store closures and layoffs. The effects of Covid-19 are now hitting retail hard, with interuptions to the supply chains, brands forced to closes stores and operations and a surge in unemployment leading to limited consumer discretionary spending. On March 11th Neiman Marcus had announced plans to shutter nearly all its Last Call off-price stores. Less than two weeks later, Neiman Marcus has announced a possible filing for bankruptcy as it continues to struggle. 

Pivoting & Innovating at Rapid Speed

Brands have also been quick to think creatively and adapt to survive in this new reality. In beauty, salons and spas have gone digital amid these closures and are finding new ways to service clientele. For example Bleach London launched a virtual “hair party” series which customers can access after purchasing their hair care products online. Many beauty brands are also experimenting more on TikTok to reach their audience. Fenty beauty recent launched its “TikTok house”. Studios, including NBC Universal among others, have forgone the traditional theatrical release window and are releasing new films now on iTunes and Amazon for $19.99. And Amazon is looking to hire 100,000 new employees to keep up with the current online demand as the world shelters in place amidst this pandemic. 

New companies are also being launched overnight. Jupe, a startup launched merely one week ago, aims to address hospital room shortfalls with modular mobile spaces. Its mobile spaces can be produced at a tiny fraction of a standard hospital room and shipped anywhere with its logistics infrastructure. Similarly CURA, has developed an open-source design template that transforms shipping containers into emergency ICU pods. It is designed to be produced and transported to hospitals at rapid speed. New various marketplaces have also been formed to centralize essential products. Project 95 is an online platform that connects healthcare institutions that urgently need equipment with suppliers worldwide that stock them or have the capacity to produce them. Startup Mirakl launched a similar marketplace in France. And science journal Frontiers launched a portal which is updated daily to help connect researchers and scientists seeking a cure for coronavirus with grant funders. 

United Effort for Social Good

As new companies spring up with innovative solutions for the corona crisis, existing companies big and small, across industries, are using their resources for good. Within the fashion industry there has been a massive push to supply doctors and nurses with protective personal equipment (PPE) like masks and gowns. Burberry has pivoted from trenchcoats to hospital gowns, Nike from 2020 Olympic uniforms to gowns and masks. Gap to All Birds, Eddie Bauer to Brooks Brothers, and countless other brands, have shifted resources to supply hospitals with masks, face shields, shoes and hospital gowns. In addition, LVMH converted its perfume factories to make hand sanitizer which it has been handing out free of charge in France. A handful of DTC startups recently created the coalition “Brands x Better” pledging to donate 10% of all proceeds to COVID-19 related charities. 

Alongside the retail industry, many companies in various industries are stepping up to help. In hospitality, hotels are looking at how they can turn themselves into temporary hospitals and provide additional bed space to patients. In dining, countless restaurants are donating food to hospital workers. And Michelin star chef Jose Andres repurposed his shut down restaurants into community kitchens where those in need can receive a low priced or free meal. Automotive players such as Tesla, Ford and General Motors are repurposing their manufacturing facilities to produce ventilators. Telehealth companies like Ro are offering coronavirus assessments to people who believe they may have the virus. While of course these patients can’t be tested, they can discuss their symptoms with a healthcare professional and receive tips for self care and quarantine. 

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