Retail

Parent’s bankruptcy loosens its grip on Casino

24 May 2019

The French grocery giant’s debt-riddled controlling shareholder, Rallye, sought protection from its creditors. For now, Casino will keep sacrificing growth to pay large dividends to owner Jean-Charles Naouri. But a debt restructuring might eventually free the 3.5 bln euro group.

FamilyMart fracas reheats Chinese corner-store war

23 May 2019

The $13 bln Tokyo-based chain is suing to end its mainland joint venture. It already ranks second in China, ahead of Japanese peers Lawson and 7-Eleven. Untethered, it could expand faster, find a tech-savvier partner, and perhaps take the lead.

Walmart is a test of broader tariff harm

16 May 2019

The retailer reported U.S. sales rose 3.4%, yet momentum could wane once higher border levies on another $200 bln of imports from China kick in. Walmart may not be the most exposed business, but Americans shopping at its more than 5,300 stores will feel it in their pockets.

Tencent deserves its premium over Alibaba

15 May 2019

China’s tech titans face slower growth in their respective strongholds of video games and e-commerce. As they fight it out in finance, Alibaba's $150 bln affiliate, Ant, is winning. Tencent's chat app, though, gives it an overall edge that justifies a higher earnings multiple.

Jumia reveals risky allure of big African numbers

13 May 2019

The online retailer’s first-quarter operating losses widened even though revenue doubled. After falling 63% from their post-IPO peak the shares still trade on a similar multiple of future sales as Alibaba. Africa has promise but merits a steeper discount to the Chinese behemoth.

EssilorLuxottica’s boardroom truce is fuzzy

13 May 2019

Chairman Leonardo Del Vecchio and his French counterpart have asked their lieutenants to jointly lead strategy at the $54 bln eyewear giant. The ceasefire averts damaging litigation at the newly merged group. But it won’t make the search for an external CEO much easier.

JD’s profit strength hides shopper fatigue

10 May 2019

After an impressive first quarter, China's $40 bln web retailer is on track for its first annual net profit. But customer growth has flatlined. That suggests damage from nemesis Alibaba catching up in logistics, and upstarts like Pinduoduo adapting faster to new consumer trends.

Budweiser’s Hong Kong IPO may pop open more M&A

10 May 2019

AB InBev has filed documents to float its Asian business. It will fetch a higher valuation multiple than its parent, and could be worth some $60 bln, helping to pay down some debt. The shares also give deal junkie boss Carlos Brito a currency to shop for more.

Kering can stomach Gucci’s tax blow in Italy

9 May 2019

François-Henri Pinault’s maker of pricey sneakers and bags has agreed to pay Italy’s taxman 1.25 bln euros to atone for past sins. The fine is a stain on Gucci’s reputation. But parent Kering’s lean balance sheet means it can absorb the hit and still go after juicy M&A targets.

Poorly sales add to next Reckitt CEO’s ailments

2 May 2019

The Durex-to-Dettol maker’s revenue disappointed in the first quarter. Whoever replaces Rakesh Kapoor has to worry about stagnant health brands, legal risks from the opioid crisis, and demand for baby products in China. A mooted breakup of the group is getting trickier.

Sainsbury’s Plan B is underwhelming

1 May 2019

The UK grocer will spruce up stores and cut prices. A new strategy was needed after boss Mike Coupe’s failed takeover of Asda. But with discounters and rivals gaining ground, Coupe needs to be bolder. The risk is that Sainsbury’s keeps losing market share as competition hots up.

Amazon’s best weapons are sprawl and usefulness

25 April 2019

With revenue of $60 bln in the last three months alone, it’s hard for Jeff Bezos’s firm to stay camouflaged. U.S. presidential hopeful Elizabeth Warren has already made Amazon a target. Expect more cash to be diverted into socially helpful technology and geographic dispersion.

UK supermarket M&A will return in bargain bin

25 April 2019

The competition watchdog blocked Sainsbury’s proposed $9 bln takeover of Asda. CEO Mike Coupe has few palatable options to cope with German discounters and the revival of UK peers. Deal fever will resurface after the rot sets in and the grocer’s share price has fallen further.

Casino sales merely keep its head above water

23 April 2019

The indebted 4.2 bln euro French retailer has sold 470 million euros of supermarkets to U.S. buyout firm Apollo. The valuation looks adequate and the group’s shares are well above September lows. But leasing back its own stores will act as a drag on Casino’s recovery.

Chinese millennials create M&A urgency for Kering

18 April 2019

Gucci’s success, especially with the mainland’s young affluent, is a blessing and a curse for Francois-Henri Pinault’s luxury empire. The Italian brand accounts for 61 pct of sales. Finding another marque, like Valentino or Patek Philippe, to balance the business won’t come cheap.

Apollo’s grocery-store double dip looks digestible

17 April 2019

Leon Black’s buyout shop is buying niche food retailer Smart & Final for the second time in 12 years. The chain’s earnings have come under pressure of late. But at $1.1 bln Apollo isn’t paying a fat multiple. And its knowledge of the firm and the industry should serve it well.

Bezos breathes down overpaid Oracle bosses’ necks

11 April 2019

The Amazon founder’s bold bets helped the e-commerce giant create a $30 bln cloud unit. His annual letter talks about winning more commercial-database business. It’s a warning for Oracle’s top executives, who will need to better justify their pay if they’re to see Bezos off.

LVMH sales fizz is sign of strong getting stronger

10 April 2019

Like-for-like sales at the 165 bln euro luxury giant grew a chunky 11 pct in the first quarter. The “buoyant” performance defies both slowing global economic expansion and trade tensions. It’s a good omen for other fashion conglomerates, but not for weaker single-brand rivals.

Levi Strauss schools Big Tech on IPO success

10 April 2019

The $9 bln jeans maker reported a healthy profit in its first results since going public last month, giving the stock a fresh boost. It now trades 35 pct above its initial offering price. Levi’s may not be flashy, but the company delivers the goods better than the likes of Lyft.

Magnit’s Lenta counterpunch has yet to connect

5 April 2019

The Russian retailer has lobbed in a rival bid for its domestic rival. Magnit’s approach is fuzzy and barely more generous than oligarch Alexey Mordashov’s swoop for a 42 pct stake in Lenta. But it might prompt minority investors to think twice about which offer they back.