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U.S.-based private equity firm Nexus Capital Management will acquire 65% stake in Dollar Shave Club for an undisclosed price, while Unilever will retain the remaining 35%.

Dollar Shave Club is part of the minority of health and beauty retailers in the Top 1000 primarily targeting men. 

Unilever’s history with Dollar Shave Club

Dollar Shave Club launched in 2012 to immediate attention with a viral online marketing campaign. The retailer’s business was based on selling razors at a lower price than legacy competitors. It eventually expanded to include other shaving products.

At the time of the original acquisition, Unilever targeted Dollar Shave Club for its strong growth in the direct-to-consumer category.

“We plan to leverage the global strength of Unilever to support Dollar Shave Club in achieving its full potential in terms of offering and reach,” Kees Kruythoff, president of Unilever North America, said in 2016.

However, Dollar Shave Club wasn’t necessarily a fit with Unilever, the U.K.-based consumer brand manufacturer that also owns Ben & Jerry’s, Dove, Hellman’s, and a variety of other brands across health and beauty, home, and food. Unilever ranks No. 6 in the Europe Database, Digital Commerce 360’s ranking of the largest online retailers in Europe.

Dollar Shave Club is an example of “unsuccessful attempts to move away from our core,” Unilever CEO Hein Schumacher said in an Oct. 26 call with investors. Schumacher also cited some other acquisitions that were better fits, including skin care brand Paula’s Choice and Liquid I.V. Additionally, the retailer plans to sell off some other acquisitions as it continues to adjust its portfolio. 

“There is more pruning to be done,” Schumacher said. 

Dollar Shave Club going forward

The sale is expected to close by the end of 2023. 

“We are thrilled to acquire Dollar Shave Club, based on its strong brand loyalty, pioneering DTC model, and omnichannel presence. We see growth potential and will invest in cutting-edge marketing, product quality and new innovations,” says Michael Cohen, Partner at Nexus Capital Management. “Dollar Shave Club will also serve as a platform for additional brands with a similar DNA. We are excited to work with Dollar Shave Club employees to drive accelerated growth and welcome Unilever’s continued partnership,” he said. 

Dollar Shave Club has a seven-figure subscriber base, the retailer said in an October press release. 

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“We know we’re a little late to the game with BNPL. But we really wanted to see how it was going to play out,” says Christine Briganti, financial services deployment project leader, Ikea

“After looking at BNPL, we’ve structured it in a thoughtful way to service a demographic at Ikea we weren’t serving properly,” Briganti says.

That demographic included consumers that don’t want an Ikea credit card or don’t qualify for one. Ikea already offers a private label Visa credit card that starts at $500.

“We wanted to make sure that the BNPL option wasn’t in direct competition with that,” she says.

Ikea uses Afterpay to offer customers the ability to pay using BNPL for purchases ranging from $40-$500.

Other retailers like Wayfair LLC began offering BNPL in 2016. Amazon.com Inc. in 2018 through Amazon Pay and then through Affirm in 2021, Walmart Inc. offered Affirm in 2019, and Target Corp. through Sezzle and Affirm in 2021.

“We know this is an inflationary time and coming out of this pandemic where people have lost jobs or taken jobs that pay less and they’re maxing out credit cards. We wanted to make sure that if you were not qualified for traditional credit, that this would help the consumer not overextend themselves,” Briganti says.

BNPL vs. credit cards

Unlike Afterpay, consumers that want to use a higher-amount-limit Ikea Visa must go through a traditional credit check and approval process. “Not everyone can qualify for a Visa card,” Briganti says.

“We had been approached by several vendors about offering a higher credit limit change. We might reevaluate in 2-5 years and bump it up,” Briganti says. “But for starting out, we have noticed quite a bit as default rates have gone up with higher limits that we did not want to risk the financial health of our consumers.”

The Ikea shopper is generally 20 to 40 years old, “and that demographic loves technology,” Briganti says. “So, we always wanted to bring BNPL to market. It just took us a while to evaluate what the rest of the market was doing.”

BNPL helps Ikea steer sales

With a lower limit, Briganti says BNPL helps the retailer “steer sales,” she says. “If you were going to buy a living room coffee table and you saw one for $100, but maybe there’s another for $200-$300, you might opt for the higher-priced table if you’re not paying cash for it upfront,” she says.

Jewelry, automotive parts, and apparel retailers most likely to offer BNPL

While more than half of the Top 1000 retailers offer BNPL, the top retailers differ in which  pay-in-installment vendor they offer. 18.3% of Top 1000 retailers offer PayPal credit, one of PayPal’s versions of BNPL, 14.7% offer Affirm, 13.3% offer Klarna, and 11.9% offer AfterPay, with other services coming in behind. 18.9% of retailers offer multiple BNPL vendors.

Jewelry, automotive parts, and apparel retailers are the most likely to offer BNPL. Food and beverage companies are the least likely, according to Top 1000 data.

Ikea is No. 7 in the Europe Database. The database ranks the region’s largest online retailers based on their web sales.

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Nike ranks No. 9 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers.

Nike’s digital retail strategy

Chief financial officer Matt Friend said Nike consumers spent more time in brick-and-mortar locations in the quarter.

“But 90% of their shopping journeys are starting with digital,” Friend said. “And so we continue to believe that our digital and physical strategies of serving consumers are the right strategy to serve demand as we look forward.”

In North America, Nike Digital sales grew 4% in the retailer’s first quarter. Nike Digital refers to sales made through the retailer’s websites and apps.

At the same time, Nike Digital sales in Europe, the Middle East and Africa decreased 2%. And they decreased 3% in Asia Pacific and Latin America. In Mexico specifically, though, Nike’s “digital business delivered double-digit growth,” Friend said, without revealing more.

“We’ve increased the size of our supply chain in the last few years to be able to address the growth that we’ve seen in our business, both overall and in digital,” Friend said.

To improve that efficiency, he said, Nike has reduced digital split shipments so consumers don’t get two deliveries for the same order. It has also invested in “regional service centers that are closer to where consumer demand is.” In other words, it has improved its fulfillment by opening distribution centers in strategic areas.

Nike Digital sales in China

In the Greater China region, Nike Digital sales grew 6% in Q1. The footwear brand held a three-day sports festival called Sportchella in China.

“The team amplified the impact of the festival by partnering with Tmall to create the first Nike Super Brand Week, which drove more than 2 billion impressions,” Friend said. “And this partnership seamlessly integrated the events with a digital shopping journey that generated very strong consumer response and engagement.”

Tmall is an Alibaba-owned marketplace, along with Taobao. Taobao ranks No. 1 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the largest such marketplaces by gross merchandise value. Tmall ranks No. 2.

Nike App increases Nike sales

The Nike mobile app had “strong growth,” Friend said. Nike mobile app traffic had high single-digit growth in the quarter, he said.

“We saw member activity continue to increase both in terms of engagement and buying behavior and a higher basket size, a higher AOV,” Friend said.

That drove “sustained momentum on the Nike mobile app” as loyalty members increased their buying frequency in the quarter, he said.

“We continue to see a growing structural advantage as more consumers start their shopping journeys with us on mobile,” Friend said.

Nike Direct revenue

Friend said member engagement through Nike Direct grew double digits in its Q1 compared with the year-ago period. Average order value through Nike Direct sales increased, but he did not specify how much.

Nike Direct refers to the retailer’s direct-to-consumer sales (online and offline). It grew 6% year over year in the first quarter.

In North America, Nike Direct grew 7%, led by 11% growth in physical store sales. Nike Direct sales grew 10% in China. They grew 6% in Europe, the Middle East and Africa, and 3% in Asia Pacific and Latin America.

How much does Nike make in a year?

For the fiscal first quarter ended Aug. 31, 2023, Nike reported:

• Revenue grew 2% to $12.94 billion, from $12.69 billion in the year-ago period.
• Profit also grew 2%, to $5.72 billion from $5.62 billion the year before.
• Similarly, Nike Digital sales grew 2% year over year in the quarter.
• Nike Direct, or the retailer’s direct-to-consumer sales (online and offline), grew to $5.4 billion. That’s a 6% year-over-year increase.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Nike report.

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GigaCloud launched its B2B marketplace in January 2019 by focusing on the global furniture market. It has since expanded into such additional categories as home appliances and fitness equipment. The GigaCloud B2B marketplace debuted as a public company in the U.S. a year ago.

For the second quarter ended June 30, GigaCloud grew revenue to $153.1 million. That’s a 23.5% increase from $124.0 million in the second quarter of 2022. The company also posted its first consecutive quarterly profit. Second-quarter net income was $18.4, up from $6.1 million.

GigaCloud B2B marketplace

The marketplace company operates warehouses in four countries across North America, Europe, and Asia; it operates 21 warehouses worldwide. They total over 4 million square feet of storage space and cover 11 ports of destination, with over 10,000 annual containers.

GigaCloud says it uses artificial intelligence software to generate seller ratings and credit profiles through volume data. The AI software optimizes routing by organizing incoming orders and rebalancing inventory levels within the warehousing network, the company says.

And the GigaCloud B2B marketplace software platform includes flexible trading tools. With them, sellers can set prices based on quantities, delivery dates and fulfillment methods. Buyers have the option to purchase merchandise individually or in bulk, the company says.

“We are seeing our momentum continue to grow at both the 1P and 3P level in our GigaCloud marketplace as we execute on our strategy and further our market leading position as a trusted global B2B ecommerce brand,” says GigaCloud CEO Larry Wu.

GigaCloud earnings and revenue

For the first half ended June 30, GigaCloud Marketplace reported gross merchandise value of $607.5 million for all transactions, up 32.4% from $458.8 million a year earlier.

Total GigaCloud revenue was $280.9 million in the six months ended June 30, an increase of 18.8% from $236.5 million in the six months ended June 30, 2022. The increase was primarily due to greater market demand for large parcel merchandise, leading to increases in our GigaCloud Marketplace GMV, sales volume and number of sellers and buyers, the company says.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports.

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The apparel/accessories retailer grew its digital sales 14% in Q4 and 24% in the fiscal year. Nike Digital sales accounted for 26% of total sales in fiscal 2023.

In pre-pandemic 2019, Nike Digital sales accounted for 10% of total sales. Nike Digital refers to sales made through the retailer’s websites and apps.

Nike ranks No. 9 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers.

Fourth-quarter Nike revenue increased 5% compared with the prior year, to $12.8 billion. Full year revenue increased 10% compared with fiscal 2022, to $51.2 billion.

John Donahoe, president and CEO, said consumers want digital and physical access to the brand.

“They use different shopping occasions to use different channels,” Donahoe said. “Consumers expect us to know who they are, and consumers have said to us they want a consistent and seamless experience. And so that is what has driven our marketplace strategy.”

Nike Digital sales

In North America, Nike Digital sales grew 17%. And in Europe, the Middle East and Africa (EMEA), Nike Digital sales grew 24%.

In China, Nike Digital sales declined 12% “as consumer buying continues to over index in brick-and-mortar versus the prior year,” said Matthew Friend, executive vice president and chief financial officer, in the retailer’s Q4 2023 earnings call.

Meanwhile, Nike Digital sales in Asia Pacific and Latin America (APLA) grew 9%.

Based on Nike Digital sales accounting for 26% of total sales, Digital Commerce 360 estimates Nike ecommerce sales to have reached about $13.3 billion in fiscal 2023.

“We continue to invest to grow based on the fact that the consumer continues to choose to shop in our stores and in our digital channels — or at least to engage in our digital channels — before they go try to find the product that they want in the wholesale marketplace,” Friend said.

Traffic analysis

Nike’s digital conversion traffic decreased 5.8% in the Q4 FY 2023 compared with Q4 FY 2022, according to a Similarweb analysis. Similarweb monitors website traffic.

In May 2023, while Nike held 42.5% digital market share, the largest among the top 10 sports apparel brands, its share declined 6.2% compared to the previous year, according to Similarweb. Nike traffic to the Dick’s Sporting Goods website decreased 3.4% year over year in Q4 2023.

“With the COVID-19 pandemic functioning as a catalyst, Nike’s shift to DTC sales accelerated, and the company began employing a combination of scaling back wholesale partnerships while expanding direct channels like the Nike website and Nike app,” wrote Sneha Pandey, insights manager at Similarweb. “However, with pandemic ecommerce tailwinds slowing down and market dynamics changing, Nike has had to re-evaluate its distribution strategy and move toward a better balance between DTC and wholesale.”

Source: Similarweb

Direct-to-consumer sales

Sales through Nike Direct, which refers to the retailer’s direct-to-consumer sales (online and offline), grew 15% year over year in the fourth quarter. Nike Direct grew 18% year over year in the fourth quarter; Nike Direct revenue reached $5.5 billion in fiscal Q4 2023. For the full fiscal year, Nike Direct revenue increased 14% to $21.3 billion.

Nike DTC sales in its physical stores increased 24% in Q4.

In North America, Nike Direct sales revenue grew 15% in Q4. Nike Direct sales grew 28% in EMEA. In China, Nike Direct sales grew 19%. Meanwhile, Nike Direct sales in APLA grew 9%.

Nike Q4 2023 earnings summary

For the fiscal fourth quarter ended May 31, Nike Inc. reported:

• Fourth-quarter revenue increased to $12.83 billion. That’s up 5% from $12.23 billion in the previous fiscal fourth quarter.
• Nike Direct revenue was $5.5 billion, up 15% from the year-ago period.
• Nike-owned stores grew 24%, and Nike Digital sales increased 14%.

For the full fiscal year ended May 31, Nike reported:

• Total revenue was $51.22 billion. That’s up 10% from $46.71 billion in the previous fiscal year.
• Nike Direct revenue was $21.3 billion, up 14% from the previous year.
• Nike Digital sales grew 24%, and Nike-owned store sales grew 14%.

Percentage changes may not align exactly with dollar figures due to rounding.

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Frasers has spent £75 million ($94 million) on the stake as part of a strategic partnership with AO World after two years of talks, according to a June 12 statement. The deal will help Frasers expand its business delivering homeware ranges and bulk equipment.

AO World benefited during the early part of the pandemic as shoppers bought dishwashers and washing machines online, but they’ve been cutting back on spending amid the cost-of-living crisis. Last year, the retailer had to raise equity to strengthen its balance sheet.

AO is the latest in a long line of struggling retailers that have drawn interest from Frasers. The business majority Ashley owns raised its stake in struggling online hub Asos Plc twice in recent days. It took its holding to almost 10%.

ASOS Plc Holdings ranks No. 19 in the 2023 Europe Database. Digital Commerce 360’s database ranks the largest European online retailers by their web sales.

Ashley founded Sports Direct four decades ago and built it into Frasers. The company has purchased stakes in Hugo Boss AG and luxury handbag maker Mulberry as well as buying Savile Row tailor Gieves & Hawkes, video game retailer Game Digital, apparel brand Jack Wills and online businesses Missguided and Amara Living.

The acquisitive approach is continuing with Ashley’s son-in-law Michael Murray as chief executive officer.

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