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BFD Expert Voices - Retail Deals

BFD Expert Voices

Mattel announced this morning that it's struck a licensing deal for the Disney Princess and Frozen franchises. 

Why it matters: Mattel will be able to start selling the Disney toys in 2023, adding a massive revenue line to the company.

Investors chimed in on the deal, sending Mattel's stock soaring. 

Catch up fast: Mattel lost this license to Hasbro in 2016, a devastating blow to the company that prompted years of digging out from the hole and costing multiple CEOs their jobs. 

The bottom line: The deal is a loss for Hasbro, but the silver lining is that the company has said it's renewed its "Star Wars" franchise with Lucas Films. 

1 big thing: Barbie and Elsa reunite

Photo: Kendri Rodriguez/Barcroft Media via Getty Images

Athletic Greens, a nutritional wellness brand, raised what CEO Chris Ashenden described to me as its first "real" equity capital infusion totaling $115 million and led by Alpha Wave Global.

Why it's the BFD: The deal values the business at $1.315 billion post-money from $1.2 billion pre-money, or roughly 13x the more than $100 million in revenue it generated in 2021, Ashenden says.

Details: Last year Athletic Greens' revenue grew by nearly 200%, he said.

For the bulk of its first 10 years, the company bootstrapped its expansion, reinvesting cash flow into the business.

In the last couple of years, the company increased investment and generated losses as a result in order to ramp up growth.

Its flagship product is AG1, a nutrient-packed powder described as a foundational nutritional drink that can be layered into one's diet.

Between the lines: Proceeds will be invested in R&D, improving the omnichannel customer experience, and exploring expansion to new markets around the world.

Athletic Greens is also weighing a partnership with trusted, credible retailers in the nutrition space for exposure to brick and mortar.

Though Ashenden described it as a first-round, the company did a small raise of outside equity last summer.

What they're saying: The health and wellness business has the opportunity to become a multibillion-dollar company that could eventually go public, Ashenden said.

The bottom line: The investment is intended to help fuel Athletic Greens and its AG1 product's rise to become the next big trend in beverages akin to Gatorade in the 1980s and Red Bull in the 1990s, the CEO said.

2. The BFD: Athletic Greens

Health and wellness brand Athletic Greens' flagship beverage AG1 is poured from a measuring cup into a glass.

Data: Morning Consult; Chart: Will Chase/Axios

3. Retail therapy: Chart of the day

Private equity firm Ames Watson is levering portfolio company Lids with a new $250 million term loan to finance the private equity firm's acquisitions, it said this morning.

Why it matters: The new funding will help Ames Watson, which has a mix of long-term holdings as well as VC and PE investments, consolidate the retail and apparel industries.

Quick take: Goldman Sachs' global co-head of consumer retail, Ben Frost, predicted to Axios that both sponsor-driven transactions and apparel deals would both be prevailing themes in 2022.

Between the lines: Ames Watson tells me that the proceeds, more specifically, could be used for acquisitions of either add-ons complementary to Lids or purchases of standalone platforms.

It gives the firm the ability to buy businesses with more than a billion dollars in revenue or a number of smaller companies.

Ames Watson focuses mainly on DTC, but is open to B2B opportunities, the company added.

It plans to deploy over $250 million on acquisitions in 2022 with at least $20 million to $30 million on passive investments. 

Of note: JPMorgan arranged the syndicated loan, while Wachtell, Lipton, Rosen & Katz served as the legal adviser.

Details: Ames Watson tells me that Lids has $1 billion in revenue, which is double what it was three years ago.

It plans to expand that business by hundreds of stores over the next two to three years.

The firm, owned by Lawrence Berger and Tom Ripley and founded four years ago, now generates $1.6 billion in total revenue.

Portfolio companies include Lids, Fanatics Lids College and South Moon Under.

Past passive investments include Fanatics, Watchbox, Hungry and The House of LR&C.

The bottom line: "We are very much a Berkshire Hathaway model, so the goal is to grow, generate cash and use that cash to purchase interesting businesses that we can transform and grow," Ames Watson said in a statement it emailed to me.

It is a long-term investor that doesn't expect to exit businesses, it added.

4. Ames Watson and Lids line up $250M for acquisitions

NBA player Karl-Anthony Towns signs autographs at a Lids store.

Lids store. Photo: David Dow/NBAE via Getty Images

• Paack, a Spanish e-commerce delivery platform that integrates with warehouse robots, raised €200m in Series D funding. SoftBank led, and was joined by Infravia Capital Partners, First Bridge Ventures, Endeavor Catalyst and insiders Unbound, Kibo Ventures, Big Sur Ventures, RPS Ventures, Fuse Partners, Rider Global, Castel Capital, and Iñaki Berenguer. http://axios.link/mSX6

• Leap, a Chicago-based retail-as-a-service platform, raised $50m in Series B funding. BAM Elevate led, and was joined by Harbor Spring Capital, Northern Trust, Simon, Costanoa Ventures and Hyde Park Venture Partners. www.leapinc.com

• GrowSari, a Philippines-based B2B e-commerce marketplace for small shops, raised $45m in Series C funding led by KKR. http://axios.link/O10U

• Logixboard, a Seattle-based customer experience platform for freight forwarders, raised $32m in Series B funding. Insight Partners led, and was joined by Redpoint Ventures, F-Prime Capital, Social Leverage and Founders’ Co-op. www.logixboard.com

• Archive, an SF-based resale marketplace integration platform for brands, raised $8m co-led by Lightspeed Venture Partners and Bain Capital Ventures. www.archiveresale.com

• Plenty, a South SF-based indoor vertical farming company, raised $400m in Series E funding. One Madison Group and JS Capital co-led, and were joined by Walmart and insider SoftBank. http://axios.link/RZrB

5. Retail transactions

Fernando Fernandez steps into the role of president of beauty and well-being at Unilever after previously serving as EVP of Latin America. https://www.unilever.com/

Fabian Garcia, president of Unilever’s North American unit, is the CPG giant’s new president of personal care. https://www.unilever.com/

Hanneke Faber, president of Unilever’s foods and refreshment division, is now president of nutrition. https://www.unilever.com/

Matt Close moves into the role of president of ice cream at Unilever after serving as EVP of that division. https://www.unilever.com/

Nitin Paranjpe, Unilever’s COO, takes on the new role of chief transformation officer and chief people officer. https://www.unilever.com/

Reginaldo Ecclissato is now leading supply chain and business operations at Unilever as chief business operations officer after serving as chief supply chain officer. https://www.unilever.com/

Sunny Jain is leaving his role as president of beauty and personal care at Unilever to set up a fund that invests in technology supertrends. https://www.unilever.com/

6. It's personnel

Another one bites the dust. As I mentioned this week, turning around department stores is hard. Real hard. RIP the Sears store in Fort Lauderdale, Florida.  

Situational awareness: ValueAct is urging the 7-Eleven owner to consider strategic alternatives, including a sale, Reuters reports.

January 26, 2022

1 big thing: Barbie and Elsa reunite