Weekly Round Off With HTE ✨

August 28, 2023 • Estimated Reading Time: 12 minutes

🌟 Hey there, dear readers! It's that time of the week again when we gather around to catch up on the latest and greatest in the Direct-to-Consumer (DTC) world. 🚀

Welcome back to another exciting edition of our DTC (Direct-to-Consumer) Insider newsletter. 📰 Our mission: to serve you the freshest news and insights straight from the heart of the DTC universe. 💡 With every update, we're arming you with the knowledge to be the smartest one in the room. 🤓

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No more waiting; let's dive headfirst into the world of DTC and set the stage for an information-packed week ahead. 🚀📊📈

Here's what we're covering this morning:🚀

🥤 Beverage brand Holy secures funding to fuel growth.

💧 Waterdrop® celebrates by ringing the NASDAQ opening bell.

⌚ Rolex made a monumental acquisition, purchasing Bucherer, the world's largest watch retailer.

🤖 31% of investors embrace AI as their advisory tool of choice.

👗 Shein collaborates with fast-fashion icon Forever 21, forging new paths in the industry.

📊Roark Capital to buy sandwich chain Subway for up to $9.55 bln

🧐Americans are shopping less, But the US Economic Engine is Still Humming

Beverage Brand HOLY Nabs Funding 

Source: August 24, 2023, Silicons Canals 

The brand HOLY, known for its powder-based soft drinks, is poised to expand its presence across Europe following the successful closure of an $11.5 million Series A funding round. Leading the round is Brooklyn-based Left Lane Capital, with participation from existing investors such as FoodLabs, Simon Capital, and V3 Ventures—a subsidiary of Verlinvest.

HOLY, headquartered in Berlin, Germany, and established in 2020, operates in Germany, Austria, France, and Switzerland, offering powder-based energy drinks and iced teas. The direct-to-consumer (DTC) beverage company stands out by emphasizing sustainability and using clean-label ingredients. Moreover, its unique branding, characterized by bold, imaginative, and occasionally anthropomorphic elements, resembles that of Ghost, Sneak, and G FUEL.

HOLY's founders critique outdated sugary drinks in plastic bottles. Their drinks, low in sugar and calories, offer vitamins, nootropics, antioxidants, and fiber for health-conscious consumers. Natural flavors and colors add to their appeal.

Waterdrop® Rings the NASDAQ Opening Bell While the Brand Grows as a Global Leader in Sustainable Hydration

Source: August 24, 2023, Yahoo Finance 

Beverage innovator waterdrop®, backed by Novak Djokovic, celebrated its US expansion with a NASDAQ opening bell ceremony in New York's Times Square. The event signifies the brand's growth in the United States and its commitment to sustainable hydration in sports and daily life. CEO and founder Martin Murray highlighted Djokovic's role as an investor and brand ambassador, aligning with their vision to eliminate plastic bottles and sugary drinks. waterdrop® operates through various channels and has opened a Mall of America store. 

It's recognized as the Official Hydration Partner and Gold Partner of the 2023 ATP Tour, showcasing its dedication to sustainable sports hydration. Since 2016, waterdrop® has saved over 30 million plastic bottles through its sugar-free Microdrinks and reusable products.

Rolex Just Bought Bucherer, the World's Biggest Watch Retailer

Posted Date: August 24, 2023, Robb Report

Swiss watchmaking giant Rolex has stirred up the watch industry from its summer slumber by revealing its plans to acquire Bucherer, the prominent international watch and jewelry retailer boasting a network of over 100 stores across countries including Switzerland, the United States, England, Germany, France, Denmark, and Austria. Given the typically low-key activity in the European business landscape during August, the announcement has been an unexpected twist.

The 87-year-old chairman, Jorg Bucherer, is selling due to a lack of direct successors. The move is significant as Bucherer's stores have been authorized Rolex dealers since 1924. Rolex states that the acquisition benefits its brands, partner brands, and the Bucherer employees. While acquisitions often bring change, Rolex assures Bucherer will maintain its name and operate independently. The collaboration between Rolex and its official retailers will continue unchanged. This news follows Rolex's introduction of the Certified Pre-Owned program in the US after its European launch, with Bucherer as one of its retailers.

31% Of Investors Are OK With Using Artificial Intelligence As Their Advisor

Source: August 24, 2023, CNBC

Generative artificial intelligence (AI) employs algorithms to craft original content, including financial advice, essays, music lyrics, and art. A Certified Financial Planner Board of Standards survey reveals that 31% of investors would apply AI-generated financial advice without cross-referencing it with another source. However, the reliability of AI outputs can vary, and complex financial situations make it challenging to pose appropriate questions to AI chatbots.

This trend raises concerns among experts, as one-third of investors might rely solely on AI for financial guidance. Generative AI employs algorithms to produce various content forms, and ChatGPT, a well-known instance, responds to financial queries using data from the internet. Nonetheless, the credibility of these responses depends on the AI's quality.

Although robo-advisors have been used since the 2008 financial crisis, skepticism persists regarding their capacity to match human advisors' insights. Notably, older investors (above 45) appear more content with AI advice (62%) compared to younger counterparts (38%). However, older investors often require personalized guidance due to their intricate financial circumstances.

To navigate this landscape, investors using AI should adopt a "trust but verify" approach. Experts advise against complete reliance on AI-generated financial counsel, given the dynamic and complex nature of financial decisions.

Shein Strikes A Deal With Fast-Fashion Retailer Forever 21 That Will Expand The Reach Of Both Brands.

Source: August 24, 2023, CNBC

Fast-fashion giants Shein and Forever 21 have united strategically to capture their shared youthful consumer base and reputation for affordable, trendy apparel and accessories. The collaboration involves Shein acquiring around one-third of Sparc Group, the operator of Forever 21, while Sparc will hold a minority stake in Shein. 

The deal also opens novel avenues for both brands to connect with customers.

Shein's bid to distance itself from criticism and prepare for a rumored U.S. initial public offering prompts this venture. Despite allegations of tariff violations, environmental concerns, and labor issues, Shein denies any wrongdoing. The company has also shifted its headquarters from China to Singapore to mitigate risks associated with ties to China.

Though Shein and Forever 21 cater to similar audiences, their methods differ. Shein operates online, while Forever 21 primarily relies on mall stores. Their collaboration offers fresh ways to engage consumers: Shein's expansive online platform will host a selection of Forever 21's products, leveraging Shein's user base of 150 million. For Shein, this venture provides a foothold in U.S. malls and an opportunity to experiment with in-store features.

Roark Capital to Buy Sandwich Chain Subway for Up to $9.55 bln

Source: August 24, 2023, Reuters

Private equity firm Roark Capital has agreed to purchase Subway, valuing the U.S. sandwich chain at up to $9.55 billion, including debt, based on insider information. The transaction follows an extended auction process that commenced in February and garnered interest from various private equity entities. An "earn-out" agreement played a pivotal role in clinching the deal, with Subway's full payment contingent on meeting specific cash flow milestones over two or more years post-closure. 

Without the "earn-out," the deal's value stands at $8.95 billion. Roark outbid rival groups led by TDR Capital and Sycamore Partners. The acquisition is expected to be finalized within a year, with Roark believing the restaurant market's fragmentation mitigates antitrust concerns.

Americans are Shopping Less, But the US Economic Engine is Still Humming

Source: August 23, 2023, CNN

Some major American retailers claim that consumers are spending less due to financial strain, hinting at a slowing economy. However, this is only partially accurate. The US consumer appetite, pivotal during the pandemic and beyond, remains robust but hunger for something novel.

Earnings reports reveal various factors behind diminishing profits. Macy's cites rising credit card delinquencies reflecting consumer health, while Dick's Sporting Goods notes shoplifting impact despite minimal evidence. Foot Locker and Nike stocks plummet. Target, Home Depot, and Lowe's witnessed sales decline.

Yet, this isn't necessarily the decline of the mighty US economy. Despite decreased spending on goods and depleting COVID-19 stimulus savings, consumption continues.

Americans divert from buying goods like shoes and laptops to investing in experiences, such as concerts, weddings, and vacations curtailed by Covid. This matters as US GDP depends heavily on consumer expenditure.

Stay Ahead of the Curve with HTC!

As we wrap up this edition of our newsletter, we hope you found the blend of news and insights as vital as we did. The world of DTC and beyond continues to evolve, and staying informed is the key to success. Keep those entrepreneurial spirits high, and remember, we're here to keep you ahead of the game. 

Until next time, stay sharp, stay savvy, and keep conquering the DTC frontier! 🚀🌟📰