Retail

Viewsroom: German election all about runners-up

21 September 2017

Chancellor Angela Merkel and her Christian Democrats should win more votes than rivals. But they’ll need coalition partners to form a government. Choosing among them promises to be a nail-biter. Also: the Toys R Us bankruptcy won’t be a total loss for its private-equity owners.

Kingfisher’s DIY skills show room for improvement

20 September 2017

The power drill-to-paint retailer’s first-half pre-tax profit beat expectations – welcome for a company that has lost a fifth of its value since May due to a messy business transformation. In a supposedly recession-proof sector, Kingfisher’s woes are largely self-inflicted.

Toys R Us equity owners aren’t exactly wiped out

19 September 2017

KKR, Bain and Vornado privatized the retailer for $6.6 bln more than 12 years ago. Now their stock is worthless. Even without dividends, though, they’ve collected some $600 mln in fees, interest and other payments. It shows how buyout firms play the game in multiple ways.

Heineken tries its hand at conscious uncoupling

19 September 2017

The brewer’s second-largest investor, Femsa, has sold a stake worth 2.5 billion euros. A spat over Brazilian distribution was a hiccup in an otherwise successful relationship. Co-dependence in the lucrative Mexican market is a good reason for both sides to keep things friendly.

Paris fashion IPO will struggle for luxe valuation

18 September 2017

SMCP, the French owner of the Sandro and Maje labels, is planning a listing. Pitched between luxury and the high street, the Chinese-owned group has sales growth and an efficient supply chain to rival retail leader Zara. But its smaller size and high debt will weigh on its worth.

Retailer Next confronts last corporate taboo

14 September 2017

The UK clothes chain has sketched out a scenario where high-street store sales keep shrinking until they can’t cover their cash costs. Even in that dismal situation, Next would be worth only a third less than now. Few companies consider their own demise in this way; more should.

Apple distance from startup tree ensures X success

11 September 2017

The $835 bln giant is set to unveil its 10th anniversary iPhone from its new $5 bln circular campus. The device may boast more speed, face recognition, and a better screen. Apple’s massive scale makes Silicon Valley-style nimbleness impossible - but global bestsellers possible.

Amazon’s second HQ could be its easiest sale yet

7 September 2017

The e-commerce giant wants another headquarters besides Seattle, and it’s asking cities to bid for the privilege. With a lure of 50,000 jobs and $5 bln of construction spending, it’s sure to get juicy offers. But as Wisconsin found with Foxconn, victory may come at a steep price.

RH remodel adds shine but may not sway skeptics

7 September 2017

An earnings beat driven by a new membership program sent the furniture shop's shares up 41 pct, squeezing short sellers. A full restoration remains some ways off, though. After inflating debt to finance buybacks, the retailer needs to show more than a one-time boost to cash flow.

Retailers’ credit-card life vest is over-inflated

6 September 2017

Macy's-branded plastic contributed nearly 40 pct of EBIT last year. At Kohl's and J.C. Penney, too, finance propped up profit. It's a quick fix at best for struggling U.S. mall tenants. They may find their credit-card partners pulling back as stores close and charge-offs rise.

Carrefour’s ills demand Tesco-like revamp and more

31 August 2017

The French supermarket said full-year operating profit could fall 12 percent, partly due to stiff competition at home. The grocer’s new CEO faces even more challenges than Tesco’s Dave Lewis did three years ago. Domestic market share is shrinking and its online offering is weak.

These retail chains can resist the Amazon vortex

28 August 2017

If investor judgment is any guide, Ross Stores, Home Depot and AutoZone may have the wherewithal to withstand the apocalypse wrought by the e-commerce titan, which just swallowed Whole Foods. All of them either match or beat Amazon’s multiple of enterprise value to future sales.

Consumer giants’ disclosure is near sell-by date

25 August 2017

Firms that make food and personal-care products are pouring money into startups and young brands. Unilever, the most acquisitive, has made 15 such deals since 2014. Yet they don’t give investors enough information to judge their dealmaking nous. It could be their loss.

Lowe’s No. 1 target is Home Depot, not Jeff Bezos

23 August 2017

The $60 bln DIY retailer clipped its operating margin growth for 2017 to ramp up marketing. That sliced $4 bln from its market cap. Attracting more shoppers to visit outlets in search of home-improvement stuff underscores an increasingly bitter rivalry with its $180 bln peer.

McDonald’s ain’t loving the local Indian recipe

22 August 2017

The U.S. burger chain is taking the nuclear option, shutting 169 stores as a spat with a partner boils over. It's one reason McDonald's has fallen behind rivals in a huge potential market. Partnerships are always vulnerable but India's byzantine legal system raises the stakes.

Unilever can butter up price for margarine unit

18 August 2017

Private equity consortiums are reported to be circling the Anglo-Dutch giant’s spreads business. A bidding war and the rich price paid for Reckitt’s food brands may help Unilever pocket more money. But unappetising returns await any buyer who pays more than 7 billion pounds.

India’s e-tailers burn bright in festival season

18 August 2017

Amazon India and SoftBank-backed Flipkart are going head-to-head for the first time in India’s months-long shopping season. Both will offer massive discounts despite New Delhi's dislike of the practice. The challenge will be growing the customer base enough to justify the losses.

Wal-Mart beats Amazon at its own game

17 August 2017

The $244 bln retailer cranked out its 12th quarter of growing sales in a row as smaller rivals suffered. E-commerce soared 60 pct, in part sparked by food shoppers. That gives CEO Doug McMillon a leg up as the industry waits for Amazon to digest its $13.7 bln Whole Foods meal.

Advertisers rise to VIP status for Alibaba

17 August 2017

The Chinese e-commerce group raked in over $7 bln of sales in the recent quarter, thanks to a surge in ad dollars. Marketing revenue already accounts for half of the total, and Alibaba is pushing hard to attract more top brands. These early efforts look promising.

Like much else, Amazon can sell debt in a flash

16 August 2017

The e-commerce giant’s blowout $16 bln bond deal suggests further potential for it to pursue M&A. Yet in nearly tripling debt to buy brick-and-mortar Whole Foods, Jeff Bezos’ outfit is starting to look like a traditional retailer. The risk is that its stock will do the same.