Publishing this special report of the happenings in the Retail and Consumer Tech world as of Dec 22, 2024:
Party City Shutters Operations
Party City, the renowned retailer for party supplies and costumes, has announced the closure of nearly 700 stores and filed for Chapter 11 bankruptcy protection for the second time in two years. The company cited challenges such as inflation, increased costs, and declining consumer spending as reasons for this decision. Despite previous restructuring efforts in 2023 that eliminated almost $1 billion in debt, Party City could not overcome the current economic challenges. The New Jersey-based retailer plans to retain over 95% of its 12,000 employees during the shutdown process and is offering going-out-of-business discounts of up to 50% on its website.
Starbucks Workers Initiate Nationwide Strike
Starbucks baristas across multiple cities, including Los Angeles, Chicago, Seattle, New York, New Jersey, Philadelphia, and St. Louis, have initiated a strike just before the Christmas rush. The workers, represented by the Starbucks Workers Union, are demanding better economic packages and living wages, highlighting the company’s refusal to negotiate fair terms. Despite several months of contract negotiations, workers feel Starbucks has failed to offer a viable economic package. The union plans to escalate the strike each day through Christmas Eve unless an agreement is reached. Starbucks maintains that it offers competitive pay and benefits, including healthcare, free college tuition, and paid family leave.
Walgreens Explores Sale to Private Equity
Walgreens Boots Alliance, a major US pharmacy chain, is negotiating a potential sale to Sycamore Partners, a private equity firm known for investing in struggling retailers. This initiative comes as Walgreens faces challenges from high inflation, reduced consumer spending, and intense competition. With over 12,500 stores globally, Walgreens plans to shut down 1,200 locations due to significant financial losses, reporting a nearly $9 billion net loss in the 2024 fiscal year. This marks a significant decline from its 2015 peak market value of $106 billion to approximately $8 billion. Analysts suggest that Sycamore may need additional partners to finalize this purchase and potentially restructure Walgreens more effectively away from public scrutiny.
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