January 18, 2023
Welcome Retail readers! Lots of macro news today, including December retail sales (see BFD), and Party City has filed for bankruptcy (see Retail Therapy).
1 big thing: Growth deal hatches new company
Hatch, a maternity apparel company, has raised a growth equity round from Marquee Brands, and will create Hatch Collective pulling Hatch and Marquee's maternity labels under one roof, Kimberly writes.
Why it matters: The global maternity wear market hit about $23 billion in 2022 and it’s expected to reach as much as $44 billion by 2032, according to market intelligence firm Future Market Insights.
What's happening: Marquee, whose brands include Martha Stewart, BCBG, Dakine and Sur La Table, will be a minority investor in Hatch and gain a board seat.
- Marquee’s maternity brands include Motherhood Maternity, A Pea in the Pod and Destination Maternity.
- Hatch founder and CEO Ariane Goldman will lead the new company.
- The company didn’t disclose how much was raised.
What they’re saying: This move gives us “an ability to really understand women and have access to this set of new moms that are going through this next journey of spending,” Goldman tells Axios.
- “It's really powerful to be able to understand their preferences, their needs, their behaviors, and be able to puppeteer the product that's working for them and have this like one holistic home base for motherhood.”
Details: Hatch and Marquee have been in talks for about a year, Goldman says, and those discussions revolved around how the brands could complement each other.
- It became clear, from an operating standpoint, that they could leverage Hatch’s strong leadership team, she says.
What’s next: Goldman’s focus in the next few months will be on clarifying and delineating the brands so that each has a distinct customer base.
- The brands will touch on different price points and have very differentiated products, she says.
- She plans to combine the brands’ distribution facilities, positioning the company to gain volume discounts and economic efficiencies, and strengthen relationships with vendors to better negotiate.
- She also intends to develop a new merchandising strategy across the businesses.
- “I think the customer will start to see our touch on things probably in Q3,” and then, by the first quarter of 2024, she says, “you're going to really see these brands feel fresh and delineated and really alive.”
Zoom out: It’s powerful to have access to customer data around pregnant women as they enter the next phase of their journey, Goldman says.
- Her team will focus on designing what that data set looks like, with the goal of ensuring that they "are the premier owner of all this information.”
Context: The New York company most recently raised a $5 million round in 2019 led by Silas Capital, with participation from M3 Ventures.