Macy’s board unanimously voted to terminate discussions with Arkhouse Management and Brigade Capital, two activist investor groups that had been looking to take the department store chain private in a $6.9 billion deal, the retailer announced Monday.

Arkhouse and Brigade have “failed to lead to an actionable proposal with certainty of financing at a compelling value,” the company said, effectively closing the door on the prospect of a buyout and ending a months-long skirmish with Arkhouse, a real estate hedge fund. Looking ahead, Macy’s will prioritise its turnaround strategy under CEO Tony Spring, which entails eliminating 25 percent of its retail footprint and improving the shopping experience.

Macy’s shares fell sharply on the news to $16.62 Monday morning, trading 13 percent lower than its closing price Friday of $19.09.

Arkhouse and Brigade submitted their initial bid in December 2023, offering $5.8 billion or $21 per share for the ailing American chain. Macy’s rebuffed that offer. In February, Arkhouse Management launched a proxy fight at Macy’s, nominating nine new directors on Macy’s board for election.

The following month, the firms increased their offer to $24. The two parties entered an agreement for due diligence, since which the retailer said it has spent “hundreds of hours” reviewing documents, taking meetings and addressing their requests. In April, Macy’s agreed to add two of Arkhouse’s candidates to its 15-person board, naming them to the finance committee tasked with reviewing Arkhouse’s take-private bid.

In late June, Arkhouse and Brigade raised their proposal once more to $24.80 per share, Macy’s said, but the price was still below the range that it had informed its pursuers was compelling in March.

The financing proposal was also conditional and lacked full commitment as well as actionable steps, the board had decided.

To maximise the value of the company to shareholders, its best bet is prioritising Macy’s “Bold New Chapter” strategy, Paul Varga, lead independent director of Macy’s, Inc. said in a statement.

Shortly after chief executive Tony Spring took the helm in February, Macy’s introduced its new turnaround strategy that entails culling one-fourth of its retail footprint, growing its luxury segment Bloomgindale’s and improving the customer shopping experience.

“While it remains early days, we are pleased that our initiatives have gained traction,” Spring said in the announcement Monday.

Shoppers are likely to spend roughly $14 billion during Amazon’s Prime Day two-day shopping event this week, according to projections from Adobe Analytics, a firm that studies e-commerce transaction data.

Spending at Amazon on Tuesday and Wednesday could rise 10.5 percent from Prime Day 2023, Adobe said.

The online retailer began holding Prime Day a decade ago, typically in July. Prime Day accounts for 1 percent to 2 percent of Amazon’s net global sales, according to CFRA Research.

Amazon started advertising pre-Prime Day deals in early July on clothes, back-to-school gear, wellness products and electronics, though it moved Prime Day back by five days on the calendar this year.

Amazon said that Day 1 of its two-day Prime Day 2023 earned its biggest sales day ever, although it doesn’t disclose total sales for Prime Day.

The $12.7 billion shoppers spent at Amazon last year during Prime Day was 6.1 percent more than what they spent during the 2022 event, according to Adobe.

Amazon’s Prime Day has turned July, an otherwise slow time for retailers, into a season when shoppers look for bargains, especially on back-to-school clothing, electronics, uniforms, backpacks, dorm decorations and supplies.

Rivals Walmart and Target are also launching July discounts and marketing events in a bid to beat Amazon at its own game, and capture some of the $38.8 billion that the National Retail Federation trade group projects Americans will spend on back-to-school merchandise this summer.

Following years of high inflation, shoppers have delayed purchases of non-essential goods and retailers are tempting shoppers to break that habit with aggressive July discounting.

“We are expecting really strong momentum for back-to-school,” said Vivek Pandya, Adobe’s lead insights analyst.

Shoppers are now more willing to spend and have started to use Prime Day as a back-to-school shopping opportunity, he said.

Shoppers could spend $7.1 billion at Amazon on Tuesday alone, up 11.3 percent from a year earlier, Adobe said. Day 2 is expected to bring $6.9 billion in online sales, up 9.2 percent from a year earlier, it said.

Adobe expects Amazon to dangle discounts of 22 percent on electronics, 20 percent on clothing, 17 percent on home goods and furniture and 11 percent on sporting goods.

Adobe’s projections are based on its analysis of data measuring transactions from previous Prime Days.

By Ananya Mariam Rajesh and Arriana McLymore

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In sportswear, innovation is the name of the game.

On got its big break as a sneaker start-up thanks to the lightbulb moment co-founder Olivier Bernhard had when he cut up pieces of a rubber garden hose pipe to form the springy sole of the brand’s prototype running shoe. It formed the basis of the Swiss brand’s propriety CloudTec technology that gives the midsole of its shoes a unique look and feel and — in the brand’s words — makes you feel like you’re running on clouds.

Now, the brand is set to unveil a new innovation, which it says will be its most transformative technological breakthrough since the invention of CloudTec 15 years ago.

LightSpray is a new “spray-on” manufacturing technique which allows for the creation of ultralight one-piece uppers — the fabric section of the shoe which covers the top half of the foot — created by a robotic arm which is capable of producing one shoe in three minutes. The seamless, lace-free design has already become a hit among On’s athletes such as Kenyan long distance runner Hellen Obiri who won the Boston Marathon in April wearing the Cloudboom Strike LS, the brand’s first running shoe to carry the new technology, which will hit the market this autumn, retailing at $330. The Cloudboom Strike LS weighs just 170 grams, considerably less than the lightest running shoes on the market currently, which typically start from 180 grams.

Innovations like this are crucial for sneaker brands, who need to keep finding new ways to keep people excited about (and buying) their products. This is especially true for newer brands known for one core product or technology. On’s foundational appeal is the unique look and feel of its CloudTec midsole, but that has existed for over a decade now, which is a long time in the highly competitive running footwear market.

Much like CloudTec, LightSpray was inspired by a weird and wonderful spark. This time, it was a glue gun designed to create Halloween costumes that got the team at On Labs thinking about how they could create running shoe uppers with the single spray of a robotic arm, said Ilmarin Heitz, On’s senior director of innovation.

Not only does the technology give a boost to the athletes using On’s footwear, but the greatest value of LightSpray is the production capabilities it gives the brand, Heitz said. The relative speed and ease of production mean more products can be manufactured closer to home, while the process generates 75 percent less carbon emissions compared to On’s other racing footwear, the brand says. One shoe takes just six minutes to produce from start to finish, On says, up from a weeks-long process for the creation of regular footwear. Heitz said the team at On Labs had already produced thousands of units from the brand’s Zurich headquarters using the one robotic arm.

The development of the LightSpray technology is well timed for On. There is no better stage for a sportswear brand to exhibit a new product or technology’s performance capabilities than the Olympic games, and several of the brand’s athletes have already committed to competing in the Cloudboom Strike LS in Paris this summer. On will take its technology on the road during the games with live manufacturing demonstrations in Paris. The brand is also working on the development of running spike footwear using the new technology, Heitz told BoF.

On plans to roll the technology out across other performance footwear models and is thinking about how it can be applied to lifestyle silhouettes in the long term.

“The only reason why innovation is justified is when you can scale it,” Heitz said.

On’s strides in athletic footwear come as the brand simultaneously invests further in its lifestyle categories and cultural partnerships. In recent months it has launched its tennis apparel category, expanded its long-running Loewe collaboration, released collections with Beams and Post Archive Faction, and announced high-profile partnerships with FKA Twigs and Zendaya.

The Zurich-based running sneaker brand remains in high-growth mode. It reported record quarterly net sales of CHF 508.2 million ($560.9 million) for the period ended March 31, up 21 percent year-over-year. The bulk of the growth was driven by the expansion of its direct-to-consumer business, which generated revenue of CHF 190.5 million, up 39 percent compared to the same period in 2023. Meanwhile, net income increased by 106 percent to CHF 91.4 million ($100.1 million), up from CHF 44.4 million.

Swatch Group AG’s shares fell the most in four years after sales and profit plunged amid a China-led slowdown for Swiss watchmakers and other luxury companies.

The group, whose brands include Omega, Blancpain and jeweller Harry Winston, reported a 70 percent drop in operating profit and 14 percent drop in sales for the first six months of the year.

Swatch Group shares fell as much as 10 percent in early Zurich trading, the most since March 2020.

The results underscore the downturn in demand for luxury goods in China as consumers in that key market shun purchases of pricey items. Swatch Group chief executive Nick Hayek, in an interview, said the company has cut production by more than 20 percent while keeping its workforce intact to ride out the downturn.

“The big impact is really mainly China,” he said.

Hayek said he expects the Chinese market including Hong Kong and Macau to remain challenging for the entire luxury goods industry until the end of the year. Entry-priced brands such as Swatch and Tissot will fare better than luxury brands such as Omega, Blancpain and Breguet, he said.

RBC analyst Piral Dadhania said the Swatch Group results are worse than expected and he anticipates “material earnings downgrades.”

Bernstein analyst Luca Solca called the report “really bad,” and said the company’s key Omega brand may be suffering from more availability of models at retail from rival Rolex, the top Swiss watch brand.

Like other luxury watchmakers, Swatch has been under pressure since soaring inflation caused consumers to curb spending after a pandemic boom. Less wealthy buyers have been squeezed the most, hitting sales of entry and mid-priced models.

Management at the company, which is controlled by Switzerland’s Hayek family, has also clashed with some shareholders who have criticised corporate governance and share-price performance. Swatch shares have declined about 17 percent in 2024.

Hayek said the company is retaining workers to avoid the “short-term thinking” typical of many publicly traded firms, in order to be ready when the market recovers. Otherwise, he said, it would have slashed the workforce by more than 30 percent.

By Andy Hoffman

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Swatch Shakes Up Executive Committee as Luxury Slowdown Persists

Chief controlling officer Peter Steiger, a 35-year veteran of the Biel, Switzerland-based company, will retire and leave the group, according to a statement Thursday.