Target extends its investment in online retail disruptor
Fast-growing mattress retailer Casper has closed on a new round of funding — with help from Target Corp.
Casper said it has closed a $170 million Series C investment round, led by Target. The company announced the news on Monday, the day after, as previously announced, Target began selling Casper products in its stores and on its website. Some high-profile entertainers and athletes also joined in the funding round, including Kevin Spacey, Carmelo Anthony, and Shaun White.
The latest round brings Casper's funding to date to $240 million. The new round values Casper at approximately $750 million, not including the new investment, according to the New York Times, which cited a person with knowledge of the financing. The report also said that Casper is aiming for an initial public offering "down the road."
With the new investment, Casper is planning to expand its research and design capabilities with the launch of a design lab in San Francisco, a facility and engineering team dedicated to developing new products to complete the Casper ecosystem — from re-designed soft goods to the future of connected sleep. The funding will also enable the digitally-first brand to traverse online and offline distribution at scale.
Casper, which launched in April 2014, earned $100 million in 2015, and doubled its annual revenue to more than $200 million in 2016. In addition to its mattress, it now offers a line of core sleep products, including the Casper pillow, sheets, foundation, bed frame, duvet, and dog mattress.
"Innovation has always been our catalyst for growth," said Philip Krim, CEO and co-founder of Casper. "As we look ahead to Casper's next chapter, we see the future of sleep driven by unparalleled R&D, and an evolved consumer experience."
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CBRE: E-commerce still lacks traction in some retail categories
E-commerce has generated significant volumes of sales in the electronics and clothing industries, but has yet to gain traction in other retail sectors.
According to research from CBRE, data from the United States Commerce Department revealed extensive e-commerce penetration in certain retail categories such as electronics and appliances, with a 19.5% share of category sales – or $20.4 billion — occurring online. Similarly, $24.2 billion of apparel and accessories sales occurred online, but that amounted to only 9.5% of that sector's overall sales.
General merchandise, which includes department stores and other mass merchandisers, also represents a high volume of Internet sales ($22.5 billion) but a low rate of e-commerce penetration (3.3%).
Yet, other categories, such as food and beverage and motor vehicles, both under 0.1%, remain relatively unscathed. (The Commerce Department data is from 2015, which is the latest available.)
Specifically, food and beverage stores, which consist primarily of groceries and supermarkets, remain among the lowest for e-commerce share at 0.1% and only $1 billion in total internet sales. Meanwhile, motor vehicle and parts dealers feature the lowest rate of e-commerce penetration, as most car sales occur at brick-and-mortar dealerships. This is likely to rise over the coming years as online vendors grow, but the current annual e-commerce sales for this category are just $528 million, according to the report.
“This new data underscores the categories that shopping-center owners will find most resilient amid online sales, including health care, food and beverage, and motor vehicles,” said Melina Cordero, CBRE head of Americas retail research. “One finding that might surprise some observers is that e-commerce accounts for a smaller percentage of apparel sales — 9.5% — than many may assume, given recent store-closure announcements and current rhetoric in the market.”
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