TheChek News Flow

Sneaker Chains Constrict

Although the sneaker market is performing well and specialty boutiques are expanding, larger sneaker retailers will have to adapt to the shifting market.

While the demand for sneakers continues to increase, it’s no longer enough to sell them in a run-of-the-mill retail environment.

Larger chains including Foot Locker, which closed 24 U.S. stores in 2017, and Shiekh Shoes, a West Coast retailer with 120 stores that filed for bankruptcy in November, must adapt to a changing consumer who wants to buy special product in a thoughtful space and is inundated with alternative ways to purchase shoes — whether that’s an e-commerce site, specialty boutique, resale app, or a festival and marketplace like ComplexCon or Sneaker Con.

“Today I think we have a few too many sneaker stores in the U.S.,” said Yu-Ming Wu, the cofounder of Sneaker Con. “There is an incredible demand for rare sneakers but when it comes to the general release sneakers like Air Jordans, the supply doesn’t meet the demand. Some of these guys have relied on the old model that every Saturday an Air Jordan is going to sell out, but that’s not always going to hold true today.”

Specialty sneaker boutiques are investing in just these types of spaces while regional retailers are becoming global players.

Extra Butter, a sneaker chain that was cofounded by Jason Faustino, Ankur and Nick Amin in 2007, spent close to $1 million to renovate its Lower East Side shop in Manhattan to mimic a movie theater. Sneakers and clothes are displayed on the perimeter of the store and theater seats sit in the center. The outside of the flagship features a marquee and a ticket window. When the store is closed, a screen comes down over the storefront that streams movies throughout the night. They’ve also decreased the amount of inventory they sell in store to only display a top selection of the brands they carry.

Bodega, a Boston-based streetwear and sneaker retailer that’s known for its faux-bodega storefront that leads to a store, is opening a shop in Los Angeles. Sneakersnstuff, which was founded by Erik Fagerlind and Peter Jansson in Sweden almost 20 years ago, opened its first New York store in December. The 3,500-square-foot shop, which was designed by Jenny Askenfors of Bofink Design Studio, features a basement bar that will be open to the public and will showcase exhibitions and activations on the first floor.

Fagerlind said Sneakersnstuff does 80 percent of its business online, but physical retail remains a significant part of its growth strategy and maintaining its relationships with big vendors. “In a world where everything is available and accessible, you have to provide a little bit more than product,” he said. “You have to provide the service to be relevant with your consumer.”

Wu believes that retailers such as Foot Locker are too big to fail, but they will have to respond to the market — quickly — especially as Nike expands its pilot with Amazon.

A spokesman for the Swedish fast-fashion retailer declined to comment on a report that it plans to launch the new platform in April.

PARIS — Hennes & Mauritz AB has declined to comment on a media report that it is planning to launch a platform selling branded clothes at discount prices.

According to Breakit, a Swedish web site reporting on tech companies and startups, the high-street giant is working on a large-scale digital project known by the code name P12, which is being described in-house as “the style and deal-hunting paradise.”

Breakit said 60 brands have agreed to join the platform, due to be launched in April. Kristina Stenvinkel, head of communications at H&M, responded: “We always have a lot of interesting projects going on and that we don’t comment on rumors.”

The fast-fashion giant has been struggling to maintain sales momentum in the face of growing competition from e-commerce, and has responded by multiplying its brands and sales formats.

Last year, it launched Arket, which sells minimalist Scandinavian-inspired clothing as well as a selection of shoes, accessories and home ware from brands including Adidas, Converse, Nike and Reebok alongside niche labels such as Brio, Goki and Hario.

In the coming months, it will unveil Nyden, an affordable luxury label aimed at Millennials that will focus on collaborations, working with personalities such as tattoo artist Doctor Woo and Swedish actress Noomi Rapace to create collections destined to be sold via pop-up stores and online.

Following a disappointing fourth-quarter performance that sent its share price tumbling to its lowest price in eight years, all eyes are on the company’s Capital Markets Day, scheduled for Feb. 14 in Stockholm. Karl-Johan Persson, chief executive officer of H&M, is expected to detail its digital strategy at the event.

Jimmy Iovine will leave Apple in August, four years after his $3 billion deal

The music producer helped launch Apple Music, but he has had a diminished role at the company for a while.

Jimmy Iovine, the legendary music producer turned entrepreneur who sold his Beats Music and Beats Electronics business to Apple in 2014, plans to leave the company this summer.

Iovine’s departure, timed to the end of an employment contract, has been widely discussed throughout the music industry for many months. His stock answer, when asked what will happen when that contract is up in August, has been a version of “I have no idea what I’ll be doing then. I’ll be 65.”

For the record, industry trade publication Hits announced that Iovine would leave in a post this morning. Billboard followed up. Apple, for the record, declined to comment; I haven’t heard back from Iovine.

Iovine, who was brought in to kickstart Apple’s move into the subscription music business, has had a limited role within the company for some time.

Apple Music, the service the company launched a year after buying Beats, is run by longtime Apple exec Robert Kondrk, who reports to content boss Eddy Cue. And while Iovine told reporters last spring that he was spearheading the company’s move into video, he hasn’t had an active role in its billion-dollar push into original TV shows; those efforts are headed by former Sony executives Jamie Erlicht and Zack Van Amburg, who also report to Cue.

An uncomfortable question for Apple: Did it get its money’s worth when it paid Iovine and his partner, Dr. Dre, $3 billion for Beats four years ago — the largest acquisition in the company’s history?

The positive answer: Apple makes real revenue from the Beats headphone line Iovine sold them. And Apple now says it has 30 million paying subscribers for Apple Music, which means it is generating real revenue, even if it is less than the ambitious goals Apple had laid out to the music industry in advance of its 2015 launch. You can attribute some of that to the connections and salesmanship that Iovine brought to Apple as it courted artists for the new service.

On the other hand, you don’t actually need a big-shot music executive to launch a music subscription service — just ask Spotify, run by a Swedish programmer who had no exposure to the music industry when he started the company. Now Daniel Ek has 70 million subscribers, and is headed for a $20 billion IPO this year.

Constellation Brands beats on EPS and revs; raises FY18 guidance (225.79)

* Reports Q3 (Nov) comparable earnings of $2.00 per share, $0.11 better than the Capital IQ Consensus of $1.89; revenues rose 9.3% year/year to $1.98 bln vs the $1.87 bln Capital IQ Consensus.

* Shipment growth was below depletion growth primarily due to timing. Year-to-date shipments grew at almost 8.5%. The beer business continues to target high-single digit volume growth and 9% - 11% net sales growth for fiscal 2018, with EBIT growth in the 18% - 19% range./ Operating margin increased 290 basis points to 37.7%, driven primarily by strong operating performance and favorable pricing.

* Co issues raised guidance for FY18, sees EPS of $8.40-8.50 from $8.25-8.40 vs. $8.44 Capital IQ Consensus Estimate.

* Co affirms fiscal 2018 operating cash flow target of approximately $2.0 billion and free cash flow projection of $725 - $825 million. Board of Directors authorizes new $3 billion share repurchase program; $308 million remaining on existing authorization.

* For fiscal 2018, the beer business continues to target net sales growth in the range of 9 - 11 percent and operating income growth is now targeted in the range of 18 - 19 percent. For the wine and spirits business, the company continues to expect net sales to decrease in the range of 4 - 6 percent and operating income to be flat. These projections include the estimated impact of the December 2016 divestiture of the Canadian wine business and the estimated incremental benefits from the High West, Charles Smith and Prisoner acquisitions.

Uber co-founder and former CEO Travis Kalanick plans to sell 29 percent of his stake in the ride-hailing service, a news report said Thursday.

The deal is part of a transaction with investors including Softbank Group Corp. and would bring Kalanick about $1.4 billion, Bloomberg reported, citing unidentified sources. It said Kalanick previously said he never had sold Uber shares.

Bloomberg didn’t respond to an email seeking comment.

Kalanick, who owns 10 percent of Uber, resigned as CEO last year following revelations of sexual harassment in the company, technological trickery designed to hinder regulators and a cover-up of a hacking attack that stole personal information of 57 million passengers and 600,000 drivers.

Bloomberg said Kalanick offered to sell up to half his stake but reduced that due to limits in the agreement between Uber and the buyers.

Uber was valued around $68.5 billion during a 2016 capital investment, but that dropped to somewhere above $48 billion in the SoftBank deal announced last week.

Despite that, early investors stand to make significant gains.

A 405kg bluefin tuna sold for ¥36.5m ($323,000) in the final new year’s auction at Tsukiji fish market as the Tokyo landmark prepares to move to a new site.

The Hain Celestial Group cannot find a buyer for the $4.2 billion market-cap company — despite being informally for sale for roughly a year, four sources familiar with the situation told The Post.

Founder and Chief Executive Irwin Simon built his New York organic-foods powerhouse to ultimately sell it, sources said, but failed to find a buyer because he expanded the company to include too many brands, the sources said.

No one brand is large enough to entice a suitor to pay Simon’s asking price, sources said.

Simon on Thursday declined to say whether Hain has been informally for sale but conceded that a public company like his is always available at the right price.

Hain, best-known for brands like Celestial Seasonings teas, Terra chips, Garden of Eatin’, Rudi’s and Earth’s Best, also has a stable full of lesser- known brands that represent a significant number of sales.

For example, its low-margin antibiotic-free chicken and turkey division accounted for 18 percent of sales in the year ended June 30.

Simon has been trying to build certain brands to make Hain more mainstream.

“Maybe [the sale plan] will involve selling some of my more lower-margin businesses,” Simon said.

The breakdown in the sales process could take some steam out of Hain’s shares.

In November, Nestle SA was in preliminary talks to buy Hain, according to several reports — causing Hain’s shares to spike roughly 20 percent, to above $41 a share.

On Thursday, Hain closed at $40.60.

Nestle has told Hain it is interested in buying the business if it first sells its chicken and turkey division, a source said.

“I’ve said this year we are looking at a strategic overview of all of our business, and some things may not fit,” Simon told The Post. “We have not made any decisions” although the chicken and turkey division is a divestiture candidate.

Simon said Hain’s biggest customer is Amazon, which represents 10 percent to 11 percent of sales. Over the past year, Hain has reduced the number of different products it sells to Amazon’s Whole Foods by half — to 700.

“We went through a major SKU rationalization this year,” Simon said.

Hain’s goal, he says, is to boost sales for its most valuable brands to lift its trading multiple or to sell Hain to a large consumer foods company that is willing to pay a premium for the potential growth.

Shareholder activist Engaged Capital in September gained Hain board seats and is believed to be pushing for a sale, sources said.