BANKRUPTCY

Stationery Moves to New Shelves

Ask many stationers or party suppliers to name their dream wholesale account pre-2021, and they’d point you to their nearest Paper Source. 

• While Paper Source’s footprint is medium by retail standards (158 US stores), a half-dozen paper goods business owners told Retail Brew the chain is often their largest partner.
• With its nationwide reach and potential exposure to new customers, Paper Source has been “the golden account,” said Alex Gagné Glover, founder of Chez Gagné Letterpress in Los Angeles.

But things have changed. On March 2, Paper Source filed for Chapter 11 bankruptcy, avoiding on-time payment obligations to its vendors and tarnishing its reputation along the way. 

• Throughout January and February, Paper Source called in unusually large orders to several small businesses. 
• Card sellers said Paper Source made those orders knowing a bankruptcy filing would relieve its payment obligations; Paper Source told Bloomberg it was to boost inventory in the ~27 storefronts it acquired from Papyrus last year. 

What comes next? Paper goods sellers told Retail Brew the abrupt restructuring has forced them to reassess how they partner with national retailers, if at all.

Changing the channel 

Of the non-Paper Source options paper goods vendors have post-bankruptcy, they’re saying...

No to quitting large retail. National chains provide reach other outlets can’t replicate, but small businesses are proceeding with more caution than before.

• Gagné Glover said her Paper Source experience has altered her criteria for considering partnerships with mass retail—like taking a closer look at their earnings and cash flow if they’re publicly traded. But she isn’t removing large retailers from her wholesale lineup entirely.  

Yes to indie sellers. They’re a 2-for-1 win: wholesale revenue mixed with endorsement of fellow small businesses. 

Adding more local retailers “could ultimately recover the Paper Source revenue and do it in a way that supports the community that I would prefer to be supporting,” Natalie Bowman, co-owner of Oh Happy Day party supply store in Tacoma, WA, told Retail Brew.  

For more: Click here to read the full piece, which details exactly how vendors are thinking through their retail strategies in a post-Paper Source bankruptcy landscape. 

ECONOMY

Springing Ahead

Spring is approaching, and so is the long-awaited recovery of the US retail industry. While February retail sales slipped 3% from January, they’re up 6.3 % from last February. 

Behind the February snag: Nationwide weather and supply chain disruptions sent February sales , while $600 stimulus checks approved in December drove January’s sales .

• In February, buyers spent less on cars, electronics, furniture, home improvement, and apparel, while food and beverage sales remained steady, and gas sales increased. 

But now, $1,400 stimmies are hitting Americans’ wallets, which should be an even bigger boon for retailers than the last round of payments. Speaking of the last time around...

• In January, Americans largely spent their payments on furniture, electronics, and appliances. 
• Sales at bars and restaurants, which were arguably hardest hit during quarantine, increased 6.9% from December to January.    

A word of caution: Stores across the country are opening back up, which could lead to setbacks, public health officials warn. Just look at what’s happening in Italy, which issued new lockdown measures after a surge in cases. 

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APPAREL

White Space Filled

Building on the success of its women’s athleisure line, Dick’s Sporting Goods on Tuesday launched VRST, just for the bros. 

A different approach: Unique to industry private labels, VRST—like its sister brand Calia—lives on its own website. It will also land in 400+ stores in a few weeks. 

• The men’s fitness and activewear category exploded in 2020, creating new demand for more versatile athleisure wear, Nina Barjesteh, SVP of product development and design, told Retail Brew. 
• She said VRST and Calia deserve their own identities and platforms, and will leverage multiple marketing channels.  

Dick’s crushed the omnichannel game in Q4: Stores fulfilled more than 70% of e-comm purchases through in-store or curbside pickup and shipping from stores. Q4 online sales increased 57% and now make up nearly a third of the business. 

• Dick’s will open 12 locations in 2021, six of which will be specialty stores. 

Big picture: As Nike, Under Armour, and Adidas focus on DTC, Dick’s private-label brands could fill the hoop-shaped hole left behind. It won’t be easy, though, as chains like Nordstrom and Kohl’s have made strides in athleisure, too. 

WHAT ELSE IS BREWING

• Nordstrom developed an in-house livestream shopping service.
• Walmart hired designer Brandon Maxwell to revamp its private-label clothing brands.
• Starbucks will expand in-store accessibility features for visually impaired shoppers.
• Cava plans to open more stores in the suburbs. 
• Chobani partnered with PepsiCo to expand its retail presence.

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COMMUNITY

On Wednesdays, we wear pink spotlight Retail Brew's readers. Want to be featured in an upcoming edition? Click here and introduce yourself.

Longtime readers probably know Thingtesting, the sprawling directory for extremely online brands. Now, meet Hannah Say, who leads Thingtesting’s efforts to sort the brands from the blands as head of partnerships.

So, what does leading partnerships for Thingtesting entail? I work with brand leaders to share and showcase their stories with the curious consumers who make up Thingtesting's audience.

One thing we can’t guess about your role from LinkedIn: In addition to working closely with brands and getting them on our platform, I also coordinate our internal team testing program where we test and experience new brands together each week. 

Favorite project you’ve worked on: Our first-ever Thingtesting Labs pop-up in Helsinki. Hundreds of people came to test products and ask questions directly to the brands' founders. It was like watching our Instagram feed come to life.

One emerging trend you’re excited about: I'm inspired by and look forward to seeing more representation in emerging brands—both in the diversity of the founders themselves as well as in the products they build and narratives they share with underserved communities.

SWAPPING SKUS

If the latest from Kazuo Ishiguro or Elena Ferrante hasn’t sent you to your nearest indie bookstore yet, these reads on retail’s most literary players might. 

• In the early days of the pandemic, books fell to the bottom of Amazon’s shipping priorities. That should’ve worked to Barnes & Noble’s advantage, but the bookseller’s restructuring has yet to show results. (Modern Retail)
• The Raven, a bookstore in Lawrence, Kansas, earned accidental internet fame with a Twitter thread explaining how Amazon’s prices undercut indie sellers. The fight it’s waging on behalf of other small sellers is far from over. (The New Yorker)

ICYMI

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