News Briefs

Tuesday Morning Corp. has secured additional financing to help it continue to operate through the bankruptcy process.

The struggling off-price home goods retailer, which filed for Chapter 11 in February, has received $12.5 million in debtor-in-possession (DIP) financing from 1903 Partners together with its affiliates, Gordon Brothers. The new financing from Gordon Brothers brings Tuesday Morning’s total DIP commitments to $27 million.

“After careful deliberation, we have determined that partnering with Gordon Brothers offers Tuesday Morning the best opportunity to save jobs, serve customers and maximize value for the estate,” said Andrew Berger, CEO and director. “Notably, this DIP clears the path for the company to continue transforming our operations through the bankruptcy process. In addition to providing liquidity, partnering with Gordon Brothers will allow us to leverage the team’s deep knowledge and experience in the retail sector.”

Tuesday Morning, which has 487 stores in 40 states, has said it plans to close locations in low-traffic regions while allocating the proper resources to remaining stores in high-traffic region during the restructuring process.

“We are proud to partner with Tuesday Morning through these Chapter 11 proceedings and are confident in Andrew and the leadership team’s ability to minimize disruptions to operations as they work to emerge from bankruptcy as a viable business,” said Kyle Shonak, transaction team and head of North America lending at Gordon Brothers. “The entire Tuesday Morning team has our financial and operational support.”

Munsch Hardt Kopf & Harr, P.C. is serving as the company’s legal advisor. Piper Sandler is serving as the retailer’s investment banker.

The specialty fitness retailer is opening 17 retail stores, as well as a commercial sales and service division, throughout major metro markets in Texas. (Johnson Fitness & Wellness is the retail division of Johnson Health Tech.)

The 17 new stores will occupy former MyFitnessStore.com retail locations in the communities of Arlington, Austin, Dallas, Fort Worth, Friendswood, Frisco, Houston, Lewisville, Plano, San Antonio, Southlake and Spring, Texas.

The new Texas sites increase the number of Johnson Fitness & Wellness stores to 114 in the United States, and another 364 stores globally. Each store offers a deep assortment of premium fitness and wellness equipment, including treadmills, ellipticals, stationary bikes, home gyms, and accessories, from brands such as Matrix Fitness, Vision Fitness and Horizon Fitness.

"We are thrilled to enter one of the largest home and commercial fitness markets in the U.S. to expand our premium offerings to new customers," said Bob Zande, president of Johnson Health Tech Retail. “The experienced team we have assembled share the same passion as Johnson Fitness & Wellness for providing a customized shopping experience, along with a high level of service and support, to our customers."

Three JFW distribution centers in Dallas, Houston, and San Antonio will support operations, logistics, and customer support for the new markets.

Commercial Fitness provides fitness solutions across hospitality, corporate, medical, multi-housing, gym and fitness centers, and education markets nationwide.

Taiwan-based Johnson Health Tech, is among the world's largest and fastest-growing fitness equipment manufacturers, with brands that include Matrix Fitness, Vision Fitness, and Horizon Fitness. The company manufactures a wide assortment of fitness equipment for both commercial and residential use.

Higher prices took a big toll on U.S. consumers last year.

Consumers in the United States spent an extra $1 trillion on goods and services due to increased prices in 2022, according to an analysis by Forrester.

Inflation impacted serval personal consumption expenditures (PCE) categories, the firm noted, including. Of the $1.1 trillion attributed to increased prices in 2022, consumers paid $468 billion extra due to increased prices of goods and $636 billion extra due to increased prices of services.

Here’s the impact of inflation across other PCE categories:

• Nondurable Goods: The impact of inflation was very evident in the categories of gasoline, food, and beverages. Consumers paid $121 billion more due to increased prices of gasoline and other energy goods in 2022.

• Durable Goods: Motor vehicles and parts, furnishings and durable household equipment saw the largest increase in prices, with consumers paying $72 billion and $46 billion extra, respectively for these two categories alone. 

Recreational goods and vehicles saw deflation. The prices of televisions, other video equipment and information processing equipment declined instead of increasing.

“Spending growth in these categories was volume-driven, not inflation-driven,” stated Jitender Miglani, senior forecast analyst, Forrester.

Restaurants benefitted from increased spending in February as consumers focused on experiences.

U.S. retail sales (excluding automotive) were up 6.9% year-over-year in February, according to Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment. (Mastercard SpendingPulse reflects nominal spending and is not adjusted for inflation.)

Experiences were a top priority in February. Spending on restaurants increased 14.2% year-over-year, while airline spending was up 14.2% and lodging spending jumped 42.7%.

“This reflects suppressed growth in 2022, as well as continued demand for travel and experiences ahead of the popular spring break season,” noted Mastercard SpendingPulse.

E-commerce sales increased 13.2% year-over-year as winter weather activity in many parts of the country kept consumers inside. In-store sales were up 5.5%. By comparison, in-store sales increased 8.9% in January.

The apparel and department store sectors showed moderate growth during the month. Year-over-year department store sales were up 5.6%; sales at apparel stores rose 3.9%.

"Retail spending continued to grow at a steady rate compared to 2022,” said Michelle Meyer, North America chief economist, Mastercard Economics Institute. “The consumer remains supported by robust labor market conditions with some added cushion from savings.”

A former Twitter executive will head up diversity efforts at Nike.

James Loduca is joining the athletic apparel and footwear giant as chief diversity, equity & inclusion officer. Most recently, from November 2021 to January 2023, he served as VP, inclusion, diversity, equity and accessibility at Twitter.

Loduca announced the appointment on his LinkedIn page.

“In an increasingly polarized time, sport is one of the few things that still brings us together,” he wrote in the post.

Prior to joining Twitter in 2017, Loduca was chair, San Francisco Human Rights Commission, which played a lead role in navigating the city's response to the COVID-19 pandemic in 2020. Before that, he was director, equality at Salesforce.

Loduca is the fourth person to fill the chief diversity role at Nike since 2020. He replaces Jarvis Sam, who left in February after six months in the position to head up his own multi-services DEI firm, The Rainbow Disruption.

Nordstrom is winding down its operations in Canada — and expanding its outlet banner. 

The upscale department retailer revealed the move in its fourth-quarter earnings release. As of January 38, there were six full-line Nordstrom stores and seven Nordstrom Rack stores in Canada, as well as a dedicated website.

Nordstrom Canada will wind down its stores across the country with the help of a third-party liquidator and its Canadian e-commerce platform. The in-store wind-down is expected to be completed by late June 2023.

Nordstrom Canada represents less than 3% of total company sales. The retailer said it expects to see a $400 million decline in total net sales as a result of leaving Canada.

“We entered Canada in 2014 with a plan to build and sustain a long-term business there,” stated CEO Eric Nordstrom. “Despite our best efforts, we do not see a realistic path to profitability for the Canadian business. This decision will simplify our structure, intensify focus on our growth and profitability goals and position us to create greater value for our shareholders."

Nordstrom reported net earnings of $119 million, or $0.74 per diluted share, for the quarter ended January 28, from $200 million, or $1.23 per share, in the year-ago period. Analysts had expected earnings per share of $0.66.

Net sales fell to $4.200 billion from $4.382 billion. Net sales decreased 2.4% at Nordstrom and 8.1% at Nordstrom Rack. Digital sales decreased 13.1%.

“We took decisive actions to right-size our inventory as we entered the new year, positioning us for greater agility amidst continuing macroeconomic uncertainty,” said Eric Nordstrom. “As we enter fiscal 2023, we are focused on enhancing the customer experience, improving Nordstrom Rack performance, increasing inventory productivity and continuing to advance our supply chain optimization initiatives.”

The retailer attributed Rack’s recent declines to its decision to end its policy of fulfilling online orders from stores. On the company's earnings call, Eric Nordstrom said the company is committed to improving  Rack's performance via efforts that include prioritizing 100 nationally recognized brands to help drive sales and grow market share and opening 20 new stores.

"Rack stores continued to be our largest source of new-customer acquisition, accounting for more than 40% of newly acquired customers in 2022,” he told analysts. 

As previously announced on February 28, the board of directors declared a quarterly cash dividend of $0.19 per share to be paid to shareholders of record at the close of business on March 14, 2023, payable on March 29, 2023.

During fiscal 2022, Nordstrom repurchased 2.8 million shares of its common stock for $62 million under its existing $500 million share repurchase program. A total capacity of $438 million remains available under this share repurchase authorization.