Today in Retail: Vroom Names New CEO; Simon Property Group CEO Dismisses Kohl’s Buyout Rumors

Today in retail, Peloton is facing the daunting prospect of a turnaround along with a transition to an app-based model, while inflation has consumers rethinking their subscription services. Plus, Designer Brands launches Warehouse Reimagined, an immersive, experienced-based retail concept.

Peloton’s ‘Exhausting’ Turnaround Faces Uphill Shift From Bikes and Treadmills to App

Shares of Peloton slumped to a new low Tuesday morning (May 10) after the embattled connected fitness company posted a $750 million loss and said the pace of new subscriber growth fell 50% last quarter.

The news triggered a 20% sell-off in the stock, which had already fallen 70% in the past six months, and marked the first quarter of earnings results under new CEO Barry McCarthy, who thanked the company’s 7 million members for their loyalty and 8,000 employees for their continued hard work, noting that the path forward would continue to be challenging for at least another year.

Auto eTailer Vroom Names New CEO As eCommerce Sales Spike

Online used car buying and selling platform Vroom has named Thomas Shortt as its new CEO as part of a business realignment plan that’s focused on long-term profitable growth through cost reductions and operating improvements.

Shortt looked ahead to the future of Vroom during the company’s 2022 first-quarter earnings call Tuesday (May 10), with a focus on targeted unit sales, a workforce reduction and continued regionalization of the business with reduced marketing expenses.

Vroom sold 19,473 cars in Q1, up 26% compared to the same period last year, and generated $675.4 million in eCommerce revenue, up 60% compared to the previous year.

Designer Brands Unveils Immersive ‘Warehouse Reimagined’ Concept

Designer Brands Inc., the parent company of shoe retailer DSW Designer Shoe Warehouse, joined the immersive, experience-based retail trend with the debut of its Warehouse Reimagined retail store format, according to a Tuesday (May 10) company press release.

The Warehouse Reimagined design is part of Designer Brands’ plan to have its owned brands account for nearly 30% of sales by 2026.

Simon Property CEO: Don’t Believe Rumors, Buying Own Stock Better Opp Than Bid for Kohl’s

Billionaire shopping mall magnate David Simon said Monday (May 9) that a 30% six-month drop in shares of Simon Property Group presents a more compelling investment opportunity than making a reputed bid for embattled department store chain Kohl’s.

The outspoken chief of the Indianapolis-based REIT, which owns a global portfolio of retail, office and hotel properties as well as stakes in ventures that control dozens of brands including JCPenney, Reebok and Eddie Bauer, was also unequivocal about the opportunity in the domestic market. The three-month period ending March 31 marked Simon’s best quarter of deals since 2016 and the lowest occupancy cost in seven years.

Inflation Prompts 10x Increase in Consumers Reevaluating Subscription Value

Inflation is impacting how consumers look at their spending. The Subscription Commerce Conversion Index, a PYMNTS and sticky.io collaboration, reveals that consumers are factoring in the added costs of inflation when evaluating enrollment with a new subscription service.

Consumers are looking for value that justifies the new expense, and when it does not, they are choosing to save money. The share of nonsubscribers citing cost as the most important reason why they did not enroll with a retail subscription service was just 2% in October 2021, but 22% in March 2022. Cost was therefore the most important reason for not adding a subscription service.

Younger consumers are not only hesitating to add new subscriptions, but are shedding them faster than other demographics. Younger consumers were the most engaged with subscriptions over the last year, but many are now decluttering their subscription holdings. Generation Z consumers exhibited the highest rates of subscription cancellations in the past year of all age groups at 17%, followed by millennials at 16%, bridge millennials at 14% and Gen X consumers at 11%.