Retail

Amazon’s $10 bln subsidy is Prime for growth

19 April 2018

Boss Jeff Bezos says the free-shipping club has 100 mln subscribers. The annual fee would have to double for Amazon to break even on deliveries, Breakingviews calculates. But at under 6 pct of sales, the shortfall is a cheap way to retain customers and avoid price wars.

Hammerson’s M&A fumble leaves defences down

18 April 2018

The shopping centre operator ditched a 3.4 bln pound plan to buy rival Intu after shareholder pressure. The group will now sell assets and focus on posh malls, but the U-turn makes it vulnerable. The UK’s strict takeover rules give rejected suitor Klepierre a narrow way back.

Starbucks’ anti-racism coffee break sets example

17 April 2018

After the arrest of two black men at a Philadelphia shop the $84 bln chain will shut some 8,000 U.S. outlets for an afternoon of racial-bias education. The swift response, perhaps costing $20 mln in lost latte sales, backs up Starbucks’ social goals and offers a lesson to others.

Hammerson has walked away from wrong deal

13 April 2018

The mall operator’s aversion to Klepierre’s 5 billion pound offer has driven away the suitor. The UK company is now free to pursue the takeover of a smaller rival in its home market. But the drawbacks of the plan and its clumsy defence risk irking investors.

Toys R Us Asia deal will be far from child’s play

12 April 2018

The bankrupt retailer has drawn bids of over $1 bln for its Asian operations. The unit is growing in China and Southeast Asia but its biggest market is Japan, where the number of kids is shrinking. Any buyer will also need a clear idea of how to handle the threat from e-commerce.

Tesco’s turnaround may bring forward regime change

11 April 2018

Three years after an accounting scandal and price war, the grocer is improving margins and cutting debt. It’s the least shorted of all British supermarket stocks. Boss Dave Lewis’ revamp looks within reach. The question for investors is whether he’ll stick around to finish it.

Solid takeover hurdle trips up Foxconn of sneakers

11 April 2018

Taiwanese contract footwear maker Pou Chen wanted full control of its Hong Kong affiliate Pou Sheng. The $1.4 bln deal was nixed, however, by just 4 pct of investors. There's a risk that the rigorous system can be gamed, but it commendably tilts in favour of outside shareholders.

Dutch lawmakers give Ahold backup in activist spat

10 April 2018

Activist CIAM wants the supermarket to scrap its foundation that can be used to block takeovers. But with the Netherlands eyeing new laws to stymie hostile bidders, companies may not need these arcane tools much longer. Shareholders will suffer either way.

South Korean broker redefines fat-fingered trading

10 April 2018

Samsung Securities is reeling after clumsily issuing 2.8 bln shares to staff instead of 2.8 bln won in dividends. Worse, some employees swiftly offloaded the stock. Big clients are fleeing and regulators arriving. It's about as painful a way there is to erode trust in finance.

Carlyle uncorks a fine Australian wine deal

6 April 2018

The private equity firm is acquiring Accolade, maker of Hardys and other brands, for A$1 bln. Asian demand should leave ample room for growth. Higher Chinese tariffs on U.S. wine also could help. And a cheap valuation compared to rival Treasury makes it a buyout worth toasting.

Samsung is poster child for the “Korea discount”

6 April 2018

First-quarter operating profit is likely to rise a blistering 58 pct to $15 bln. Yet Samsung’s shares look cheap, even allowing for challenges ahead in semiconductors. The best fix would be to build on the baby steps it has already taken to improve corporate governance.

Leaving Intu at till is first step for Hammerson

5 April 2018

The UK shopping centre owner is waiting to see whether rival Klépierre makes a formal bid before it commits to buying smaller Intu Properties. Shareholders have already turned down their thumbs at the Intu deal. A sweeter offer from the French group would be a better outcome.

Private equity’s retail fix risks landlord revolt

5 April 2018

Ailing UK food and fashion chains like private equity-owned New Look or Prezzo increasingly use fast-track insolvency tools to scotch costly leases. The fad gives companies a shot at recovery, while avoiding a risky administration. But property groups may tire of taking the pain.

Walmart may have hit on healthy kind of disruption

30 March 2018

Merging with insurer Humana could put clinics in the U.S. retailer’s stores, keeping patients out of hospitals and insurance costs down. Walmart isn’t given to big acquisitions and $37 bln Humana wouldn’t come cheap. But a broader partnership could bring many of the benefits.

China’s business culture sabotages its art culture

29 March 2018

Art Basel’s Hong Kong fair kicked off on Thursday. Mainland sales rose 14 pct to $13.2 bln in 2017; exhibitors hope enthusiasm will prove contagious. But Chinese art prices and volumes are unreliable. An excess of auction houses draws speculators and deters real collectors.

Cox: A beneficent billionaire should buy Remington

27 March 2018

The AR-15 maker filed bankruptcy papers a day after millions of Americans marched in favor of banning its products. Owners and creditors just want out in a hurry. But Bloomberg, Gates or Bezos could turn Remington into a force for sensible gun policies with mere pocket change.

Brookfield’s GGP offer shows writing on the mall

27 March 2018

The real-estate owner raised the headline value of its offer for the U.S. shopping-center operator to $15.3 bln. Yet the fall in Brookfield’s shares since it first made a bid makes the new offer look worse. Split the difference, and Brookfield is probably being rational.

Market jitters accentuate M&A regulatory risk

26 March 2018

Dealmaking sprees are prone to extinction events. Market panics erode the value of buyers’ stock, make bankers reluctant to lend, and change the outlook violently. Recent tumult doesn’t yet qualify, but it makes it harder to overlook deals that push the regulatory limits.

Failed MBO leaves Nordstrom in a jumble

21 March 2018

The board's rejection of the founding family's $8 bln offer for the retailer makes both sides look too stubborn. Nordstrom is a middling performer in a struggling industry. Compromise would have suited shareholders well. Instead, they face an ill-fitting future.

Kingfisher’s refurbishment has a sloppy finish

21 March 2018

The DIY merchant’s good 2017 results fail to cover up other problems. Softening demand in Britain chimes with other UK retailers’ experience. But there’s less excuse for poor stock management and underperformance in France. The company’s turnaround plans may be prone to cracks.