Happy Thursday and welcome back to The Spin! Yesterday, US Congress has approved President Trump's controversial tax plan. Today, we explore some of its implications for retailers. We also take a look at the first predictions for 2018, and which brands are currently in the process of changing owners. Enjoy the read and feel free to share! Best, Ulrike


Major victory. President Donald Trump’s 1.5 trillion tax cut bill could bring a slew of benefits to traditional US retail companies. As most of the brick-and-mortar retailers generate the majority of their income in the US, they have traditionally paid some of the country's highest tax rates which will now be lowered. In addition, the doubling of the standard deduction for individuals should free up more funds for consumers to be spent at retail businesses.


Closing the Gap. The National Retail Federation (NRF) calls (press release) the US tax reform a major victory for retailers. Some of the biggest winners are said to include fashion retailer Gap Inc, luxury department store chain Nordstrom and sports specialist Dick's Sporting Goods, whose corporate tax rates are expected to drop from the high 30s to the low 20s. But over the next decade, the widespread cuts might drastically increase the nation's deficit.

Women's (pink) slip. Nearly 60 percent of the world's apparel production is based in family homes with an estimated workforce of about 300 million people, led predominantly by women. At an average of $1.80 a day, this largely unregulated workforce earns about half the income of registered factory workers. Over in the US, women have been hit hard by the recent lay-offs in the retail sector. Last year alone, department stores cut about 161,000 female workers while adding more than 88,000 men.


Holding out. US retailers anticipate (paywall) the strong shopping momentum to last into next weekend, with about 126 million Americans expected to shop on Super Saturday, the Saturday before Christmas Eve. More than half of the holdouts opt to shop online. Next on the list are department stores, discounters, clothing shops and accessory specialists. Amazon, which has just announced plans to reduce packaging materials, remains on top of the list of eCommerce destinations.

Pop shares. The new year is just around the corner, and the first predictions for 2018 are out. Experts expect an increase in Facebook shopping via Messenger bot chats, a lot more popup-style space sharing between merchants, new live-stream shopping events and engaging story-based retail. As part of the new retail landscape, the role of merchandisers will both evolve and increase in importance.


Subscription saturation. Since 2011, the business-to-consumer subscription business has seen an annual growth of about 200 percent, but alongside many victories there have also been countless failures. Attracting more than 11 million US subscribers in 2017 alone, this volatile industry is expected to soon reach its saturation point. To rate a subscription service, analysts have started to extend their view beyond surface-level metrics like sales growth to long-term factors like customer acquisition, retention and development.

Margin worries. Upon its first earnings report as a public company, shares of the online styling service Stitch Fix plunged over 10 percent. Although the San Francisco-based company's sales and earnings beat analysts' expectations, investors were put off by the fact that gross margins had been down almost 3 percent, partly due to the cost of adding new merchandise and higher shrink.


Après-ski. French alpine sports company Skis Rossignol SA has partnered with the Scandinavian investment group Altor to take over Norwegian sweater and outerwear specialist Dale of Norway. Terms have not been disclosed. Upon completion of the acquisition, Rossignol is expected (in Norwegian) to expand its knitwear segment and transfer knitwear production to Dale's Norwegian knitting facility located near the town of Bergen.

Trading places. The owner of Valentino, Qatar Mayhoola for Investments Spc, plans to list about 25 percent of the Italian fashion house on the Milan stock market next year. Meanwhile, La Perla owner Silvio Scaglia is negotiating the sale of the lingerie brand to Shanghai-based investment company Fosun.


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