Chipotle’s yuck overwhelms financial yum 25 Jul 2017 The $10 bln burrito chain delivered healthy financial results that exceeded expectations. It won't be enough to restore confidence, however, after a new suspected norovirus outbreak and video surfaced of rodents at one location. More radical change at the top may be necessary.
Barnes & Noble sale has plot logic but no ending 25 Jul 2017 An activist wants the $560 mln U.S. bookstore chain to go private. That makes sense for a fading business that needs work. The problem is finding a buyer on the other end. Amazon’s Whole Foods deal has everyone thinking. But Barnes & Noble may be nowhere on Jeff Bezos’ list.
Jimmy Choo buyout could blister the brand 25 Jul 2017 U.S. label Michael Kors is paying $1.2 billion for the luxury shoemaker. Three nimble steps are necessary to justify that price: supercharge sales, improve margins and find synergies. The buyer’s track record shows that is achievable, but at risk of taking Choo downmarket.
B&M is unimaginative punt on Brexit Britain 24 Jul 2017 The discount retailer has been named as a potential 4.4 bln pound target for Wal-Mart’s Asda. With incomes tightening, UK shoppers will want cheaper goods. Yet Asda could as easily soup up its existing offering or copy rivals Tesco and Sainsbury’s with a more ambitious deal.
Puppy love keeps IPO investors on the leash 21 Jul 2017 Snap's stumble, Blue Apron's disastrous debut and YogaWorks' yanked listing spelled doom for trendy, fast-growing businesses. Then shares of PetIQ jumped some 30 pct. More sensible pricing helped the maker of dog treats and medicine, but it also remains vulnerable to competition.
Alibaba rewrites its e-commerce playbook 20 Jul 2017 China's online giant is trumpeting "new retail": a push into bricks-and-mortar shopping. That could help sustain high growth. But abandoning the asset-light model which has been Alibaba's unique selling point will weigh on profits.
Carrefour unit shows way to Brazil IPO revival 19 Jul 2017 The French supermarket chain’s local unit raised $1.6 bln in the country’s biggest stock offering in four years. Rising deal flow suggests growing confidence Latin America’s largest economy is getting back on track. But the recovery’s pace is tepid, and sensible pricing is key.
Ericsson throws kitchen sink at the kitchen sink 18 Jul 2017 The Swedish telecom kit maker has issued its second profit warning in four months. Demand for wireless networks is shrinking faster than thought. At least Ericsson is no longer losing market share, and has put a number on touted cost savings. It can’t afford to disappoint again.
Bond market breathes life into erstwhile zombies 17 Jul 2017 European investors are refinancing companies like Dutch retailer Hema that not long ago were trading at distressed levels. Such credits are enticing when central banks have squashed yields, and Europe’s economy is recovering. Markets are unlikely to remain so forgiving for long.
Amazon monopoly game will take forever to play out 14 Jul 2017 The e-commerce titan's Whole Foods deal has sparked fresh fears of its dominance. One hedgie says whispers of a possible congressional review prompted him to short the stock. How antitrust law applies, though, is unclear. For now, consumers and investors probably keep winning.
A trend for Burberry to copy: focus on margin 12 Jul 2017 The British brand had a good first quarter and is on track to deliver planned cost cuts. That still leaves new boss Marco Gobbetti with plenty to do to rebuild investors’ confidence. A good option would be to follow Saint Laurent’s lead and set a firm operating margin target.
Amazon’s path of destruction is primed to broaden 11 Jul 2017 The e-commerce giant that decimated booksellers now has supermarkets and department stores quaking in fear. That emotion should be shared by retailers’ suppliers of branded goods. Amazon’s ambitions to sell its own products poses a growing threat to the likes of P&G and 3M.
TalkTalk’s focus on cheap may not be cheerful 10 Jul 2017 The UK broadband provider’s founder Charles Dunstone wants to grow the business with a focus on value for money. That’s risky in a competitive market, and endangers profitability. The alternative – finding a buyer – could be tricky given the company’s rich valuation.
SoundCloud flags music’s lopsided digital revival 7 Jul 2017 The German streaming service is cutting 40 percent of staff, according to reports, after Spotify shelved a possible purchase last year. With most of the returns from the industry’s digital renaissance going to labels, streamers have yet to prove they have an independent future.
Victoria’s Secret catches investors gawking 6 Jul 2017 The intimate-apparel chain badly missed expectations for June sales, prompting the loss of some $2 bln from its parent company's market value. Disappearing shoppers is all too common a refrain these days, and far beyond L Brands. There's no excuse for being sanguine about retail.
John Malone papers over QVC woes with HSN purchase 6 Jul 2017 Liberty Interactive is taking full control of the home-shopping channel in a $2.1 bln deal. Merging two cable vendors makes sense, and investors should end up with something more valuable than a tracking stock. But a complex share swap alone won’t solve deeper retail challenges.
ABF deserves more credit for retail flair 6 Jul 2017 Primark clothing stores, which generate half of group operating profit, are faring better than expected. Market share is rising even though the chain shuns online sales and is offering fewer discounts. That kind of retail flair bodes well for ABF’s valuation.
Retail click jobs can brace only so many bricks 5 Jul 2017 The next decade threatens to doom U.S. workers at the likes of Macy's, Staples and Foot Locker. E-commerce should offset a good portion of the losses. Even assuming a healthy 40 pct increase in such roles, though, a Breakingviews analysis suggests some 600,000 jobs may vanish.
Ocado has a delivery problem to fix 5 Jul 2017 The UK online grocer’s pre-tax profit fell in the first half and net debt is rising. Its big dream of selling cutting-edge technology to other retailers generates less than 10 percent of revenue. Rapid delivery is imperative at a time when Amazon is prowling the aisles.
Stonyfield deal whipped up by U.S. yogurt frenzy 3 Jul 2017 France's Lactalis is paying 20 times EBITDA for Danone's yogurt brand, or $875 mln. While American demand has propelled upstarts like Chobani to multibillion-dollar valuations, growth has slowed. It may be hard for the old-school label to woo new consumers.