Consumer Products and Services

Ontario gives succor to Hudson’s Bay activist

18 June 2019

The Canadian province’s pension plan has ended a deal to sell shares to the retailer’s chairman at the same price he is now bidding for the whole company. That suggests common ground with investor Jonathan Litt, who says the buyers can pay more than the $1.3 bln offered so far.

Sweden provides a cautionary digital tale for HSBC

18 June 2019

Hong Kong’s new online banking licences open the UK-based titan to new challenges in a market that accounts for 30% of pre-tax profit. Scandinavian giants such as Swedbank quickly fell prey to startups. And HSBC will be up against the likes of tech-savvy Alibaba and Tencent.

Ride-hailing misses the U.S. IPO bus

17 June 2019

Lyft and Uber are rare laggards among 2019 debutants. Plant-based burger maker Beyond Meat is the top performer, but others involve video chats, online retailing, cybersecurity, and plain old blue jeans. Investors see a bright future – except perhaps in the overhyped gig economy.

Chanel’s bling valuation will keep suitors at bay

17 June 2019

The privately held label made 2 bln euros of net profit in 2018. Valued like rival Hermes, it’s worth 90 bln euros. Chanel may be in flux after Karl Lagerfeld’s death, but its bulk would make suitors think twice even if its controlling investor wanted to sell.

Sotheby’s bid a bad case of Pinault envy for Drahi

17 June 2019

Cable tycoon Patrick Drahi is buying the auction house for $3.7 bln at a 60% premium. Even with cost cuts, the financial prospects are humdrum. As with fellow French billionaire François-Henri Pinault’s purchase of Christie’s, the returns look more reputational than financial.

Toyota uses financial heft to hedge green bets

17 June 2019

The $176 bln behemoth is spreading clean energy investments across pure electric cars and hybrids as well as hydrogen, partnering with rivals like Subaru to reduce costs. The company’s sheer scale makes the strategy feasible, but Nissan’s more conventional solution is a threat.

Review: Why an AI apocalypse could happen

14 June 2019

Elon Musk and Stephen Hawking have warned that superintelligent machines could destroy humanity. In "The AI Does Not Hate You", journalist Tom Chivers offers a terrifying primer on why they should be taken seriously. Governments and companies, though, still need convincing.

Walmart e-commerce flies on, using Jet.com’s parts

13 June 2019

The $311 bln retailer is folding much of the upstart it bought in 2016 into its own business. While Jet.com never took off at scale, it helped revitalize the U.S. behemoth’s online sales. Focusing on its core brand underlines Walmart’s key advantage over Amazon: physical stores.

Nelson Peltz snaps up $16 bln Brexit fixer-upper

13 June 2019

The activist investor has taken a 6% stake in London-listed construction group Ferguson. Selling the UK unit, which has been hit by dismal growth since the country voted to leave the EU, would boost profitability. Relisting in New York could help close a valuation gap with peers.

Trump gives China’s homegrown tech goal a boost

13 June 2019

Beijing’s move to grant 5G telecom licences early is a show of trade war bravura, given the foreign inputs required. Much of its industrial policy, though, has been about encouraging long-term self-sufficiency. Washington’s assault on equipment-maker Huawei now leaves no choice.

Reckitt’s new face has a lot to prove

12 June 2019

The maker of Nurofen and Durex has chosen PepsiCo executive Laxman Narasimhan to be Rakesh Kapoor’s successor as boss of the 45 billion pound group. An outsider may bring fresh remedies. But the first-time CEO will have his work cut out to fix the problems facing his new employer.

Apollo’s eye for composition finds value in photos

11 June 2019

The private equity firm is paying $2.7 bln for Shutterfly despite growing competition and fickle consumer taste. Demand for the firm’s photo-based albums and gifts is stronger than its tanking share price suggests. Teaming up with rival Snapfish can put extra gloss on the deal.

Jeff Bezos adds fasting to meal-delivery menu

11 June 2019

He’s closing Amazon Restaurants after it failed to get much business. That leaves the likes of Grubhub, Uber and DoorDash trying to dominate a capital-hungry market with ever decreasing margins. Leaving them at the table looks like the smart move.

Unilever ethical boast carries M&A prod

11 June 2019

The $178 bln consumer goods giant says brands with an environmental or social purpose are driving 75% of its growth. It adds a little weight to the idea that consumers reward virtue. For CEO Alan Jope, the lesson is that many of Unilever’s products are sluggish, and need pruning.

Hudson’s Bay needs more from WeWork-backed bid

10 June 2019

The executive chair and other shareholders want to take the Canadian owner of Saks Fifth Avenue private for C$1.74 bln. While that’s a 48% premium, it’s also an opportunistic lunge with C$1.5 bln of cash coming in. Retail is suffering, but the company’s property has real value.

The Exchange: Dick’s sticks to its guns

10 June 2019

Dick’s Sporting Goods lost sales, customers and suppliers when it banned assault-style weapons from its stores last year. Over a year later, boss Ed Stack tells Breakingviews what he learned from taking a stand on gun violence, and addresses his newer challenge of China tariffs.

Elliott tries to rip up the retail history books

7 June 2019

The investment firm could make a handsome return buying U.S. bookseller Barnes & Noble for about $500 mln and copying the formula that revived its UK chain Waterstones. The challenge is that Barnes & Noble is far bigger, while retail has a habit of getting lost in translation.

Skincare M&A craze enjoys anti-aging protection

7 June 2019

Charmed by niche brands’ fast growth and disruptive power, consumer groups like Unilever are paying up to snatch the next hot cream. Gleaning the true benefits of such splurges is hard. But a growing taste for toxic-free serums and a greying client base will offer rich fillers.

IPO gives pet store chain’s creditors sloppy kiss

3 June 2019

Chewy is seeking to go public at a $7.2 bln valuation, more than double what private-equity owned PetSmart paid for the online business in 2017. That deal ended up making the overleveraged PetSmart’s lenders howl. The listing price, if it sticks, should help them settle down.

Beijing’s threats may soon come in bigger packages

3 June 2019

Officials are drafting a blacklist for badly behaved foreign companies. It is the latest warning signal, as China tries to respond to U.S. blows without escalating an increasingly bitter trade dispute. But that’s getting harder, and a new FedEx probe raises the stakes.