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Fashion Nova Sparks Outrage After Encouraging People to Spend Stimulus Checks on Its Site

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  • Fashion Nova sparked outrage after it sent customers an alert encouraging them to spend their stimulus checks on its site.
  • The move came a day before new data showed that an unprecedented 22 million people filed for unemployment benefits in the last month. 
  • However, the attempt to bring in sales might not be surprising considering the fact that retail sales in the U.S. dropped by 8.7% in March, with clothing stores specifically seeing a 50.5% drop. 
  • While Americans can choose to spend their stimulus checks however they please, early data shows that most are using it on basics like food and gas. 

Sale Alerts 

Fast-fashion retailer Fashion Nova was slammed by Twitter users Wednesday after sending email and text alerts that encouraged people to spend their government-issued stimulus checks on its latest sale. 

Many of the company’s loyal customers who have signed up for notifications received an alert that reads: “When That Stimulus Deposit Hits…Save Up To 80% OFF SITEWIDE. Use Code: STAYIN80. Shop ASAP.”

That message left several customers stunned, with many taking to Twitter to remind the brand that they have bills and other more important things to buy amid the coronavirus pandemic. Some also took issue with Fashion Nova using the code ‘stay in,’ saying it felt like the company was mocking a situation in which people have died. 

For many, the alert seemed pretty surprising since Fashion Nova is one of many retailers that has show support to those financially suffering. Earlier this month the brand teamed up with Cardi B to donated $1,000 every hour until May 20, for a total of $1 million. 

At the time, founder and CEO Richard Saghian said in a press release, “We all feel compassion and concern for those affected by the coronavirus.”

“Fashion Nova Cares with Cardi B will provide people with necessary relief to help them get through this crisis. As a community-driven brand, we are inspired by the kindness and generosity of others and we wanted to do our part to help those in need.”

US Retail Sales Drop by Record 8.7% in March

However, Fashion Nova’s new marketing strategy might not actually be too surprising considering the fact that so many retail stores across the country are struggling.

The Commerce Department released new data Wednesday showing that U.S. retail sales have plunged by 8.7% between February and March. That’s the biggest monthly decline since the government started tracking in 1992, according to CNBC.

A more specific breakdown of the data showed that some retail sectors actually saw a surge, such as grocery stores, online retailers like Amazon, pharmacies, and places that sell essential items. 

Meanwhile, clothing and accessory retailers took the hardest hit, dropping in sales by 50.5%. Others that saw major drops include furniture stores, motor vehicle and parts dealers, gas stations, and electronics stores.

22 Million File for Unemployment

Strict stay at home measures across the country have of course played a huge role in the sales decline since so many businesses have been forced to close their doors. But on top of that, consumers have generally pulled back on unnecessary spending during a time of unprecedented layoffs.

The U.S. Department of Labor announced Thursday that 5.2 million people filed for unemployment benefits last week. That means that in just one month, over 22 million workers have filed for unemployment.

As far as weeks go, the new data shows a slight decline compared to the 6.6 million claims filed last week and the 6.9 million filed the week before. Still, even if the peak of layoffs is behind us, the country is still in uncharted waters with these incredibly high numbers. 

Before the coronavirus outbreak, the highest number of new unemployment claims in a week was about 700,000 back in 1982. The largest number of people asking for unemployment benefits over a four-week stretch was 2.7 million that same year. 

And according to The Washington Post, job losses in the past month have erased nearly all of the 22.8 million jobs gained from February 2010 to February 2020 during the rebound from the Great Recession.

Economists have noted that claims are surging, at least in part, because more people like gig economy workers and independent contractors are covered for unemployment benefits under the CARES Act. 

But at the same time, economists say the numbers could be even higher than they look on the surface. That’s because state labor departments have become totally overwhelmed by the volume of claims and some people have reported being unable to get help over the phone or online.

What Are People Spending Stimulus Checks On? 

So given those unemployment figures, it clear why so many people were frustrated by Fashion Nova’s alert during this sensitive time for millions of people.

But at the same time, the strategy might have actually brought the brand in some much-needed business. In fact, some internet users signaled that the deals may have been too good for them to pass up. 

Whatever people choose to spend their stimulus checks on is their choice, but of course because of tough circumstances, many are wisely choosing to use it on essentials. Early evidence indicates that many Americans are using the money to buy the basics, including food and gas.

Netspend, which processed nearly $1 billion in relief payments by Monday, said its customers are using the government money “for groceries, fast food, pharmacies and gas, as well as withdrawing cash from ATMs.” It also said that more than half of the transactions were PIN-based at ATMs or grocery stores, and about a quarter were done online.

Meanwhile, data compiled by the digital banking service Current found that members who received stimulus payments over the past five days spent 16% of the money on food including takeout and delivery. An additional 14% went to money transfers, 10% went toward gas, 9% was spent on groceries.

Of course, these are all early reports, but for those who have managed to get their hands on their stimulus checks, the money has already provided some desperately needed relief. 

See what others are saying: (CNBC) (InStyle) (Business Insider)

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CVS, Walgreens, and Walmart Helped Fuel the Opioid Crisis, Jury Finds

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While all three chains have vowed to appeal, this ruling is a massive win for plaintiffs who argued that opioid manufacturers and retailers violated “public nuisance” laws when contributing to the opioid epidemic.


Jury Sides Against Retailers

A federal jury in Cleveland agreed Tuesday that CVS Health, Walgreens, and Walmart — three of the country’s biggest pharmacy chains — are responsible for contributing to the opioid crisis in two Ohio counties.

This is the first time that the retail arm of the drug industry has been held accountable for opioid overdoses and deaths. It’s also the first time a jury has been used to decide in a major opioid lawsuit.

Previously, only manufacturers such as Purdue Pharma and Johnson & Johnson faced settlements or penalties, though the latter narrowly escaped $465 million in opioid fines in Oklahoma earlier this month after the state’s Supreme Court overturned a lower court ruling. 

Many plaintiffs in thousands of similar lawsuits all across the country are seeing the Ohio jury’s decision as an optimistic sign — especially since most of them are using the same argument. Plaintiffs in Ohio alleged that either opioid manufacturers or retailers violated “public nuisance” laws by ignoring harm caused by opioid abuse that later snowballed into a full-fledged public health crisis. 

Retailers Vow to Appeal

Unsurprisingly, all three chains have promised to appeal Tuesday’s verdict.

There is precedent to think this decision could be overturned. For example, the now-overturned J&J lawsuit first successfully used the public nuisance argument in lower courts, but during an appeal, the Oklahoma Supreme Court thought the plaintiff’s argument was too broad. 

That said, every state has different public nuisance laws, so there may not be a clear-cut answer as to what actually could happen with all these cases. 

Despite a pending appeal, the judge overseeing Tuesday’s Ohio verdict will make a determination on how much these companies must pay after additional hearings in the spring. 

While the retail arm has largely avoided settling up to this point, if this case ultimately does not go their way, it could open the door for future settlements if they decide that route is less costly than going to trial. 

See what others are saying: (The New York Times) (Associated Press) (The Wall Street Journal)

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Biden Authorizes Release of 50 Million Barrels of Oil From U.S. Reserve To Ease Gas Prices

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Experts believe the release will, at best, provide temporary relief to extremely high gas prices but only if other countries tap into a significant amount of oil from their reserves as well. 


Biden Taps Into Oil Reserves

President Joe Biden authorized the release of 50 million barrels of oil from the U.S. Strategic Petroleum Reserve on Tuesday in an attempt to bring down staggeringly high gas prices.

“American consumers are feeling the impact of elevated gas prices at the pump and in their home heating bills, and American businesses are, too, because oil supply has not kept up with demand as the global economy emerges from the pandemic,” a White House announcement reads. “That’s why President Biden is using every tool available to him to work to lower prices and address the lack of supply.”

As of Tuesday morning, the national average of gas sat at $3.40, according to the American Automobile Association (AAA). While down slightly over the last few days, the national average for November remains the highest it’s been since 2013. 

Despite the announcement, Americans shouldn’t expect to see an immediate drop in gas costs. In fact, gas prices are unlikely to be impacted much in the coming weeks since the government’s reserve only stores crude oil, which will need time to be refined into gasoline. 

Many analysts expect gas from the reserves to start reaching consumers’ pumps around mid-December, but even then, it will likely be used up in around a week. Last year, the U.S. used about 8 million barrels of gas from the reserve a day.

Those two factors are likely major contributors to why this news didn’t do much to calm the oil market. Following the announcement Tuesday, the benchmark oil price in the U.S. — measured by West Texas Intermediate crude futures — actually rose. 

Last week, Biden asked the Federal Trade Commission to look into “mounting evidence of anti-consumer behavior by oil and gas companies” amid rising gas prices. 

Price Concerns Persist

In its announcement, the White House said the U.S. release is being taken “in parallel with other major energy consuming nations, including China, India, Japan, Republic of Korea, and the United Kingdom.” 

A number of analysts cited by various news publications have predicted that this kind of multi-country release is the only chance the U.S. actually has of meaningfully impacting gas prices.

“The bottom line for motorists is this moves the needle — but barely, and maybe not for a very long period of time,” Patrick De Haan, an industry expert at Gas Buddy, explained to The Washington Post. “It’s certainly something, but how much that something is will be contingent on how much the other countries put in.”

It is currently unclear how much oil the other countries plan to release, though Indian officials have said the country will release 5 million barrels from its reserve. 

Efforts could also go south in the long-term if the Organization of the Petroleum Exporting Countries (OPEC) pushes back. It previously warned of a possible response if Biden decided to make this type of release, with the organization arguing that the U.S. has no real justification for needing to tap into its reserve. 

“There’s a threat this could lead to a risk of prices being elevated for longer if OPEC holds back meaningful production increases as a result,” De Haan told The Post. 

Overall, the release of oil is a tricky situation for Biden. He was already facing stacking criticism from Republicans for recent inflation and supply chain bottlenecks. Even now, many have said the release of 50 million barrels isn’t good enough on its own.

On the other side, Democrats like Senate Majority Leader Chuck Schumer (N.Y.) have argued that tapping into the reserve could provide temporary relief.

See what others are saying: (The Washington Post) (Business Insider) (Fox Business)

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Looters Launch Coordinated Attacks on High-End Stores Like Louis Vuitton in Chicago and San Francisco

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It’s unclear if the multiple attacks in each city are connected, but police have described the events as coordinated and planned. 


Raid on San Francisco’s Union Square

Dozens of individuals looted at least 10 stores in San Francisco’s Union Square on Friday, though that’s far from the only seemingly organized raid that occurred over the weekend.

Cell phone video from the incident shows multiple people running into a Louis Vuitton store and emerging with armfuls of merchandise. KGO-TV reporter Dion Lim shared images of the store picked clean in the aftermath, with its windows shattered. Burberry, Fendi, and YSL were among the other businesses she said looters targeted.

Video shared by Twitter user @CARLITOSGUEY shows San Francisco police officers swarming a Mustang outside of the Louis Vuitton store and beating its windows with their batons. They then pull someone from the passenger’s seat and pin that person to the ground.

At a news conference on Saturday, police told reporters they “were confronting an armed individual” in the Mustang. That vehicle, along with another, has now been seized by the department. Police also said they have so far made eight arrests connected to the incident. 

Police Chief Bill Scott has called the attack “concerted,” saying, “There’s no doubt in my mind that this was not unplanned.”

In total, over $1 million in merchandise was stolen. 

Other San Francisco Raids

Friday’s raid was quickly followed up the next night when around 80 looters ransacked a Nordstrom near San Francisco. All but three thieves managed to evade authorities.

At least two store employees were assaulted during the attack, including one worker who was pepper-sprayed by looters, according to a press release published Sunday by the Walnut Creek Police Department. 

Like the previous raid in Union Square, police described this attack as “clearly a planned event.” 

On Sunday night, yet another raid occurred at a jewelry store in Hayward, which is about 30 miles outside of San Francisco.

As of Monday afternoon, investigators have not been able to confirm whether these attacks are connected, though in recent years — and especially in recent months — they have become increasingly common.

For example, in May, Walgreens said it closed 17 Bay Area stores because of rampant shoplifting. 

“We are exploring every single possible criminal charge related to the conduct,” San Francisco District Attorney Chesa Boudin said Saturday. “We will use every tool in our tool belt.”

Chicago Louis Vuittons Raided 

The attacks in San Francisco follow a similar event that happened in a Louis Vuitton store in the suburbs of Chicago this past Wednesday.

During that heist, a group of 14 seemingly unarmed individuals ran into the store in broad daylight and began stockpiling merchandise sitting on shelves. 

So far, police have not made any arrests; however, they said they have retrieved one of the three vehicles the looters used as getaway cars. 

They also confirmed that no one was injured during the attack but that $120,000 in merchandise was stolen.

See what others are saying: (KGO-TV) (The Washington Post) (NBC News)

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