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BFD Expert Voices - Retail Deals

BFD Expert Voices

Kohl's presented a virtual analyst day yesterday and released its preliminary proxy, which said the company and its banker (Goldman) have spoken to a range of companies about a range of strategic alternatives. 

Why it matters: Kohl's disclosure that Goldman has spoken to at least 20 parties — a mix of financial sponsors, strategic acquirers and investors who focus on real estate — shows investors and its activist agitator (Macellum) that it's trying to maximize value. 

Yes, but: There still doesn't appear to be any progress with a $64 per share bid from Acacia Research, and yesterday's analyst day suffered some unfortunate timing as Kohl's, Macy's and peers saw shares tumble with the rest of the market on macroeconomic concerns. 

Between the lines: The proxy said Goldman is engaging with both inbound suitors submitting expressions of interest and is making outbound calls as well. A handful has been invited into the data room and to submit offers.

Meanwhile, during its investor day, Kohl's provided more details on how it's going to bolster the company, reiterating the opportunity with Sephora.

It also said it would build 100 smaller-format stores, less than half the size of a typical Kohl's location.

And increase online sales from $6 billion to $8 billion, though it didn't provide a date by which they hoped to achieve it.

What they're saying: Kohl's CEO Michelle Gass told me these latest expansion efforts do not constitute a new plan but are a continuation of a strategy rolled out in 2020.

She elaborated that guidance of 2% to 3% growth in net or comparable sales is a conservative figure that factors in current economic volatility.

"We expect to grow to at least low single digits," Gass said, noting that most of the company's growth initiatives didn't launch until late 2021.

She added that if she focuses on driving growth and returning capital to shareholders, eventually the share price will catch up, despite the low multiple Kohl's was being valued at.

1 big thing: Kohl's mating dance

Illustration of a gold-plated house-for-sale sign.

Danone's CEO Antoine de Saint-Affrique said this morning that the company needs to fix its underperforming businesses. 

The list includes baby food brand Tema, organic dairy business Horizon, Chinese vitamin drink Mizone and its traditional dairy portfolio.

It's part of a new strategic plan the company has coined "Renew Danone."

Why it's the BFD: If those units can't be resuscitated, then Danone will likely dispose of them, according to de Saint-Affrique's presentation at a capital market event.

Catch up fast: The Horizon organic milk business was added when Danone's deal to buy its parent WhiteWave for $12.5 billion closed in 2017.

Of note: Last year the conglomerate sold Vega, a maker of plant-based shakes, to private equity firm WM Partners.

The bottom line: It's part of a bigger trend to emerge this year, bankers say, as CPG companies look to prune their portfolios of underperforming assets.

2. The BFD: Danone stirs up its portfolio

Daniel Carasso, son of Danone's founder, in a 2009 photo. Photo: Getty Images

• L Catterton, the consumer-focused private equity firm, said it has sold its majority stake in ba&sh to HLD, an investment group. http://axios.link/w9L5

• L Catterton also said it has agreed to acquire Taxa Outdoors, a maker of lightweight outdoor gear. The deal will allow Taxa to broaden its distribution and expand its product offerings. http://axios.link/j0qh

• Currencies Direct, a digital payments platform, announced a €140 million investment into the company by the Blackstone Group. Currencies Direct is a Palamon Capital and Corsair portfolio company. http://axios.link/V9zv

• Cay Skin, a sunscreen startup founded by model Winnie Harlow, raised $4.1m in seed funding from Female Founders Fund, True Beauty Ventures, New Money Ventures, Air Venture Partners and Silas Venture Partners. http://axios.link/1XAA

• Loyal Guru, a Barcelona-based e-commerce loyalty startup, raised €8m in Series A funding. Nauta Capital led, and was joined by insider Greycroft. http://axios.link/sB63

• ParkourSC (fka Cloudleaf), a San Jose, Calif.-based supply chain operations platform, raised $26m. Coda Capital led, and was joined by John Chambers. http://axios.link/Jn6R

• Clearlake Capital agreed to buy Montreal-based packaging products maker Intertape Polymer Group (TSX: ITP) for around US$2.6b. http://axios.link/Oeft

• Saltbox raises $128m to invest in expansion of its warehouses and co-working spaces from real estate investment firm Fundrise, TechCrunch reports. http://axios.link/TZlq

• KlickBrands received $100m from Singapore-based Una Brands to acquire profitable brands in South Korea as part of a strategic partnership between the two entities, TechCrunch reports. http://axios.link/QO0D

3. Retail transactions

Situational awareness:  Two things. I will be at the Natural Products Expo West conference this week. See below for more details.

Also, today at 12:30pm ET Axios is hosting an International Women's Day virtual event on the post-pandemic outlook for women entrepreneurs and business leaders. 

Participants include SBA administrator Isabella Casillas Guzman and Sen. Joni Ernst (R-Iowa). Register. 

🥬 I will be in LA at the Natural Products Expo so if you're there, please let me know by replying to this email. 

I'll be interviewing CEOs and advisers, and looking at what this year's new ingredient trend will be, seeing as this can drive finance and deals across the category. In the past, it has ranged from chia seed to grass-fed beef to kale.

Any thoughts on what it will be? Let me know, and I'll keep tabs and report back. 

March 08, 2022

1 big thing: Kohl's mating dance