In the News: Walgreens Ends Theranos Partnership
Editor’s Note: Welcome to our newest feature, Total Retail Report’s In the News section, where we will highlight and offer our take on the top retail-related news articles of the day. Please let us know what you think about this new feature by posting a comment below.
Walgreens Ends Theranos Partnership
Walgreens announced last week that it will terminate its relationship and close operations at all 40 Theranos Wellness Centers at its stores in Arizona, effective immediately. This is the latest in a string of bad news for Theranos, the embattled blood-testing technology company. Walgreens will no longer offer Theranos services at any of its stores.
While Walgreens’ relationship with Theranos didn't work out, it is indicative of a larger trend of drug stores beginning to offer more healthcare services as a way to augment their businesses. CVS’s MinuteClinics are currently the largest provider of retail health clinics. Nationally, the company has cared for more than 20 million patients, with a 95 percent customer satisfaction rating.
Microsoft to Acquire LinkedIn
Microsoft announced today that it has acquired LinkedIn for $196 per share in an all-cash transaction valued at $26.2 billion. According to a statement from Microsoft, LinkedIn will retain its brand, culture and independence. Jeff Weiner, CEO of LinkedIn, will remain in his position and will report to Satya Nadella, CEO of Microsoft.
I've yet to see what this means for retailers specifically, but one can assume that it will have a big impact on everyone who uses LinkedIn for networking, job hunting, keeping in touch, etc. I'll be closely following this news and what it means for the retail industry, and will report back.
Struggles for Restoration Hardware
Restoration Hardware (RH) is having a rough time. Last week, the company slashed its sales outlook for the year based on disappointing results from the first half of the year. Comparable sales, a measure of online sales and sales at stores open more than a year, were up 4 percent, but that marked a dramatic slowdown from the 15 percent year-over-year growth RH saw in the same quarter last year.
Reasons for RH's downward spiral range from supply chain issues — some vendors have had problems revving up production of its RH Modern pieces — to less foot traffic in its stores. Restoration Hardware also has a history of being dismissive towards e-commerce. Whatever the reasons, this latest earnings report from RH underscores how volatile today's retail climate is and how varied the pressures are in the fight for sales and market share.
Hastings Entertainment Files for Bankruptcy Protection
Hastings Entertainment, a retailer that combines the sale of new and used books, videos, video games and music, and consumer electronics merchandise with the rental of videos and video games in a superstore, has filed for bankruptcy protection and is in search of a buyer.
As online sources of entertainment began to dominate (e.g., Netflix), Hastings’ revenues declined in parallel with the market for physical movies, music, books and games. Hastings’ cost-cutting campaign and emphasis on product lines such as children’s products, comics and hobbies weren’t enough to reverse the downward trend.