Axios Pro: Retail Deals
June 23, 2022
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Greetings, Retail readers.

Situational awareness: Kohl's stock is trading near $39 today, well below a reported lower offer in the making from the Franchise Group.

1 big thing: Grove Collaborative wants to get into more stores

Photo illustration: Lindsey Bailey/Axios. Photo: Grove Collaborative

Grove Collaborative, the e-commerce platform that just went public via SPAC, is aiming to expand into more physical stores, CEO Stuart Landesberg tells Kimberly.

  • Grove has some new retail partnerships on tap in the coming months, Landesberg says, “demonstrating that our brand is one that can win not just in e-commerce...but also in channels like grocery, drug, home improvement, specialty.”

Why it matters: Physical stores have become the latest linchpin of digital-first retailers’ strategies — as a way to build brand awareness, let consumers try on or sample new products, and get in front of consumers who are craving the in-store experience.

Driving the news: Grove went public on the New York Stock Exchange last week, joining a small cohort of companies that have gone the SPAC merger route this year despite the chill in the public markets.

  • Richard Branson’s acquisition vehicle is backing the deal. Grove also snagged actress Drew Barrymore as an investor and brand ambassador.
  • Grove makes eco-friendly cleaning and personal care products and sells other brands like Mrs. Meyers and Method online.

State of play: Only 30 SPAC combinations closed during the first quarter of 2022, the lowest level since Q2 2020, the period when the SPAC market was about to really take off, according to PitchBook data.

  • Meanwhile, Grove's shares are down about 30% since its debut last Friday.

Yes but: Landesberg has dismissed the gloomy market, focusing instead on the trends his company is riding: zero plastic and sustainable consumption.

  • "I love going public with the wind at our back from a consumer sentiment perspective," he tells Kimberly, referring to consumers' appetite for clean, sustainable products.
  • “I’m not intimidated by the market today,” he says, adding that his sights are set on the long term and that he's able to leverage Branson's expertise.

Catch up fast: Grove partnered with Target last year; it's added a second retail partner with over 1,100 stores (name, to be announced).

What's next: In addition to rolling out its products at more retailers, Grove plans to continue ramping up its innovation pipeline toward products with healthier ingredients and less packaging waste.

  • Landesberg says the consumer goods market will inevitably transition to a more sustainable footprint, something he expects investors to increasingly lap up.

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