Constant Sales Strain Retailers; Snap Will Raise $1B

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Deal Days

It seems there’s a major sale happening. And while this new normal is great for consumers, it creates pricing pressures that are particularly tough for apparel chains, which have to pay more to promote their own deals over the noise and now face low profit margins throughout the entire year. Back-to-school sales used to be “like a fistfight in the stores,” said Levi Strauss & Co CEO Chip Bergh. “Consumers are numb to all the promotional activity,” he said. “So a 20% back-to-school offer is no different than whatever is going to happen in early September, when it’s going to be 20% off anyway.” More.

R&D Time

Snap raised $1 billion in short-term debt on Tuesday to invest more in media and augmented reality and make potential acquisitions. The platform will offer senior convertible notes that mature in 2026 and will be paid out in cash or stock. The messaging platform is getting back to growth as new features like gaming and an expansion on AR lenses attract more advertisers. But while Snap has a unique window into the elusive Gen-Z audience, it’s facing growing competition from apps like TikTok and Instagram, Reuters reports. Snap wants to get ahead of its investments while interest rates are low and demand for convertible rates are strong, CEO Evan Spiegel said in a note to employees. More.

Commitment Costs

Karey Burke, president of ABC Entertainment, is touting the broadcaster’s commitment to content compared to streaming services like Netflix and Amazon Prime. Burke said ABC supports shows for longer runs, while many streaming series peter out after a couple seasons without continued marketing, Adweek reports. She also noted that competitive streaming services increasingly want to advertise on ABC airtime, but the network won’t let them. Just like these major telco-TV networks are hoarding their own shows and movies to juice the value of their subscription libraries, they’re carefully balancing the pros and cons of taking each other’s marketing dollars. Will Hulu let YouTube TV target its viewers with an offer directly undercutting its service? Will Comcast allow Amazon Prime Video to promote its shows, when it’s fighting against cord cutting and has a rival streaming alternative? Those answers are increasingly an easy “no.” More.

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