Costco will struggle to shake off Amazon discount 5 Oct 2017 The U.S. members-only retailer grew sales by 15.8 pct in its fourth quarter. Yet its shares haven't recovered since Amazon expanded into groceries. There’s room for both, but the e-commerce giant has an advantage: its shareholders are used to tiny operating margins.
Amazon’s delivery self-help may have AWS effect 5 Oct 2017 The e-commerce goliath's web needs led it to build something for itself that became a big and profitable business. Jeff Bezos is now testing a way to ship goods to save money, a venture that could threaten UPS and FedEx. Amazon's solutions are a growing problem for others.
Tesco is spinning its wheels to get nowhere fast 4 Oct 2017 CEO Dave Lewis has boosted margins at Britain’s biggest supermarket, shrunk the pension deficit and cut debt. The first dividend in three years confirms the rebound. Yet the threat from inflation, weak consumer demand and online rivals have left Tesco shares stuck in a rut.
Canadian $3.6 bln grocery deal puts price on fear 2 Oct 2017 Metro is buying pharmacy chain Jean Coutu. The value creation from the proposed deal, though, is less than the premium being paid. That doesn’t sound good for Metro investors – but threats from Amazon and a rapidly consolidating sector might have been worse.
TaskRabbit deal reveals what even IKEA can’t build 28 Sep 2017 The Swedish furniture giant has bought the odd-job app. Though the price is undisclosed, it's a rare tech acquisition that makes sense given how much of TaskRabbit's business must be assembling Billy bookcases and such. By contrast, most startup M&A has been poorly constructed.
Amazon European shopping talk is wishful thinking 28 Sep 2017 Supermarkets Carrefour and Sainsbury have been floated as potential targets following the e-commerce giant’s $13.7 bln purchase of Whole Foods. But CEO Jeff Bezos already owns the one grocer he really needs. Bid speculation only obscures the broader competitive pressures.
BJ’s buyout may prove salivating retail exception 27 Sep 2017 Leonard Green and CVC snagged the cash-and-carry chain with a low-ball bid in 2011. They have taken out hefty dividends and are hawking it for some $4.5 bln. Even if they can’t find an enthusiastic buyer, the returns may prove tantalizing enough for others to reconsider retail.
Google clears deck for huge antitrust fight 27 Sep 2017 The company is separating its European shopping unit and allowing rivals to bid for ads. That solves one problem it has with watchdogs while minimizing losses and continuing an appeal. It also frees up Google to battle the EU over claims it uses Android to dominate online search.
Alibaba trades margins for clarity in logistics 26 Sep 2017 The tech giant is paying about $800 mln to lift its stake in logistics arm Cainiao slightly to 51 pct. Keeping the unit at arm’s length had prompted SEC scrutiny. But absorbing the capital-intensive and loss-making Cainiao into the parent’s accounts will weigh on margins.
Retailer puts huge discount on activist overreach 25 Sep 2017 Two hedge funds want to oust Tuesday Morning’s Steven Becker, a fellow pushy investor who ended up as CEO. The home-furnishing chain’s stock has fallen 62 pct on his watch - a reminder that having smart financial ideas doesn’t mean activists make good corporate chieftains.
Chinese online retailer sits in lap of IPO luxury 21 Sep 2017 Secoo has carved out a nice niche, selling upscale brands such as Tod's and Versace. Its customer base is small, though, and the firm is burning cash. Even so, impressive order sizes and a clean image make it a tempting target for counterfeit-fighting Alibaba and mass-market JD.
Viewsroom: German election all about runners-up 21 Sep 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 Sep 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 Sep 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 Sep 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 Sep 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 Sep 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 Sep 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 Sep 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 Sep 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.