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Shares in British e-commerce giant The Hut Group surged on Friday on speculation it could be sold.
The group is reportedly being circled by private equity firms potentially looking to buy the business, according to a Betaville blog post.
Advent International and Leonard Green are two firms understood to be exploring a buyout.
Shares in the group were up 16 percent on Friday following the report. They were back down 6 percent as of 10:00 GMT Monday morning.
It comes after the group’s shares plunged over 82 percent over the past year amid concerns over its corporate governance.
In the year to December 31, THG reported record revenue of 2.2 billion pounds, up 37.9 percent compared to last year and up 95 percent compared to two years ago, prior to the outbreak of the pandemic.
But the group also warned that its profits margins are expected to fall below analysts’ expectations.
It said EBITDA margin is expected to be in the range of 7.4 percent to 7.7 percent, compared to market expectations of around 7.9 percent.
Shares fell further following the trading update.
Handbag resale platform Luxury Promise will announce this week that it has raised £8 million ($11 million) in a Series B funding round, according to a Sky News report.
The funding round is reportedly led by venture capital firm Beringa, whose portfolio includes Papier, the direct-to-consumer personalised stationery brand and EDITED, the retail and data analysis platform. The firm already led a £3 million fundraising round for Luxury Promise last year.
The new funding will reportedly be invested in the platform's live shopping events, to expand them across other time-zones and languages.
Investment is also coming from former Jimmy Choo chief executive Pierre Denis and Francois Delage, the ex-CEO of De Beers. Including the latest investment round Luxury Promise has raised almost £15 million pounds.
Luxury Promise was founded in 2017 by Sabrina Sadiq as a platform to sell and swap designer handbags. Based in London, it also operates in Dubai and has since expanded into other categories including shoes, accessories and clothing. It also offers authentication and repair services.
After training as a lawyer Sadiq opened her own consultancy business training staff at resale firms to authenticate luxury bags. With these expertise she started Luxury Promise, which today uses artificial intelligence to authenticity check and host scheduled live shopping events.
Ermenegildo Zegna is ending the financial year on a high note. The Italian luxury menswear group, which has just recently gone public on the New York Stock Exchange, showed a 27% growth in 2021, with a turnover of €1.29 billion. According to its preliminary annual results released by the company on Tuesday, the brand is fast approaching its pre-pandemic level, registering a decline of only 2% compared to 2019. CEO Gildo Zegna also took this opportunity to announce that the fashion house will no longer use real fur.
He explained the decision in a press release: "Part of Zegna's philosophy since its founding in 1910 is the belief that creating products of the highest quality goes hand in hand with respect for the natural world around us. Based on these values, the Zegna Group has decided that the 2022 collections will be the last to use fur for Zegna and Thom Browne," which are the two Ermenegildo Zegna Group brands.
The Zegna fashion house accounts for nearly 66% of the total revenues of the Piedmont-born group, Thom Browne accounts for 20%, while the rest of the revenues come from the group's textile activities. Last year, Zegna saw its sales jump 33% to €847.3 million, while remaining below its 2019 level (-8%). These positive results are largely due to the company’s strong sales growth in its shoes and leisurewear departments. For several seasons now, creative director Alessandro Sartori has been working in depth on modernizing the brand's classic pieces in order to deliver a younger, more versatile and casual product range.
Thom Browne posted even better financial results, recording "an exceptional performance" with a jump of 64% compared to 2019 and 47% over last year, to €263.3 million. Its direct sales more than doubled (+127%) compared to 2019 (+63% over 2020) with a revenue increase much more pronounced than just its scope for growth, which saw the brand grow from 28 monobrand stores in 2019 to 52 in just two years’ time.
The group's textile revenues also saw a double-digit growth (+17%, but -6% vs. 2019) at €102.2 million.
Ermenegildo Zegna Group’s sales increased across all regions except Japan, where they fell by 10% due to the country’s drop in tourism and ongoing Covid-19 restrictions. Sales in North America jumped 46% to €191.2 million, due in large part to a strong financial performance in the United States, where revenues rose 53% year-over-year.
Positive results were also seen in Asia-Pacific (+26%), at €696.3 million, the group's main market with a 54% share. Sales soared in the Greater China Region (+34%), which alone accounts for almost half of the company's total revenues. This is due to the repatriation of Chinese domestic luxury goods spending and the strong presence of the Zegna brand in the country since the last 30 years.
In the EMEA region, which accounts for 29% of the group's total revenues, sales climbed by 20% to €380 million. This increase was driven by Italy’s financial rebound, indicating a clear recovery to its 2019 pre-pandemic level, and by the exceptional performance in the United Arab Emirates, particularly in retail.
The direct sales channel, which currently accounts for 66% of total revenue (up from 61% in 2019), garnered a 39% growth in 2021 (+6% vs. 2019), while the wholesale channel saw a 14% increase (-11% vs. 2019). While Zegna has initiated "a major rebranding" and refocused its sales on the direct channel since 2019, "its growth has been strong, a sign of a positive response to the brand’s market redefinition strategy," stated the company.
As little as five years ago, the thought of Africa becoming a place in which international tech giants would inject large amounts of capital, where unicorns and “soonicorns” could grow and flourish, and where talent would be not only in hot demand, but flocking to the action, was almost unimaginable.
In the current day, however, Africa is a veritable playground of tech innovation activity.
Take the story of fintech scaleup Stripe. Picking up $600m (£445m) of funding in early 2020, the US-based company swiftly made its biggest acquisition to date with Paystack, a Nigerian payment-processing startup that already has over 60,000 corporate clients.
Despite the deal representing the largest startup acquisition to ever come out of Nigeria, it is no anomaly. Nor is the US alone in its penchant for Africa.
Just a few months later, DiDi Global, China’s answer to Uber, spotted South Africa as a launchpad for its African ambitions. It later piloted its ride-hailing app in Cape Town, and officially kicked off operations in the city, with over 2,000 drivers and 20,000 local users downloading the app in its first two months.
From acquisitions we turn to local players, and it is important to note here the diversity of profiles seen in Africa’s home-grown unicorns, both in terms of location and in terms of sector.
Thinking of Africa, we often picture its unbanked masses (over 50% of the population) and are perhaps too quick to assume that fintech is one of the very few sectors that may see unrivalled success here. Fawry, Egypt’s first electronic payments company to be valued at over $1bn, is an obvious illustration.
While it is true that in 2020 fintech dominated the investment space, gaining 25% of the total capital raised in Africa, the 2020 Partech Africa Report also shows that there are six main verticals that attracted over $100m (£74m) in equity funding in 2020, and plenty more that secured smaller amounts of funding.
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New Look has published a Sustainability Strategy Update that includes a commitment to become climate positive by 2040, as well as reducing greenhouse gas (GHG) emissions from products by 50% by 2030.
A key pillar of the value fashion retailer’s ‘Kind to Our Core’ initiative, the update is part of its three-year business strategy “reflecting the values and actions that the retailer wants to embed across its business, in its efforts to deliver against ambitious ESG targets”.
Within the new update, New Look said it has committed to a “wide-reaching range of measures” centred around four core pillars: Responsible Business, Responsible & Circular Product, Inclusive Culture and Positive Local Impact.
CEO Nigel Oddy, said: “Environmental and social responsibility has been a part of our business for over 20 years. Now, as a leading womenswear retailer with a global footprint, acting sustainably has never been more important to us. We are proud of our achievements to date, but our strategy refresh commits to going further and outlines our ambitions for the future.”
New Look also said the strategy offers updates on progress made so far against previous commitments and outlines a comprehensive set of new targets to offer transparency to all stakeholders.
Rapid delivery startup Zapp has raised $200m (£149m) in a Series B funding round to “focus on achieving profitability” in existing markets and to launch into new ones.
Lightspeed, 468 Capital and BroadLight Capital led the investment into London-based Zapp, which aims to deliver everyday items to customers’ doorsteps within 20 minutes at any time of day.
Atomico, Burda and Vorwerk Ventures also participated in the round, along with Formula One driver Lewis Hamilton.
It brings Zapp’s total funding to $300m. The company did not disclose its valuation.
Zapp will use the notable capital injection to compete with rivals such as Getir, GoPuff and Gorillas in the burgeoning rapid delivery market.
Founded in 2020 by Jo Falter and Navid Hadzaad, Zapp stocks thousands of items in micro-fulfilment centres known as “Zappstores”.
Consumers use the Zapp mobile app to make spontaneous purchases such as last-minute snacks and hygiene products.
Zapp’s riders collect and deliver orders via electric bikes, with the service available 24/7.
The startup said it will also use the funding to invest in its customer experience and technology.
Zapp’s strategy is to target so-called “megacities” where densely populated urban areas provide sufficient order volumes in an industry where margins are often razor-thin.
The convenience retail startup started with one Zappstore in West London but has since expanded across the UK and beyond.
In August last year, Zapp opened a fulfilment centre in Manchester and has dozens of Zappstores across the UK, including a 25,000 square foot distribution centre it opened in London last year.
The startup has also expanded internationally with an Amsterdam launch in July 2021.
“We’re on a long-term journey to build a technology-enabled supply chain that can deliver thousands of products to hundreds of millions of customers around the world faster and more sustainably than any other supply chain can today,” said Joe Falter, co-founder of Zapp, in an announcement on Friday.
“With this new capital, we will focus on achieving profitability in our existing markets as well as bringing Zapp to new customers globally.”
Pandemic-induced stay at home restrictions have turbocharged the growth of rapid delivery startups. This has led to a market flush with investor cash that’s helped delivery startups keep prices low.
Berlin-based rapid delivery startup Gorillas raised “close to” $1bn in October, giving it a $2.1bn valuation just one year after it was founded by CEO Kağan Sümer.
And in October last year, Turkey-headquartered rapid delivery startup Getir acquired UK rival Weezy, suggesting that market consolidation may be vital for smaller players to survive.
Some, including the CEO of Ocado Retail, are sceptical about the economics of rapid on-demand delivery. There also remains the question of whether consumer habits picked up during the pandemic will last now that the UK is free from restrictions.
But Zapp’s latest funding shows investors are still bullish on rapid delivery and that they see a place for the service post-lockdown.
“Convenience retail is one of the last segments of retail to move fully online, but is really having its moment post-lockdown,” said Rytis Vitkauskas, partner at Lightspeed Venture Partners. “As people return to their busy lives, rapid delivery allows them to ‘live in the moment’ and Zapp has been built from the ground up to harness this consumer behaviour and is seeing exceptional customer loyalty as a result.”
FourthRev, a London, UK-based online education company, closed an $8m Series A funding.
The round was led by Educapital, with participation from Reach Capital, Emerge Education and Danner Capital as well as a number of edtech entrepreneurs and executives.
The company intends to use the funds to develop and promote more Career Accelerators focused on key areas experiencing the most acute digital skills shortages such as cybersecurity, AI, analytics, UI and project management skills, as well as double headcount worldwide, expanding operations in the UK, Australia, South Africa and North America.
Led by Jack Hylands, FourthRev has created a new category of education called Career Accelerators to tackle digital skills gaps globally. Its programs lead the way in employer-university collaboration by combining university education with job-focused technical education. The company brings together globally recognised universities, such as the London School of Economics and Political Science (LSE) and now King’s College London, leading technology companies such as Tableau and Github and industry employers such as Thoughtworks and Robert Walters to design globally relevant programmes.
The first FourthRev Career Accelerator in Data Analytics which is currently underway is a six-month program that will train students from a range of different backgrounds and disciplines to develop holistic data analysis skills. It has been designed and developed by LSE’s Departments of Statistics and Department of Methodology, in collaboration with partners to ensure outcomes align with current industry demand. The program will introduce core concepts of data-handling and analysis and will incorporate real-world projects to allow students to apply and challenge their knowledge in authentic business scenarios.
Farfetch announced a big move on Friday as it revealed that it’s to acquire US-based luxury beauty retailer, Violet Grey, for an undisclosed sum. And it also said the acquisition comes ahead of the launch of the Beauty category on the Farfetch Marketplace, which is scheduled for later in the year.
Violet Grey has built up a reputation as a content destination as well as a place to buy beauty products and is known as a launchpad for brands.
Farfetch said its new buy has “a devoted community who love the brand for its expertise and the trust they’ve built amongst customers”. It added that the acquisition “brings industry expertise as well as a curated selection of products to be offered on the Farfetch Marketplace, and expands the beauty curator’s reach to extend to [our] global customer base”.
Violet Grey will also leverage the Farfetch Platform Solutions’ “expertise in technology, global logistics and operations in continuing to drive its standalone business, comprised of VioletGrey.com and its Los Angeles retail store”.
The purchase allows Farfetch to add on a ready-made beauty business as it expands its operation into the sector and to draw on the expertise of Violet Grey founder, Cassandra Grey, who will become a global advisor for Beauty on the Farfetch Marketplace.
She’s also been designated co-founder of NGG Beauty “where she will work to incubate and accelerate new brands” and will be Chair of Violet Grey, “providing overall strategic and creative direction and continuing to build the community that Violet Grey is known for”.
Farfetch is also adding a seasoned exec from within its own team with Niten Kapadia, previously VP Operations, taking the role of Managing Director for Violet Grey.
As mentioned, Farfetch is — like other luxury and mass-market e-tail giants — embracing beauty as a key channel for growth and it said its beauty proposition will offer its “extensive Millennial and Generation Z luxury audience a unique experience for discovering and shopping for beauty. It will allow customers to access insights and expertise from multiple beauty experts and communities, including the Violet Grey community”.
For brand partners, its expansion into beauty also “provides an opportunity to reach [its] millions of engaged luxury customers through co-branding and marketing opportunities to target the global luxury beauty market, estimated to be almost $69 billion and the second largest category within the global personal luxury market, after leather goods, and ahead of apparel”.
Stephanie Phair, Chief Customer Officer at Farfetch, said: “The acquisition is an important step ahead of the launch of beauty and will form part of our overall beauty strategy ‘palette’. Our aim for beauty is to provide the world’s most expansive, curated edit of the best products to serve customers across ages, races, cultures and genders in an ‘Only on Farfetch’ way.
“We’ll be able to show our customers an immersive crossover between fashion and beauty, leveraging our innovation capabilities to offer exciting features for our customers. Farfetch will bring together niche and global brands to transform the beauty retail experience, creating an environment that offers beauty without boundaries.”
Swedish “buy now, pay later” company Klarna has launched a physical bank card in the UK that will allow people to delay payments for up to 30 days at high street stores as well as online.
The fintech company said that 400,000 people in the UK had already signed up for the Klarna Card, which is powered by Visa.
It means UK customers will be able to use Klarna’s buy-now-pay-later (BNPL) service – previously only available at checkout online – in physical stores.
Klarna said it intends to add more payment options to the card in future, such as splitting purchases into three monthly payments.
The Klarna Card, available in pink or black, is already available in Sweden and Germany, with plans to launch it in the US.
“Consumers are rejecting credit products which charge double-digit interest rates while allowing repayments to be put off indefinitely,” said Alex Marsh, head of Klarna UK. “For online purchases where credit makes sense, buy now pay later has become the sustainable alternative with no interest and clear payment schedules.”
BNPL products are not currently regulated in the UK but the government is currently conducting a review into the sector due to the risk of potential harm to consumers.
Klarna was founded back in 2005 by Niklas Adalberth, Sebastian Siemiatkowski, and Victor Jacobsson. The platform offers ecommerce payment solutions for merchants and shoppers.
Klarna surpassed a $30bn valuation in February last year and has most recently been valued at $46bn. It has been backed by investors including Sequoia Capital, Dragoneer, Bestseller Group, Permira, Visa, Atomico and Ant Group, among others.
Ian Bradbury, CTO of financial services at Fujitsu UK&I, said: “Digitally native apps continue to infiltrate the online and offline space, and force traditional banks to innovate and update their historically dated services.
“However, it’s vital that BNPL schemes are transparent and work with leaders in the sector to introduce safety measures, and further regulation if necessary, to avoid millions of UK shoppers taking on debt from delayed payments.”
- Amazon on Thursday announced the launch of its first physical clothing store, dubbed Amazon Style, according to information sent to Retail Dive. The store will open later in the year at The Americana at Brand in Los Angeles and will feature women's and men's apparel, shoes and accessories.
- Customers can use the Amazon Shopping app to scan a product's QR code to access information including sizes, colors and ratings. Items can then be sent to a fitting room or directly to the pickup counter.
- The company will use its fulfillment centers to frequently update store merchandise, and customers can shop "millions" of apparel items on Amazon's website to be delivered directly to the Amazon Style store.
By merging online and offline operations through the company's latest store concept, Amazon apparel shoppers won't have to guess about fit.
Amazon Style brings technology to the forefront, primarily by using its app to allow customers to direct a personalized shopping experience. The app allows users to access products, send items to a fitting room and provide personal information that allows for real-time recommendations and in-store deals.
Moreover, items that are scanned in the store will be saved in the shopping app so customers can revisit their selections and make purchases at a later time.
Understanding fit while shopping for apparel online has been an e-commerce friction point, and that has become especially apparent as returns continue to be costly for retailers. According to Coresight Research survey findings, clothing made up 46.5% of returns. Bracketing, where shoppers buy multiple sizes, colors or styles of an item, knowing they will return some of what was purchased, has become a common purchasing strategy for consumers.
And those costs add up. A report earlier in January from RetailMeNot said that 38% of shoppers plan to return holiday gifts this year, and UPS announced it anticipates handling more than 60 million return packages during its peak shipping season (Nov. 14 through Jan. 22), an all-time high for the company.
But, Amazon's apparel store concept allows customers the benefit of the e-retailer's deep inventory, again by using tech.
"Amazon Style uses the same technologies and processes as Amazon's fulfillment centers to store more items that can be delivered from back-of-house to customer within minutes," the company said in a FAQ about the store concept. Other tech used at the physical location includes inventory management systems, customer service technology and Amazon One for checkout.
Through Amazon Style, the e-commerce giant will be testing a variety of innovations, which could challenge department stores and other mid-market retailers, according to Neil Saunders, managing director of GlobalData. That includes, he says, examining if it can become more well known in fashion, widening its customer base and gleaning knowledge about shopper behavior.
"It will also give Amazon more data and insights which may elevate its efforts in the apparel space," Saunders said.