November 2020 Monthly News Roundup
By TRAUB On December 02, 2020
We are pleased to share with you our roundup for November 2020. This month we highlight brands changing business strategies, brands focusing on actionable sustainability initiatives and the continued urge to blend offline and online.
This month, we explore the actionable changes businesses are implementing based on how consumers' behaviors and priorities have shifted throughout the pandemic and the new opportunities and partnerships that have emerged.
The public and private markets were stable in November with some in the fashion and electric vehicle industries filing IPOs. In the fashion industry, the German e-commerce company, Mytheresa, planned to seek a valuation of about $1 billion to $1.5 billion, which could possibly change based on its holiday period performance. Arrival, a startup developing electric trucks and buses announced that it would go public with a deal that would value that startup at $5.4B. This month, one of the most noteworthy deals in luxury e-commerce was the Farfetch-Alibaba-Richemont mega-deal. In an effort to dominate China's online market, Farfetch announced that it will form a joint-venture in China with Alibaba. Alibaba and Richemont have each invested $300M in Farfetch and an additional $250M each in the new Farfetch China joint-venture. Additional show of support for the new deal came from the Pinault family, owner of French powerhouse Kering, who also invested an additional $50M in Farfetch. This deal solidifies Farfetch as a leading player in the online luxury market and could also mark consolidation in the space which would, perhaps, allow for a shared e-commerce platform where brands could maintain control of how their products are displayed. Another interesting acquisition to hit the streetwear sector was VF Corporation's acquisition of streetwear giant Supreme in a $2.1B deal. Premium Apparel, a unit of private equity firm Sycamore Partners, also made headlines by acquiring Ann Taylor, Loft, Lane Bryant, and Lou & Grey for $540M, marking the latest in a string of pandemic-era fashion deals. Other impressive acquisitions this month included Nestlé's acquisition of subscription meal service Freshly for $850M, delivery startup goPuff's acquisition of BevMo for $350M, Spotify's acquisition of podcast hosting company Megaphone for $235M, investment firm Francisco Partners' acquisition of MyFitnessPal from Under Armour for $345M, and Snap's acquisition of AI company Voca.ai for $120M. Notable investments this month included: Ambani's Reliance Retail ($1.5B), autonomous delivery company Nuro ($500M), unicorn Hippo Insurance ($350), new player in the digital marketplace space Heyday ($175M), Vimeo ($150M), St. Louis-based foodtech company Benson Hill ($150M), service that keeps food fresh Afresh ($100M), clinical trials research company Medable ($91M), tech education company Udacity ($75M), patient engagement company Well Health ($45M), language learning app Duolingo ($35M), wearable device brand Kinetic ($11.25M), and wellness platform Paceline ($5M).
A Change in Business Strategies
The last couple of months have significantly altered consumer behavior and the ways in which people purchase goods. Due to this sudden change, many brands have decided to pivot their business strategies to accommodate their consumers and meet them where they are. This month, premium denim brand, J Brand, announced its pivot from selling in department and specialty stores to a direct-to-consumer model. This move aims to bring vitality and focus back to the celebrated denim brand. Direct-to-consumer brand Casper also made a significant change to its strategies by taking its mattresses offline. Although Casper already operates 60 stores, the darling in the direct-to-consumer space continued to enter the physical market by inking a deal to sell its products at Nordstrom in hopes of placing its products in front of a new set of consumers. Beauty giant Ulta Beauty recently announced its decision to open 1000 square feet makeup and skincare shops inside of Target stores. This announcement was met with positive sentiment as shares of Ulta grew about 7% to $265.49 and shares of Target grew about 2% to $158.07 following the news.
The Urge to Blend Offline and Online
While e-Commerce orders have skyrocketed throughout the pandemic, uncertainty remains around whether purchase behaviors will change. Pushed by the circumstances, many businesses have turned to new digital methodologies and tools in order to regain or retain consumer interest. After showing its Summer 2020 collection via a music video, Balenciaga announced this month that it will present its Fall 2021 collection through the video game "Afterworld". Set to be released on December 6th, this game will offer players a chance to play the game while also exploring the new collection. Bloomingdale's also turned to digital methods to engage shoppers through its 'on screen' series, a collection of virtual events intended to mimic the aura of in-store events. The virtual experiences and events trend is set to become a mainstay in the fashion industry, music industry, and beyond with Tencent Music Entertainment's backing of Wave, the virtual concert platform that will help bring more virtual concerts to China.
The Continued Focus on Actionable Sustainability Initiatives
Over the span on the pandemic, consumer interest in corporate social responsibility and sustainability has never been higher and the pandemic has reinforced the importance of this across industries. This month, brands continue to focus on their shared goal to improve sustainability within their organizations via new initiatives. Big-box retailer Walmart announced that, starting next year, some of Walmart's grocery deliveries would be dropped off at consumers' homes via electric-powered and driverless cars. This move would further two of the retailer's goals: 1) to get customers what they need quickly and 2) to move closer to the zero emissions by 2040 target. In a recent meeting, Walmart executives announced that the project would kick-off with a pilot program with Cruise, General Motor's electric vehicle arm. LG Electronics (LG) and Net-a-porter have also taken measures to further their sustainability efforts by offering a limited-edition line of environmentally responsible garments. The capsule collection will be part of Net Sustain, Net-a-porter's platform made to help consumers reduce fashion waste.
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