Retail

Gadgets light up Xiaomi’s future

20 March 2019

The Chinese giant defied a global phone slump with a 53 pct jump in 2018 sales to $26 bln, even after a sluggish fourth quarter. Bets on cheap-and-cheerful markets are paying off, as is a shift to pricier devices. Despite boss Lei Jun's internet ambitions, hardware still matters.

Sainsbury’s antitrust riposte barks up wrong tree

19 March 2019

The supermarket chain promised to deliver 1 bln pounds of price cuts to ease fears about a tie-up with Asda. That might help its image with customers, but probably not change the regulator’s mind. Arguing that the grocery market is rapidly changing would be a smarter move.

Pinduoduo offers New York a Shanghai bargain

14 March 2019

The $29 bln shopping app is giving investors a taste of Chinese tech: promise, growth and volatility. Shares fell over 17 pct after it spent far more than expected in 2018 to lure and retain customers. Still, the experience of rivals like Alibaba suggests better times ahead.

Hype trumps reality in Ambani’s shopping empire

12 March 2019

Reliance Retail is India’s top brick-and-mortar vendor, a fast-growing conglomerate within the tycoon’s $118 bln energy-to-mobile giant. Now it is emerging as the top threat to Amazon and Walmart’s local ambitions. Its numbers, though, are a mixed bag.

U.S. No. 2 grocer caught in Walmart-Amazon squeeze

7 March 2019

A 70 pct profit drop in the fourth quarter and a weak outlook wiped more than 10 pct off Kroger’s value. The company is trying to keep pace with the biggest players’ store revamps, e-commerce and delivery. But with additional pressure from discounters, it’s a race against time.

The Gap stitches together an M&A opportunity

28 February 2019

The $10 bln clothier is spinning out faster-growing Old Navy from its other brands, saying they serve different customers. It’s not like the struggling retail sector needs another listed company. But it might not have one for long, if the more successful arm can attract a buyer.

JD’s winding road to profit keeps getting longer

28 February 2019

The Chinese e-commerce group’s sales rose by more than a fifth to top $20 bln in the fourth quarter. But heavy investment in new bets means JD is barely breaking even. Financial discipline would help, but may not be enough to counter cooling demand and competition from Alibaba.

Zalando copies Amazon recipe for success

28 February 2019

The online fashion retailer wants to focus more on being a shop window for others rather than buying and posting out stock itself. Shifting inventory and delivery costs to retailers mimics the strategy followed by Jeff Bezos’ behemoth and will boost operating margins.

Beiersdorf splashes skin cream on fundamental sore

27 February 2019

The Nivea maker forecast slower growth and pledged to invest in its brands. It’s a late remedy to the threats facing consumer groups: greater competition from niche brands and disruptive internet sales. The German group needs more radical treatment to keep its premium rating.

Ocado will do better than M&S out of a tie-up

26 February 2019

The online specialist may sell a 50 pct stake in its retail division to Marks and Spencer for up to 900 mln pounds. That can fund investment in its fast-growing tech unit. The buyer will pay a hefty price for a delivery service that might struggle to hang onto current customers.

African retailers get sobering reality check

26 February 2019

Shoprite, the continent’s biggest supermarket chain, suffered its first half-year earnings drop in a decade. The big hit was from inflation and devaluation in frontier markets like Angola. Chasing Africa’s billion-plus consumers is one thing; doing so profitably is another.

Nintendo plays winning Japanese buyback game

26 February 2019

The Super Mario maker is repurchasing $300 mln of stock and cancelling hoarded shares as owners like Bank of Kyoto adapt to new cross-holding rules. Buybacks can be a poor use of cash, but with Japan Inc holding $4 trln in reserve Nintendo is joining a worthwhile movement.

Dairy Crest takeover is far from a Brexit bargain

22 February 2019

Saputo is paying $1.3 bln for the maker of Cathedral City cheddar barely a month before Britain leaves the EU. Minimal cost savings and a healthy premium mean the Canadian buyer probably won’t earn its cost of capital by 2022. And that assumes the UK avoids an economic meltdown.

Homeplus shopping pain will resist Korean IPO cure

22 February 2019

Asian buyout firm MBK will list some of the hypermarket buildings it bought from Tesco. This $1.5 bln REIT should fly in yield-hungry Seoul. Yet the split could make it harder to sell the rest. Separating property and operating units was a boom-era trick that ended badly.

Scale is no easy remedy for CVS price pressures

20 February 2019

The pharmacy firm slashed its profit forecast due to a squeeze on reimbursements and slower drug-price growth, wiping $7 bln off its market value. Buying Aetna was supposed to help it cut costs and improve patient outcomes, but that’s harder than banking on healthcare inflation.

Walmart is smallest loser in UK supermarket salvo

20 February 2019

British regulators released a damning view on the 7.3 bln pound tie-up of Sainsbury’s and Asda, owned by the U.S. group. The pair need a plan to fend off German discounters. But the verdict limits M&A options. Asda’s global clout helps. Sainsbury’s looks set for further decline.

Walmart proves big is relatively beautiful

19 February 2019

The $290 bln company’s quarterly sales defied the overall slump that hit U.S. retailers in December. Earnings beat expectations too. Walmart’s growing online revenue and cheap grocery business should help it capitalize on weaker retailers’ misfortune in a softer economy.

Danone’s self-help plan B gets more important

19 February 2019

The French dairy giant is inching towards its 2020 revenue growth target. But operating margins lag peers’ and it trades at a tangible discount. To face down future activism, CEO Emmanuel Faber should be compiling a list of further cuts or deals to buy faster-growing brands.

Amazon, NYC shoot selves and each other in foot

14 February 2019

Jeff Bezos’s company is ditching its Big Apple HQ plan after local opposition to the $3 bln in incentives it would receive. It makes Amazon look short-term greedy and uninterested in community concerns. Punchy politicians, meanwhile, have cost the city jobs and tax revenue.

Levi’s IPO fails the Marie Kondo test

14 February 2019

The denim maker plans to list its shares after decades in private hands. But the super-voting stock and staggered board that entrench the family owners detract from its strong growth. To quote the Japanese wardrobe-sifting guru: Does it spark joy? As it stands, the answer is no.