5 Reasons We Are Optimistic for 2023

Despite current market uncertainty, high interest rates and inflation presenting unique challenges for brand founders, there are positive signs that the worst is over. Here's why:

1. Inflation is cooling — expected to decrease from 8% this year to 3% by EOY 2023. We view today’s retail sales report as positive news that inflation is finally being tamed. - WSJ, Knoema

2. Consumer sentiment remains robust — consumer spending to be driven by underlying fundamentals as inflation wanes and the overall job market remains resilient - WSJ, NRF 

3. Supply chain costs have come down — an important industry bellwether, East Asia to West Coast freight costs, has dipped below 2019 levels, reducing COGS and price inflationary pressures for companies across the economy - Freightos

4. Shopify reported its largest BFCM ever — the eCommerce platform grew overall GMV by +19% YoY to reach, while the average store was up 10% - Shopify

5. Despite headwinds, CEO guidance among major retailers and brands is optimistic — Amazon and Walmart continue to forecast revenue increases in 2023 and plan to invest in growth. Lululemon continues executing its plan to 2x revenue between 2021 and 2026 - Amazon, Walmart, Lululemon

That said, there remains a lot to work through next year:

1. Downside pressure for high-ticket discretionary purchases — across furniture, home renovations, cars, and electronics, expect consumers to cut back and prioritize durable goods and leisure activities (as noted in today’s retail sales report) - WSJ

2. Increased cost of capital — borrowing costs will be at 10-year highs next year, while ecommerce venture funding is expected to drop 40-50% - WSJ, Crunchbase

3. Excess inventory weighing on profits  — a post-Covid issue for small and large brands; Walmart, Target, and Amazon remain significantly above pre-pandemic levels which they expect to hurt short-term profitability - NBCNews

For brand founders looking to stay afloat in challenging times, securing access to capital and a dependable balance sheet is key. This can help you pay down debt, increase your cash reserves, or even manage inventory.

At Pattern Brands, we understand the difficulty of managing these issues first-hand as brand founders ourselves; that's why we built our platform to prioritize profitability and sustainable growth for weathering different retail cycles - it really pays off when turbulence hits. 

With us, your brand not only joins an experienced team but benefits from the resources of being part of a larger operating platform that scales multi-channel across Shopify, Wholesale (Nordstrom, Huckberry, Anthropologie, etc), and Amazon.

We are acquiring, and growing, leading Shopify home goods brands on one platform; Pattern Brands, and would love to talk with you. Here's how:

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