Retail

Remy Cointreau’s woes are weighty but temporary

24 January 2020

The spirits maker is relatively more exposed to Hong Kong and China, so protests hit sales harder. The coronavirus and U.S. trade war fallout add extra pressure. But with demand for pricey cognac on the up, Remy still deserves a premium to Diageo and Pernod Ricard.

Sainsbury’s new CEO will need outsider’s mindset

22 January 2020

The UK grocer’s operations director, Simon Roberts, will succeed Mike Coupe in June. The new chief executive’s three decades of experience in retail will be useful. But he may have to rewrite his predecessor’s plans if he wants to deliver better returns for shareholders.

UK property’s crisis cash call tests Boris bounce

20 January 2020

Intu, the struggling landlord of retailers like Zara and Primark, is looking to raise equity to fix its $6.1 bln debt. Doing so would underpin the UK’s post-election property and stock market gains. But given the scale of what Intu needs, it may instead expose their fragility.

Richemont’s triple test to add share price sparkle

17 January 2020

The $46 bln Cartier owner weathered a hit to Hong Kong sales in the last three months of 2019. The shares are up 20% in the past year, but badly lag luxury rivals. To close the gap, the Swiss group must fend off LVMH-powered Tiffany and deliver on its costly online acquisition.

French demos poor excuse for Casino earnings miss

17 January 2020

The retailer’s shares slumped after it said trading profit in France rose just 5% in 2019 – half the previous guidance. On a call with analysts Chief Financial Officer David Lubek blamed recent pensions protests. The unconvincing explanation hints at bigger problems.

Hong Kong’s luxury icon sells new retail model

15 January 2020

Chow Tai Fook plans to close up to 15 of its local stores. The $11 bln jeweller’s decision comes at a moment of calm after months of protests and before a key shopping holiday. That suggests a recovery is distant. Tapping mainland shoppers elsewhere is the new way forward.

UK grocery war will be fought on more than prices

9 January 2020

Tesco’s local sales barely rose over the festive period. Like other big peers, the 25 bln pound company lost market share to discounters such as Lidl. Improving online services and stocking sought-after premium goods may do more to halt the rot than selling products more cheaply.

Mukesh Ambani’s empire will be cast in fresh light

2 January 2020

India’s richest man can reap two big benefits from carving up his sprawling Reliance Industries. First, he would fulfill a promise to make the $130 bln oil-to-telecom conglomerate almost free of debt. It also should help achieve a higher, tech-like valuation from investors.

HR nous will make or break CEOs’ tech ambitions

31 December 2019

Bosses from fashion to financial services love talking about big data, machine learning and artificial intelligence. They list Alphabet and Amazon as rivals for talent. That makes for an extremely tight tech-job market, bringing creative hiring and retention skills to the fore.

Buy now, pay later faces Juul-style backlash

24 December 2019

Companies offering the credit innovation say it can drive online sales and help retailers deal with refunds. One player, Klarna, is valued at $5.5 bln. But making it a lot easier to shop for free could prompt a reaction like that which befell the vaping heavyweight.

Tesco Christmas furore flags limits of ESG crusade

23 December 2019

The UK grocer may have sold greeting cards made by prisoners in China. The scandal shows how even firms that appear to embrace their environmental, social and governance duties struggle with forced labour. Stock prices suggest there’s not much pressure from investors for change.

Investors will rue their Hong Kong risk appetite

19 December 2019

The city’s stocks have lagged the S&P 500 since violent protests started in June. Yet the slide has been less severe than during the Asian financial crisis or the SARS outbreak. Local unrest, trade tensions and a U.S. market reversal should prompt some overdue reconsideration.

Unilever boss needs to channel his inner activist

17 December 2019

The consumer goods giant warned sales in 2019 will grow less than 3%. CEO Alan Jope blames weakness in countries like India, but the miss heaps pressure on him to turn around the sprawling business. Setting out clear targets for dumping sluggish food brands would be a start.

Hong Kong’s stores could use some Chinese medicine

11 December 2019

Cosmetics chain Sa Sa has lost some 40% of its value this year. Months of protests have exposed existing ills, not least a reliance on Chinese visitors. With the economy ailing and tourists staying away, high-street retailers will have to find shoppers in the mainland and beyond.

Angry customers could stomp on Dr Martens returns

10 December 2019

The iconic bootmaker is on the block. If owner Permira sells at the same multiple of EBITDA that it paid, it will earn a 20% annual return, Breakingviews calculates. Buyers must weigh up whether an online backlash over shoddy shoes means cost-cutting has worn out the brand.

Murky Hudson’s Bay deal is as good as it gets

3 December 2019

A bid from an insider with majority backing always puts a company’s board through its paces. Directors of the owner of retailer Saks got their chairman to raise his offer by 11% to $1.4 bln. Yet although it’s the most deliverable deal, they could have pushed harder for the best.

American Dream aims to bypass U.S. mall nightmare

2 December 2019

A new mega-shopping complex in New Jersey offers SpongeBob roller coasters and a ski slope. The mall is devoting more than half its space to experiences in the hope visitors will keep pushing through the doors. With retail sales fast moving online, that may not be enough.

Ocado does enough to keep investors believing

29 November 2019

The 9 billion pound UK online retailer has signed an e-commerce deal with Japan’s Aeon. Ocado is loss-making, and fees are far-off. But like any tech player, its pitch is more about reassuring investors that a punchy valuation is underpinned by growing demand for its know-how.

China’s Pinduoduo digs in for a long Alibaba fight

21 November 2019

Investors wiped $11 bln off the e-commerce challenger’s market value after it posted a worse-than-expected quarterly loss. The rising cost of wooing consumers is to blame, as Pinduoduo battles its largest rival for big-city shoppers. Profitability just got a little more distant.

Target effectively plants a foot in both worlds

20 November 2019

The U.S. retailer reported better-than-expected sales at its stores. It’s one of the sector’s winners despite being an e-commerce latecomer. The lesson is that the sweet spot for retailers may be somewhere between the real and digital worlds – something even Amazon has noticed.