Boston – Speaking at a retail conference here recently, Casper CEO Emilie Arel said the direct-to-consumer mattress and sleep accessories brand is focused on becoming profitable.

According to a story by Retail Dive, Arel told the group at eTail’s annual conference in Boston that the company is no longer “in the business of not making money anymore.”

During the event, Arel highlighted a number of cost-cutting initiatives, including the company’s decision to pull back on its planned store opening. She said the company is focused on controlling costs, cutting its marketing spend and zeroing in on its core product – mattresses – and slowing its store expansion plan. Last year, the company had said it would have 200 company-owned stores in North America.

Arel told the conference that the 73 stores currently in operation would be enough for at least a year as the company embarks on a “culture of frugality.”

The company, which filed its initial public offering in 2020, struggled to turn a profit. In 2021, Arel was named CEO of the company, and with its third quarter earnings report, Casper announced it would be taken private by Durational Capital Management.

The deal was sparked by challenges, including supply chain woes that arose during the pandemic, a miscalculation on its marketing budget and ongoing struggles to become profitable.

See also:

• Blog: Will Casper’s next step make the difference?
• People to Watch: Emilie Arel, Casper

New York – Seven leading volume retailers with combined annual home textiles sales of $17.6 billion will report their second quarter results this week. Here’s a quick hit list of what to look for.

Walmart: Reports 8/16. Home textiles sales = $7.1 billion

A month ago, Walmart cut its full-year guidance, saying the slowdown in general merchandise sales that began in Q1 was still ongoing, thus causing more markdowns than it had planned for. Earlier this month, Walmart laid off more than 200 headquarters staff as part of a restricting in the home office. Are things looking any rosier for the bellwether retailer?

Target: Reports 8/17. Home textiles sales = $4.2 billion

A rapid shift in the sales mix during Q1 left Target overloaded with inventory in categories like home, and it began planning more conservatively in discretionary categories. But Target is also a big destination for Back-to-Campus, especially dorm essentials. Its investor update this week should provide an early read on the season.

TJX Cos: Reports 8/17. Home textiles sales = $3.5 billion

The blistering pace of growth at TJX cooled down in Q1. Comp at HomeGoods declined 7% on top of a 40% increase in the year-ago quarter, and the home department comp at Marmaxx was off at a similar pace. However, the overall home business was described as very healthy and execs said shoppers were taking price increases in stride. We’ll find out on Wednesday whether that’s still the case.

Kohl’s: Reports 8/18. Home textiles sales = $1.5 billion

In early July, Kohl’s announced that business was even softer than it had anticipated and adjusted its expectations down accordingly. In home, where Q1 sales tumbled 17%, Kohl’s said it would pursue ancillary growth in home décor categories where it has relatively little share. We could get more insight on those plans this week.

Ross Stores: Reports 8/18. Home textiles sales = $1.3 billion

The off-pricer received its second quarter home goods imports earlier than expected, and with demand for the home category declining, Ross stored them in packaway and planned to flow them later this year. Ross execs said they expected sales and profitability to improve over the course of the year. We’ll learn this week if the there are any signs that the tide has begun to turn.

Home Depot and Lowe’s: Report 8/16. Combined home textiles sales = $1.17 billion

Home Depot kicked off the year with a strong Q1 performance as DIY customers continued to trade up for better-quality home improvement products. Execs were feeling optimistic about medium-to-longer term  demand. Lowe’s wasn’t as lucky, with first quarter sales down 4% on what the home improvement retailer attributed to unseasonably cooler spring temperatures, although sales trends began improving in May. The question: How will the outlook each shares this week be impacted by the flattening house market?

Chicago – Though the payouts may be relatively meager, some relief could be coming for suppliers left holding the bag when Sears Holdings filed for bankruptcy four years ago.

Last week, Sears Holdings and its one-time creditors said they have reached a settlement, according to multiple reports. The $175 million settlement arose from a suit against former CEO and majority owner Eddie Lampert and other investors, who plaintiffs accused of steadily stripping assets from the company in the years preceding its Chapter 11 filing.

The settlement requires approval from the federal bankruptcy court.

Retail Dive reports the Sears Holding settlement would be funded through three entities: $125.6 million from insurers, $41.9 million from the defendants and $7.5 million from shareholding funds.

What remains of Sears Holdings was acquired by Lampert-controlled Transformco in 2019. Although e-commerce operations continue, there are fewer than two dozen Sears and Kmart stores locations in operations today.

See also:

Kmart closes the last store in its original home state

Washington – The U.S. Bureau of Labor Statistics Consumer Price Index for July 2022 showed that the all items index had no increase from June, but overall prices continued their inflationary track and increased 8.5% over the past 12 months. This was less than analyst expectations of 8.7% and better than the 9.1% increase in June.

The biggest contributor to the shift was the decrease in gas prices. The gasoline index fell 7.7% in July, and this decrease offset increases in the food and shelter indexes, resulting in the all items index being unchanged from June.

However, the food index continued to rise and increased 10.9% over the past year, the largest 12-month increase since the period ending May 1979.

The index for household furnishings and operations rose 0.6% after increasing 0.4% in June.

The Federal Reserve considers consumer price inflation as one factor in determining how much more it will be raising interest rates through the rest of 2022.

Related stories:

• Consumers cooler on home merchandise but still spending
• 3 key areas targeted as consumers shift spending priorities | Survey
• Why big purchases top consumers’ no-can-do lists these days | Charting the trends

London – Ocean container rates fell 3% this week to $6,430 per 40-foot container. This is the 24th consecutive weekly drop.

According to the World Container Index tracking indicator from shipping analyst Drewry, rates are down 32% over the same week in 2021. Rates are also down 38% from the peak of $10,3777 seen in September 2021.

The average composite index for the year-to-date is $8,113, which is $4,500 higher than the five-year average of $3,613.

Rates from Shanghai to Los Angeles fell 2% to $6,834. Numbers from Shanghai to New York are much higher at $9,749, though even that number is down 28% over last year.

Drewry expects the index to decrease in the next few weeks.

Related stories:

• It’s a ways off, but a longtime observer can see an ‘end game’ for ocean-shipping disruption

Lhi, Utah – Digital native bedding brand Purple Innovation attributed its second quarter net sales slide to five key things: pull-forward consumer demand and the economic stimulus in the prior-year quarter during COVID; shifting consumer demand, inflationary impact on consumer spending and the company’s reduced advertising spend.

The company’s net revenue for the second quarter ended June 30 dropped 21.1% to $144.1 million, compared with net revenue $182.3 million in the second quarter of 2021. The company’s wholesale revenue decreased 5.9% compared with the same quarter last year, while second quarter direct-to-consumer revenue dropped 29.8% when compared with the same period last year.

For the second quarter, the company reported a net loss of $8.3 million in the second quarter ended June 30, compared with net income of $2.6 million in the same period last year.

“We continue to make important progress improving Purple’s operational health despite increasing macro headwinds,” said CEO Rob DeMartini, who joined the company in December.  “The meaningful improvement in second quarter adjusted EBITDA compared with the first quarter on similar revenue underscores the work we’ve done since the start of this year right sizing our cost structure.

“While the continued shift in demand away from home-related categories and the impact of inflation on consumer discretionary spending is delaying our top-line recovery, we remain confident that our four strategic initiatives – operational excellence, brand elevation, channel development and accelerating innovation – are the right building blocks for delivering long-term profitable growth. We are moving forward focused on executing our plans and preparing the company to emerge from the current macroeconomic environment well positioned to accelerate growth and expand market share.”

Purple’s operating expenses were 42.3% of net revenue for the second quarter of 2022 compared with 46.1% in the year-ago period. The company said the decrease in operating expenses as a percent of net revenue compared with the prior year period was driven primarily by its intentional reduction in advertising spend to improve marketing efficiency and stabilize profitability and the restructuring of the marketing organization that occurred in the second quarter of this year. Advertising spend for the quarter was reduced $24.1 million, or 56% year-over-year and $4.9 million, or 20.6% from the first quarter of 2022.

Based on second quarter results and “the current macroeconomic environment”, the company is revising its 2022 outlook. Now, the company said it expects full year 2022 net revenue to be between $570 million and $590 million, compared with its prior range of $650 million to $690 million.

See also:

• Here are 3 ways Purple will expand its network of retail partners
• Purple’s new COO has this key mission

Washington – Fall and winter seasons are likely to see much lower import numbers at the country’s major container ports after a booming spring season, according to a Global Port Tracker report released Monday by the National Retail Federation, which reported earlier this month that they believe a recession in 2022 is unlikely, and Hackett Associates.

Despite the slow in imports, ports will likely see a net gain over 2021 numbers.

“Retail sales are still growing, but the economy is slowing down and that is reflected in cargo imports,” Jonathan Gold, NRF vice president for supply chain and customs policy, said. “Lower volumes may help ease congestion at some ports, but other ports are still seeing backups and global supply chain challenges are far from over.”

U.S. ports monitored by Global Port Tracker recorded 2.25 million Twenty-Foot Equivalent Units (TEUs) – one 20-foot container or its equivalent – in June. That was a 5.9 percent dip from May when there were 2.4 million TEUs.

The first half of 2022 finished with 13.5 TEUs, marking an increase of 5.5 percent year over year. But things aren’t as peachy for the second half.

“The heady days of growth in imports are quickly receding,” Hackett Associates founder Ben Hackett said. “The outlook is for a decline in volumes compared with 2021 over the next few months, and the decline is expected to deepen in 2023.”

See more:

• Container rates down 21% over last year, still way up historically
• How are U.S. ports faring after West Coast labor contracts expired? Experts weigh in

Based on Global Port Tracker’s projections, the second half of 2022 will be more of a roller coaster:

• July’s final numbers are expected to come in around 2.26 million TEUs, up 3.2 percent year over year.
• August is predicted to be 2.2 million, down 3 percent.
• September at 2.15 million, up 0.4 percent.
• October at 2.13 million, down 3.9 percent.
• November at 2.06 million, down 2.7  percent.
• December at 2.03 million, down 3 percent.

Those predictions would bring the second half of the year to 12.8 million TEUs – a 1.5 percent decrease from the same period last year. But 2022 as a whole will still fare better, projected to finish at 26.3 million compared to 2021’s 25.8 million.

New York – Sales are cratering and liquidity is under pressure, but Bed Bath & Beyond’s stock is soaring. Why?

Because self-styled “Reddit apes” and other social media traders are showering their attention on Bed Bath & Beyond, pushing BBBY shares up nearly 40% yesterday. Like GameStop and theater chain AMC, Bed Bath & Beyond is a current meme trader favorite – and its price has more than doubled in the past week.

“These investors are hoping to punish professional hedge funds and big institutional firms who have bet against these stocks by short-selling them. Short sellers profit when a stock goes down,” according to a report from CNN Business.

BBBY stock opened at $8.16 on Aug. 8, quickly shot up to $12.24, peaked at $13.05 and closed at $11.41.

As of midday Monday, Bed Bath & Beyond was the most searched name on Reddit’s WallStreetBets discussion board, CNBC reported, citing Quiver Quantitative data.

One user on Reddit’s WallStreetBets discussion board said he or she had taken out a $27,000 loan to buy BBBY stock, and another claimed to have made $450,000 on Bed Bath shares using call options, according to CNBC.

The company last generated a positive sales gain in the first quarter of 2021, and sales declines have been running over 20% in each of the subsequent four quarters. Last month, Moody’s Investor Services whittled down Bed Bath & Beyond’s credit grade three levels to Caa2 on concerns that negative sales and profit trends would hurt the retailer’s cash flow, liquidity and debt.

Bed Bath & Beyond is reportedly seeking a liquidity boost from the private credit sector while it continues its search for a permanent CEO. Interim CEO Sue Grove said recently that the company will provide an update on its turnaround plan in late August.

See also:

Bed Bath & Beyond interim CEO: “We are working with urgency”

Bed Bath & Beyond reportedly seeking liquidity boost

Purchase, N.Y. – Spending increases in July outpaced monthly year-over-year growth seen so far in 2022, with demand and higher prices both contributing factors.

According to Mastercard SpendingPulse – which measures in-store and online retail sales across all forms of payment – U.S. retail spending excluding automotive increased +11.2% year-over-year in July, while retail sales excluding automotive and gas rose +9.0%.

Sales growth for furniture & home furnishings sector was up 5.0%, climbing off last year’s boom but still up a whopping 33.2% compared to July 2019.

Other key takeaways:

• In-store sales remained elevated – up 11.1% YOY and up 13.9% compared to July 2019.
• E-commerce posted its first month of double-digit sales growth since December, up 11.7% YOY.
• E-commerce was up nearly double pre-pandemic levels: +98.5% compared to July 2019. MasterCard attributed some of the growth to July’s major promotional events, which included Amazon Prime Day and piggyback sales offered by competitors.
• Travel spending was strong in July, with lodging up 29.6% YOY and airline sales up+13.3% YOY.

“The latest retail trends place an emphasis on consumer choice and passion driven spending – they’re hunting for deals, shopping across channels and ultimately still spending on experiences and goods that make them feel good,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. “As retailers grapple with excess inventory and supply chain constraints, it’s likely that the promotional activity seen in July will continue to be an important strategy for retailers.”

See also:

3 key areas targeted as consumers shift spending priorities | Survey

Economy headed toward recession? NRF says no

Englewood, Colo. – Qurate Retail Group has hired a new chief merchandising officer for QVC U.S. as part of its three-year plan to re-establish revenue stability, margin expansion and incremental free cash flow generation.

The corporation, whose businesses also include HSN U.S., Cornerstone Group, Zulily and QVC International, has hired a president for its streaming business as well.

It announced both executive additions this morning with the release of its second quarter results but did not reveal their identifies. That announcement will be coming soon, according to David Rawlinson, president and CEO of Qurate Retail.

Home category sales in the QxH division (QVC U.S. and HSN) fell 12% compared to a 3% drop in the year-ago quarter. Home accounted for 39% of QxH total sales, flat to last year’s Q2.

Q2 results by U.S. business:

• QxH: Total revenues down 12% to $1.989 billion. Operating income up 22% to $361 million.
• Cornerstone: Total revenues up 4% to $341 million. Operating income down 18% to $36 million.
• Zulily: Total revenues down 45% to $220 million. Operating loss of $51 million compared to an operating loss of $15 million in the year-ago quarter.

“Our second quarter results reflected lower demand driven by similar factors impacting all of retail including inflation, the war in Ukraine and rising interest rates, as well as supply chain challenges and downstream impacts from last December’s fire at our Rocky Mount, N.C. fulfillment center that affected our merchandise availability and operational efficiency,” said Rawlinson.

Total company revenues declined 16% to $2.95 billion. Adjusted net income was down 8.6% to $203 million.

See also:

Cornerstone home brands hit record highs

QVC/HSN/Cornerstone parent names David Rawlinson II president and CEO