Industry Trends
Yum Brands Acquires Social Media Ordering Platform TickTuk
Yum Brands, a restaurant group that owns KFC, Taco Bell, Pizza Hut, and Habit Burger Grill, has acquired Ticktuk. This company allows customers to order food while on social media and messaging apps. The financial terms of the deal were not disclosed. Yum’s digital ordering saw record highs in 2020, with digital sales reaching $17 billion, up 45% from 2019. Along with the all-cash acquisition of Kvantum, Yum is expecting to double down on its digital sales in 2021.1
Order Limiting U.S. Cruises Stays in Effect Until November 1, 2021
The CDC is holding firm on a phased return to cruise-line operations, damaging the industry’s hopes for a quick restart. The Cruise Lines International Association, which includes Carnival Corp. and Norwegian Cruises, issued a statement calling for the order to be dropped and for sailing to be allowed to resume in July. The current order replaced the previous no-sail order in October and created a multistep process by which cruise lines might seek approval to return to U.S. waters. No company has yet achieved the full go-ahead.2
The Pandemic Creates a ‘Postwar Boom’ for Luxury Carmakers
Many of the world’s luxury car manufacturers have been vocal about how well they are performing amid the COVID-19 pandemic. According to Bentley’s Adrian Hallmark, the British company “began with the strongest order bank since 2003” and is posting a 50% increase in orders for January 2021 compared to last year. Bugatti, Lamborghini, and others are have posted strong financial performances during the pandemic as well. As early as July 2020, analysts at Technavio predicted that the U.S. luxury car market would grow by about 6.7 million units from 2020 to 2024.3
COVID Pandemic sets the Hotel/Hospitality Industry Back by Years
The hotel and hospitality industry is not expected to recover until 2024 due to the pandemic. According to the American Hotel and Lodging Association's industry report, over 670,000 hotel industry jobs and 4 million hospitality jobs were lost during the pandemic. The unemployment rate for the industry is at 18.9% as of December, according to the Bureau of Labor Statistics. Hotel occupancy is at 24.5%, down from 66% in 2019, resulting in historically low revenues for the industry.4
Retail Sales/Manufacturing Slip In Q1 Ahead of Expected Spring Rebound
Retail sales fell by 3% in February after January sales were propped up by stimulus payments from the December pandemic-relief package. Severe weather in February has played a role in the decrease in sales and the 2.2% decrease in seasonal production for the quarter. The industry is expected to rebound in the spring, due to another round of government stimulus.5
Computer Chip Shortage Affects Multiple Industries
A computer chip shortage began due to increased demand for personal computers and other electronics for work/school during the pandemic. Now, the shortage threatens car production as well. Major car manufacturers including, Ford, Honda, and GM, have slowed vehicle production due to the chip shortage, while AMD and Qualcomm struggle to keep up with demand. Sony has also blamed the chip shortage for its’ slow PlayStation 5 production.6
Apparel Industry Concentrates on Digital Sales, Fashion Apparel Returns
Digital acceleration remains a priority in the apparel industry for 88% of retail executives going into 2021, according to a Deloitte survey. During the pandemic, digital sales and engagements in the industry skyrocketed, asthe majority of retailers are expecting the demand for online engagements to continue. The fashion retail space could also see a faster recovery than others in the sector, as analysts expect a return to more in-person shopping with fashion being at the forefront.7
Consumer Electronics Retail Sales Are Expected to Grow in 2021
U.S. Consumer Electronics sales are expected to increase by 4.3% in 2021, according to a forecast by the Consumer Technology Association. This increase would bring the industry value to about $461 billion. Recent growth in industry sub-sectors, including video streaming, is expected to create tailwinds for the overall industry. The forecast is also based on expectations of next-gen console sales from Sony and Microsoft. The Consumer Technology Association expects overall spending in the sector, particularly on software and streaming services, to slow down to 11% in 2021 compared to 31% in 2020.8
Largest Transactions Closed
- Target
- Buyer
- Value($mm)
- Tiffany & Co.
- LVMH Moët Hennessy - Louis Vuitton, Société Européenne
- $18,919.76
- Collectors Universe, Inc.
- Cards Parent LP
- $870.53
- Substantially All Assets of NPC International, Inc.
- Wend American Group LLC; Hut American Group LLC
- $816.00
- Pet Supplies Plus, LLC
- Franchise Group, Inc.
- $700.00
- Fresh Direct, LLC
- Centerbridge Partners, L.P.; Ahold Delhaize USA, Inc.
- $550.00
- DTLR Villa LLC
- JD Sports Fashion plc
- $495.00
- DermStore, LLC
- THG Plc
- $350.00
- ZAGG Inc
- Evercel, Inc.
- $242.52
- KingsIsle Entertainment, Inc.
- Media and Games Invest plc
- $210.00
- Azamara Club Cruises, Inc.
- Sycamore Partners Management, L.P.
- $201.00
Source S&P Capital IQ as of 4/12/2021 and PCE Proprietary Data
Contacts
Contacts
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Data Assumptions This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only. Glossary EBIT - Earnings Before Interest and Taxes Sources:
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