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Posted: 2020-10-08 20:43:38

@chamath My latest on the need for the eCom industry to adopt SPACs. I've unlocked it. https://t.co/RWPcA5rh6a

Traditional retail is hurting and should invest in the future with DTC acquisitions, not the past

From Web Smith (@web) at #(from:web) Tweets with Links
Originally published 2020 10 05
Mall ownership groups are acquiring dying brands with the hope of propping up existing rent revenues in the short term while benefiting from licensing deals in the longer term. Authentic Brands Group is on the acquisition hunt, after bolstering its war chest by $600 million. CEO Jamie Salter said the cash injection from BlackRock, General Atlantic and Leonard Green & Partners now brings the apparel licensing firm’s total cash up to $1 billion, according to CNBC. [5]
Against the backdrop of Simon Property Group, Brookfield Properties, and Authentic Brands Group acquiring struggling specialty retailers like Brooks Brothers, Ascena Retail, and JCPenney: I’d contend that it’s the top digitally-native brands that they should be the acquisition targets. As eCommerce continues to claw more and more of a percentage of overall retail spend, it’s an opportunity for traditional retail to invest in the next iterations of the brands that will carry their remaining malls and strip centers, and online stores – forward. These are brands with $1 billion or more in prospective market capitalization. The ideal format for the DTC Acquisition Corporation is one funded with the help of the top consumer investors and co-managed by the retail development groups that will need these brands in each of their developments. In the next few years, traditional retail will be a shell of what we see today. New companies will need to take their places. It’s incumbent upon these management groups to consider whether investing in the past is more reasonable than investing in their industry’s future. If you’re reading this, you understand the correct approach.
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