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Inside Retail (Aug 9th, 2019)

Hi, Inside Retail readers!

There's a lot of buzz about how consumers are going to feel the impact of increased tariffs resulting from the trade war with China. You'll read below how the CEO of the parent company of Wrangler and Lee jeans is not concerned about tariffs.

But it's got me wondering ... Did you buy anything in advance of when the tariffs hit, or are you trusting that retailers will figure it out and not pass costs onto consumers? Hit reply and let me know!

– Cassidy

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1. Wrangler and Lee parent company Kontoor Brands beat analysts' expected earnings by $18.4 million for its first quarter as an independent company and is not concerned about China tariffs or a recession. CEO Scott Baxter said there is "extremely good value in the product we make" and felt a recession would "play into our favor." Wrangler is looking ahead to expand business in China and will launch on Alibaba next year. Here's a comparison between Levi's and Wrangler which suggests Wrangler may be better poised in the China trade wars but still has to address changing consumer preferences at home if it wants to keep growing. - CNBC

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2. As more than 50,000 people have signed a petition calling for Walmart to stop selling guns, the retailer is pulling what it considers violent video game displays in its stores. The WSJ reported that McMillon was "rethinking the company's role in gun violence." As the largest retailer in the U.S., Walmart also sells a majority of guns in America. McMillon's Facebook post highlighted his awareness that retail has crossed into political and social issues with the recent shootings. His words come as the company sent a memo to stores directing them to take "immediate action" to remove some video game displays. The move comes after President Trump blamed video games for increasing anger and rage in the real world, despite several studies (2019, 2018, 2016, 2015) suggesting there is no evidence that violent video games encourage real-life violence. McMillon said the company will work to understand the issues "that have been raised in the broader national discussion around gun violence." - REUTERS

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3. Pop-Up of the Week: Here's a Pomeranian named Ninja lounging rooftop at Tommy Hilfiger's staycation pop-up retail activation in Brooklyn, New York. The micro pop-up featured with DJs, a synchronized swimmer performance, massages, juice samples, and manicures and was part of the brand's initiative to reach consumers through hyper-localized events. There was also a retail shop that sold swimwear and accessories for seven hours.

If hyper-localized sounds familiar, it's because it's becoming a marketing buzzword. Earlier this week, Nike's COO Eric Sprunk said the company's purchase of data firm Celect will help it take a hyper-local strategy with DTC to get the right product to consumers faster.

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4. Popeye's has partnered with California fried chicken restaurant Sweet Dixie to pre-sell its new fried chicken sandwich there two days before the official national launch at the fried chicken chain. If Sweet Dixie selling Popeye's sounds familiar, it's because a customer saw boxes of Popeye's chicken outside the kitchen at Sweet Dixie's, and the restaurant admitted it sold Popeye's fried chicken as its own dish. #Popeyesgate was that scandal in Long Beach, California, two years ago. - ADAGE

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5. Kraft Heinz reported earnings for the first half of 2019 and revealed operating income fell 54.6 percent and revenue fell 4.8 percent over last year. The company lost over a quarter of its market cap since reporting. New CEO Miguel Patricio said the decline "is nothing we should find acceptable moving forward." The company has not figured out how to pivot from processed foods that built its empire to more organic and natural choices aligned with consumer preferences today. - CNN

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6. Texas-based women's fast fashion apparel retailer A'gaci filed for Chapter 11 bankruptcy and will close all 54 physical stores by the end of the month. It already shut down its e-comm site. A'gaci filed for bankruptcy last year and closed 26 stores at that time. A'gaci's bankruptcy underlines how the market has shifted away from teens going to the mall to shop for fast fashion. Rival fast fashion brand Charlotte Russe filed for bankruptcy in February citing low foot traffic and e-comm as challenges. - CHAIN STORE AGE

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7. Macy's will open 21 new Backstage off-price shops this weekend which have proven to be a cash cow for the department store. Comp sales for Macy's that have Backstage shops increase five points, and customers shopping in stores that have Backstage buy 40 percent more on average. Backstages opening this weekend include 4 in California, 4 in New York, 3 in Texas, 2 in Maryland, Virginia, and Pennsylvania each, and ones in CT, FL, MO, OR, KY, and AZ. Macy's will also open its first Backstage warehouse in Q3. - HOME TEXTILES TODAY

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8. Europe and Southeast Asia helped China's total exports rise in spite of the trade war with the U.S. There was a 3.3 percent rise over last year, which was a rally compared to the 1.3 percent decline in June when the trade war with the U.S. escalated. The U.S. expects imports to continue to remain level because "it isn't quick or easy for retailers to change their supply chains." - WSJ

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9. Luxury e-comm site Farfetch acquired New Guards Group, the parent company of hot streetwear labels including Off-White and Heron Preston, for $675 million. José Neves, CEO and Co-Chair, Farfetch, said in a release, “The addition of New Guards’ brand platform brings a creative and industrial dimension." He added that the acquisition "advances our vision of being the global platform for luxury, at the service of creators, curators and consumers, united for the love of fashion." - BUSINESS OF FASHION

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10. Lego made a "Friends" Central Perk collection to celebrate the show's 25th anniversary. The Central Perk set comes with 1070 pieces, of which 15 are coffee cups. Phoebe has a guitar, Rachel's hair is on point, and Chandler has his laptop. The set launches September 1 for just under $60. - GEEK

What nostalgic TV show would you like to see commemorated in Legos? Hit reply to let me know.

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Written and curated by Cassidy Mantor, a brand storyteller with a decade of retail marketing experience including in-house at Nike and Oakley. Occasionally she writes a “think piece” about fashion law for the American Bar Association. She is happy to be based in coastal Virginia except when there’s a hurricane. She can be found on LinkedIn.

Editor: Bobby Cherry (senior editor at Inside, who’s always on social media).

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