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Market Monitor SUMMER 2020
Select Consumer & Retail Tombstones 2 Online Retail
Online Retail Sales Posting Strong Growth and Market Penetration
Industry Update Global Ecommerce ($ in trillions)
• While the total impact that COVID-19 has had on the economy is still yet to be $8.0
determined, the recent trend of consumer preference away from brick and
mortar towards online retail has been accelerated, and should continue to $7.0 $6.5
grow off of its new base in the post COVID-19 economy.
$6.0 $5.6
• The U.S. Department of Commerce reported that online retail sales reached $4.8
$5.0
$160.3 billion in Q1 2020, an increase of 14.8% as compared to Q1 2019. By $4.1
contrast, total retail sales experienced an increase of only 2.1% for the same $4.0 $3.5
period. Ecommerce sales accounted for approximately 11.8% of total retail
sales in Q1 2020. With many consumers now exposed to the ease and $3.0
reliability of online shopping across multiple product categories, online sales
are expected to continue to gain market share and are estimated to reach $2.0
13.4% of total retail sales by 2021.
$1.0
• Global ecommerce sales are projected to reach $6.5 trillion by 2023,
$0.0
representing a robust 4 year compound annual growth rate (“CAGR”) of
2019 2020P 2021P 2022P 2023P
16.6%.
U.S. Online Sales as a Share of Total Retail Sales ($ in millions USD)
$180,000 12.0%
Total Retail Sales ($) E-commerce as a Percent of Total Retail Sales
$160,000
Percentage of Total Retail Sales
10.0%
Total Online Retail Sales
$140,000
$120,000 8.0%
$100,000
6.0%
$80,000
$60,000 4.0%
$40,000
2.0%
$20,000
$- 0.0%
3 Online Retail Source: U.S. Department of Commerce, Statista
The Impact of COVID-19 on U.S. Ecommerce
Industry Update Daily Online Sales Growth in April 2020
• The impacts of COVID have not been linear across all of ecommerce, as 120% 110%
100%
certain sectors in online sales have seen greater growth than others. It is 100%
likely that many of the previously slower adopting sub-segments, like online- 74%
80% 58%
grocery, have experienced a catalyst and established fundamental shifts in 60% 49%
consumer behavior that is likely to accelerate online sales in those specific 40%
channels over the longer term. 20%
0%
• From March to April, U.S. Ecommerce average daily sales increased 49.0%, U.S. Ecommerce Books Electronics Grocery Wine & Spirits
with online grocery sales leading the pack, illustrating the increased use of Sales
online grocery orders during the COVID-19 crisis.
Online Grocery Sales ($ in billions USD)
• Total online grocery sales have increased by $1.3 billion, or 32.5% from $6.0 $5.3
March to April, with total online grocery orders have also increased from 46.9
$5.0
million orders in March, to 62.5 million orders in April, representing a 33.3% $4.0
growth rate. $4.0
$3.0
• Many companies have reduced their marketing spending to bolster other $2.0
parts of their businesses during the COVID-19 uncertainty. As a result, the $1.0
cost of advertising has significantly decreased, evidenced by Global Facebook
$0.0
CPMs hitting an all-time low in April, dropping to $1.08. Lower ad costs allow Mar-20 Apr-20
companies that are continuing to spend on advertising an opportunity to
acquire customers at lower costs. Change in Average Digital Ad Spending March 2020
• While many ecommerce companies are experiencing rapid growth, (35%) Digital Audio
traditional brick and mortar retailers have experienced headwinds in their
(34%) Digital Display
businesses, with 11 large retailers filing for bankruptcy so far in 2020.
(32%) Digital Video
• This exposure to physical retail is expected to have an adverse impact on
(28%) Social Media
M&A valuations, as companies with higher concentration in physical retail
will be devalued due to higher perceived risk, and those with strong (25%) Paid Search
ecommerce sales to be rewarded with higher multiples.
(40%) (35%) (30%) (25%) (20%) (15%) (10%) (5%) 0%
Source: Digital Commerce 360, Brick Meets Click, eMarketer, Adobe Analytics
4 Online Retail
Public Company Valuations
$ in millions, except share price TTM Data NTM Estimated Growth EV Multiple
Share Market Enterprise EBITDA TTM TTM NTM NTM
Company Name Price 52wk High / Low Cap Value Revenue EBITDA Margin Revenue EBITDA Revenue EBITDA Revenue EBITDA
Mid/Small Cap
Stamps.com Inc. $186.58 $221.73 / $36.69 $3,328 $3,195 $587 $127 21.6% 5.2% 24.1% NM 25.2x NM 20.3x
1-800-FLOWERS.COM, Inc. $23.28 $25.51 / $11.15 1,546 1,481 1,331 124 9.3% 6.6% (22.3%) 1.11x 12.0x 1.04x 15.4x
Revolve Group, Inc. $16.52 $48.36 / $7.17 1,060 986 610 50 8.3% (2.4%) (41.5%) 1.62x 19.5x 1.66x NM
Overstock.com, Inc. $21.16 $29.75 / $2.53 779 768 1,443 (95) (6.6%) 12.6% NM 0.53x NM 0.47x NM
PetMed Express, Inc. $35.66 $41.59 / $15.00 715 612 284 33 11.7% 5.4% 9.3% 2.15x 18.4x 2.04x 16.8x
U.S. Auto Parts Network, Inc. $7.76 $9.58 / $1.01 280 285 294 4 1.3% 4.1% 177.7% 0.97x NM 0.93x 25.9x
Liberty TripAdvisor Holdings, Inc. $3.03 $12.88 / $0.86 227 3,321 1,462 239 16.3% NA NA 2.27x 13.9x NA NA
Lands' End, Inc. $6.84 $18.39 / $4.05 222 668 1,405 68 4.9% (3.0%) (20.3%) 0.48x 9.8x 0.49x 12.3x
Duluth Holdings Inc. $5.41 $17.09 / $2.82 175 431 611 66 10.8% (6.4%) (61.2%) 0.70x 6.5x 0.75x 16.8x
Average $926 $1,305 $892 $69 8.6% 2.8% 9.4% 1.23x 15.0x 1.06x 17.9x
Median $715 $768 $611 $66 9.3% 4.7% (20.3%) 1.04x 13.9x 0.93x 16.8x
Large Cap
Amazon.com, Inc. $2,478.40 $2,525.45 / $1,626.03 $1,251,592 $1,280,451 $296,274 $41,037 13.9% 20.6% 14.8% 4.32x NM 3.58x 27.2x
Booking Holdings Inc. $1,725.97 $2,094.00 / $1,107.29 73,221 75,246 14,517 5,893 40.6% (51.5%) (81.6%) NM 12.8x NM NM
Wayfair Inc. $181.61 $197.06 / $21.70 16,880 18,500 9,512 (724) (7.6%) 37.7% NM 1.94x NM 1.41x NM
Expedia Group, Inc. $89.14 $144.00 / $40.76 12,964 17,713 11,667 1,244 10.7% (48.8%) (85.3%) 1.52x 14.2x NA NA
Etsy, Inc. $80.66 $88.02 / $29.95 9,997 10,047 877 118 13.4% 39.5% 142.2% NM NM NM NM
Farfetch Limited $15.07 $23.43 / $5.99 4,940 4,964 1,178 (295) (25.0%) 22.1% NM 4.21x NM 3.45x NM
Average $228,266 $234,487 $55,671 $7,879 7.6% 3.3% -2.5% 3.00x 13.5x 2.82x 27.2x
Median $14,922 $18,106 $10,590 $681 12.0% 21.3% (33.4%) 3.08x 13.5x 3.45x 27.2x
All Companies
Average $91,862 $94,578 $22,804 $3,193 8.2% 3.0% 5.1% 1.82x 14.7x 1.58x 19.2x
Median $1,546 $3,195 $1,331 $68 10.7% 5.3% (20.3%) 1.57x 13.9x 1.23x 16.8x
Note: Not meaningful (NM) if EV/Sales is greater than 10x, or EV/EBITDA is greater than 40x. NA if denominator is 0, for percentages and multiples, or if estimates are not available. NTM figures are based on the
median estimate of Wall St. analysts.
Source: CapitalIQ, company filings.
5 Online Retail
Select, Recent M&A Activity
$ in millions
Closed EV/ EV/
Date Target Acquirer/Investor Target Description Implied EV Revenue EBITDA
Announced PersonalizationMall.com, LLC 1-800-Flowers, Inc. Retails personalized gifts online for various occasions $252.0 1.68x -
Announced Bricklink Limited LEGO A/S Operates an online platform to buy and sell new and used LEGO parts - - -
Announced Made in America Company, LLC Made in America Movement Operates an internet based marketplace for products made in America - - -
Announced e-commerce Business of Emerald Valley CBD For The Earth Corp. Provides online retail of CBD (cannabidiol) infused products - - -
Announced Fstop Labs Business of QUBOT LLC Harris Technology Group Limited Comprises a business that supplies drone accessories online - - -
Jun-20 Wise Gull, Inc. d.b.a. Blenders Eyewear Safilo Group S.p.A. Manufactures and sells eyewear for men and women online $91.3 2.34x -
Apr-20 CustomInk, LLC Great Hill Partners, LP; HarbourVest Partners, LLC Offers shirts, caps, and other custom products online - - -
Apr-20 Creative Market Labs, Inc. Dribbble Holdings Ltd. Operates an online platform for purchasing and selling handcrafted products - - -
Apr-20 Pure Fix Cycles, LLC JBI, LLC Manufactures and sells bicycles and accessories online - - -
Apr-20 Motiv Inc. Proxy Technologies, Inc. Develops and sells rings and wearable products for fitness online - - -
Apr-20 Mati Inc. NOBL Coffee, LLC Produces and sells energy drinks both in-store and online - - -
Apr-20 SpringStar Inc. Willert Home Products, Inc. Develops, manufactures, and sells non or low toxic pest control products online - - -
Apr-20 Outdoor Technology Protempo US Limited Manufactures and sells rugged audio and power products online - - -
Apr-20 One Kings Lane, Inc. CSC Generation, Inc. Operates an online shop for designer, vintage, and home furnishings - - -
Apr-20 eLuxury, LLC Private Investor Manufactures and distributes bed, bath, home, and garden products online - - -
Apr-20 Winopoly, LLC Fluent, LLC Operates an online platform that brings buyers and sellers together - - -
Apr-20 Marucci Sports LLC Compass Diversified Holdings LLC Offers baseball and softball equipment on their website $200.0 - 13.3x
Mar-20 Tactics TSI Holdings Co.,Ltd. Offers skateboarding, snowboarding, and apparel products both in-store and online - - -
Mar-20 Dermserv LLC Emerald Organic Products Inc. Operates as an online pharmacy - - -
Mar-20 All Assets of AOL MovieFone, Inc. Private Investor Operates as an online movie and television content business $1.1 - -
Mar-20 weatherTAP, inc. The Cosby Harrison Company Offers subscription based online weather services - - -
Mar-20 Scuf Gaming International, LLC Corsair Components, Inc. Manufactures and sells videogame controllers online - - -
Mar-20 Graphic Audio, LLC RBmedia Operates an online platform for audiobooks - - -
Mar-20 Bestop Morris LLC AutoAnything, Inc. Operates an e-commerce platform to distribute automotive parts and accessories - - -
Mar-20 Harper Cycle Works, LLC Nivel Parts & Manufacturing Co., LLC Offers automotive parts and accessories online - - -
Source: S&P CapitalIQ, company filings, and Moss Adams Capital Research.
6 Online Retail
Select, Recent M&A Activity
$ in millions
Closed EV/ EV/
Date Target Acquirer/Investor Target Description Implied EV Revenue EBITDA
Mar-20 Sadler's Smokehouse, Ltd. Hormel Foods Corporation Process and sells pit-smoked meats both online, and in select retailers $270.0 - -
Feb-20 Cloud B, Inc. Pearl 33 Holdings, LLC Manufactures and sells products and accessories online that help children sleep - - -
Feb-20 Beep Technologies, Inc. RepairSmith, Inc. Operates as an online platform for booking auto care and maintenance services - - -
Feb-20 Yandy LLC PEI Holdings, Inc. Offers lingerie and costumes on their website - - -
Feb-20 Budee Inc. Driven Deliveries, Inc. Retails cannabis products online $10.3 - -
Feb-20 Proxibid, Inc. TA Associates Management, L.P. Operates an online platform that connects buyers and sellers of various product categories - - -
Feb-20 Colorado Kayak Supply Twitch LLC Sells paddle sports equipment and accessories online - - -
Feb-20 Blackbird Air Inc. Surf Air Inc. Provides online travel services through its website and mobile application - - -
Feb-20 Laser Pegs Ventures, LLC Markan Industrial Group Ltd. Develops, manufactures, and sells toys and related products online - - -
Feb-20 Gorilla Commerce Trilantic Capital Management L.P. Operates an e-commerce platform for the sale of pet products - - -
Feb-20 Competition Cams Inc. Industrial Opportunity Partners, LLC Engages in the production and sale of camshafts and related products online - - -
Feb-20 Golden State Activewear Holdings, Inc. Broder Bros., Co. Provides the online retail of apparel and accessories - - -
Feb-20 Village Candle Inc. Stonewall Kitchen, LLC Provides handcrafted round candles online - - -
Feb-20 StubHub, Inc. viagogo AG Operates an online marketplace to buy and sell tickets $4,050.0 - -
Jan-20 JFC Travel Group Co. Travelzoo Offers cheap flight deals on their website $20.0 - -
Jan-20 Derek Lam International LLC Public Clothing Company, Inc. Manufactures and sells clothing, shoes, handbags, and eyewear in stores and online - - -
Jan-20 Hello Products LLC Colgate-Palmolive Company Manufactures and sells oral health products online $351.0 - -
Jan-20 Honey Science Corporation PayPal Holdings, Inc. Provides an online service that automatically finds coupon codes for users $4,000.0 - -
Jan-20 King Kylie, LLC HFC Prestige Products, Inc. Develops and sells beauty products online $1,176.5 6.65x -
Jan-20 Wagner Supply Co., Inc. BCPE Empire Holdings, Inc. Offers janitorial products online - - -
Jan-20 Limitless Coffee, LLC Keurig Dr Pepper Inc. Produces and offers coffee and tea on its website - - -
Jan-20 Zija International, Inc. Isagenix International, LLC Manufactures and sells health and wellness products online - - -
Jan-20 Auto List, Inc. CarGurus, Inc. Operates as an online marketplace for new and used cars $22.0 - -
Jan-20 Work World America, Inc. Gart Capital Partners Offers footwear and apparel for work online and in its stores - - -
Median $226.0 2.34x 13.3x
Source: S&P CapitalIQ, company filings, and Moss Adams Capital Research.
7 Online Retail
Overview of Select, Notable Transactions
acquired Announced February 2020
In February 2020, 1-800-FLOWERS.COM, Inc. (“1-800-FLOWERS.COM”) announced its acquisition of PersonalizationMall.com
(“PersonalizationMall”), a leading online retailer that offers thousands of products with a broad range of innovative personalization options, for
$252 million. This corresponds to an implied EV/Revenue multiple of 1.68x.
The deal was set to close on March 30th however, on March 23rd, 1-800-Flowers.com requested to delay the closing until April 30 due to
uncertainty surrounding COVID-19 without offering any assurances that the closing would happen on that date or on any date in the future.
As a result, Bed Bath & Beyond, the current owner of PersonalizationMall.com, filed a lawsuit against 1-800-Flowers.com claiming 1-800-
Flowers.com was “attempting to use the unfortunate challenges presented by COVID-19 as a tactic to avoid its contractual obligations and
unilaterally impose a 30-day extension to suit its interests, with no assurance whatsoever of a firm closing date.”
A spokesman for 1-800-FLOWERS.COM stated, “While we still desire to proceed with the transaction, we maintain that the conditions to closing
the transaction have not been satisfied in light of the consequences of the COVID-19 pandemic, including the shutdown of the
PersonalizationMall.com facilities until at least April 30, 2020” and “we intend to vigorously defend ourselves against this lawsuit.”
As of May 31st, the lawsuit is still ongoing, and the transition remains pending with no date for closure proposed.
acquired April 2020
CSC Generation (“CSC”) has acquired One Kings Lane, a leading online retailer of furniture and home accessories with a mix of proprietary
collections, collaborations and one-of-a-kind finds, for an undisclosed amount.
Justin Yoshimura, founder and CEO of CSC, stated, “they have had an impressive evolution from their beginnings as a flash-sale platform to their
current positioning as a dependable retailer, and we know with our combined expertise there is massive opportunity to take the brand to new
heights.”
Alex DeAngelo, senior manager at One Kings Lane, stated, “we are excited about this major step in driving the next phase of growth for our brand.”
Similar to PersonalizationMall, One Kings Lane was the latest divestiture made by Bed Bath and Beyond as they begin to realign the company’s
brands to regain market positioning lost due to excessive diversification.
Source: Company press releases, S&P CapitalIQ, Reuters
8 Online Retail
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9 Online Retail
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