Good morning.

In today’s edition, we have news about Starbucks finding a new home in Nashville as the coffee giant moves to strengthen its North American supply chain.

Speaking of home, the war in Iran has left fast-fashion exports stuck in their home countries, with shipments from South Asia piling up as Middle East airspace closures ground cargo flights.

Let’s get into today’s edition — happy reading!

Target has unveiled a $6 billion turnaround plan aimed at restoring growth after several quarters of weak sales and declining store traffic.

“Not an Everything Store”: CEO Michael Fiddelke said the strategy focuses on strengthening Target’s identity as a trend-forward retailer rather than competing directly with scale-driven rivals like Walmart and Amazon.

Brand Refresh: Target will also refresh several private-label brands, including relaunching the Threshold home brand and expanding its Cloud Island baby line. New in-store concepts are also coming, including Baby Boutique sections in about 200 stores and Beauty Studio shops in roughly 600 locations later this year.

More Stores: Alongside the merchandising overhaul, Target plans to open more than 30 new stores and remodel around 130 locations in 2026, part of a broader $5 billion capital investment program.

The move comes after Target reported another soft quarter, with revenue slipping 1.5% to $30.92 billion and store and online traffic falling for four consecutive quarters.

U.S. retail sales declined 0.2% in January to $733.5 billion, according to the U.S. Commerce Department, signaling a softer start to the year for consumer spending. The drop followed flat sales in December, though the decline was smaller than economists’ expectations of a 0.4% fall.

Much of the weakness came from the auto sector, where motor-vehicle and parts dealer sales fell 0.9%, pulling down the overall figure. Excluding autos and gas stations, retail sales rose 0.3%, suggesting underlying consumer demand remains relatively steady.

Some categories continued to show strength. General merchandise store sales rose 0.4%, while online and nonstore retail sales jumped 1.9%, highlighting continued momentum in e-commerce even as broader spending growth slows.

Costco Wholesale said it would lower prices for customers if it receives refunds tied to tariffs struck down by the U.S. Supreme Court. The retailer was among more than 1,000 companies that challenged tariffs imposed under the International Emergency Economic Powers Act.

CEO Ron Vachris said the company would pass any recovered tariff payments back to shoppers to improve value, noting that Costco had already reduced prices on some items, such as textiles, bedding, and cookware, after tariff reductions on imports from countries including China.

The comments came as Costco reported strong holiday-quarter results. Comparable sales excluding fuel rose 6.7%, beating analyst expectations of 5.9%, while net income climbed nearly 14% to $2.04 billion, reflecting steady demand as shoppers continue to gravitate toward value retailers amid persistent cost pressures.

OpenAI has abandoned plans to let users complete purchases directly in ChatGPT, opting instead to redirect shoppers to third-party apps and retailer websites, according to reports.

The company had introduced Instant Checkout in 2025, partnering with platforms like Shopify and Etsy to bring product listings from millions of merchants into ChatGPT. But scaling the system proved difficult due to real-time inventory syncing, payment infrastructure, tax compliance, and fraud-prevention requirements across millions of retailers.

Instead of becoming a full checkout platform, ChatGPT will now act primarily as a product discovery and recommendation interface, directing users to merchant apps or websites to finalize purchases.

American Eagle Outfitters reported fourth-quarter revenue of $1.76 billion, up 10% year over year, driven largely by strong growth at its intimates and activewear brand Aerie. The brand posted a 23% surge in same-store sales, fueled by rising demand for loungewear, sports bras, and activewear under its Offline line.

The company’s core American Eagle brand also posted modest growth, with same-store sales rising 2%, supported by marketing campaigns and celebrity partnerships. Overall, comparable sales increased 8%, helping deliver one of the retailer’s strongest holiday quarters on record.

Despite the strong sales performance, profitability declined. Net profit fell to $87.9 million from $104.3 million a year earlier, partly due to about $50 million in tariff-related costs, highlighting continued pressure on apparel retailers from import duties.

Garment shipments destined for global retailers including Inditex, H&M, and Primark are piling up at airports in Bangladesh and India as the Middle East conflict disrupts key cargo routes, according to a Reuters report.

The closure of regional airspace has forced major Gulf carriers such as Emirates and Qatar Airways to cancel flights, leaving apparel consignments stranded in manufacturing hubs.

The disruption is also sharply raising logistics costs. Freight rates for some shipments have doubled as air-cargo capacity shrinks, raising concerns across the apparel supply chain. Industry groups warn that if disruptions extend to maritime routes such as the Strait of Hormuz, shipping costs could surge further, creating another major supply chain shock for global fashion retailers.

Major retailers, including Amazon, Walmart, and Kroger, frequently use dynamic pricing to adjust product prices in real time, according to new data from analytics firm Decodo. The study analyzed more than 1 million price data points across 120 e-commerce retailers and found that roughly half of all price adjustments result in lower prices rather than increases.

Amazon led the list with 116,509 price changes, with an average 35.3% price drop, followed by Walmart with 68,926 adjustments and an average 10.6% decline, and Kroger with 55,601 price changes and a 9.1% average drop. Other retailers using dynamic pricing include Target, Publix, and Wegmans.

The practice of dynamic pricing is drawing increasing scrutiny from policymakers, with lawmakers in Maryland recently proposing legislation to ban it for grocery items.

Starbucks plans to open a new corporate office in Nashville, Tennessee, to strengthen its North American supply chain as the coffee giant ramps up expansion across the U.S. The office will house sourcing and supply-chain teams and is expected to open later this year, while Seattle remains the company’s global headquarters

The move is tied to CEO Brian Niccol’s turnaround strategy to improve operational efficiency and support a broader menu rollout with more frequent deliveries to stores. Starbucks has identified central, southern, and northeastern U.S. markets as major growth regions where stronger logistics coordination will be needed.

The investment also supports Starbucks’ ambitious store expansion plans. The company sees potential to add up to 5,000 new U.S. locations over time and expects to increase the pace of openings to around 400 cafés per year by 2028, making supply-chain capacity a key pillar of its growth strategy.

Asics is expanding its global strategy by acquiring marathon registration platforms and building a runner-focused ecosystem to boost engagement and footwear sales. The Japanese sportswear maker is linking race registration, training apps, and its membership program to reach runners months before major events.

The strategy allows Asics to control more of the marathon infrastructure, giving it early access to runners through training plans, race registrations, and personalized shoe recommendations. The approach differs from rivals like Nike and Adidas, which rely heavily on athlete endorsements.

The turnaround under CEO Yasuhito Hirota has been significant: operating profit has surged sixfold since 2021 to ¥142 billion, while the company now expects revenue to reach ¥950 billion and operating profit to rise 20% this year. Asics is also targeting India and Southeast Asia as key growth markets