Richemont’s downsizing is worth copying 12 May 2017 The Swiss luxury watchmaker’s full-year sales disappointed and margins are now touching financial crisis lows. At least chair Johann Rupert has recognised the need to shrink. It’s an example that others like Prada would do well to follow.
Viewsroom: Comey ouster bad for business 11 May 2017 Donald Trump’s surprise firing of the FBI director could bog down policies from tax cuts to regulatory reform and even throw the rule of law into question. South Korea elects a new leader to put its own presidential scandal in the past. Plus: Coach goes shopping for Kate Spade.
Burberry looks better without boardroom wrinkles 9 May 2017 In two months, designer Christopher Bailey will be replaced as CEO but keep outsize influence and a board seat. That might be tolerable were Burberry performing better. Now, it’s clear new boss Marco Gobbetti needs a free hand. Bailey has a role, but ideally a lesser one.
Coach pays luxury price to catch up with LVMH 8 May 2017 The U.S. handbag maker is plunking down $2.4 bln for Kate Spade, a figure not justified strictly by the numbers. But Coach's owners like the move to a multibrand portfolio, which has worked for LVMH and Kering. Mature luxury marques can no longer expect to succeed on their own.
M&S opts for safety over real shakeup 5 May 2017 The UK high street stalwart named Archie Norman as its chairman, days after finding a new boss for its clothing unit. His retail nous will bolster M&S’ turnaround plans. Yet the hire is the latest in a series of safe choices that underestimate the changes sweeping retail.
Viewsroom: Apple starts iPhone birthday bash early 4 May 2017 Lucre from apps and other services should get investors in the party mood ahead of the company’s iconic device turning 10. Big Oil gets buoyed by rising prices – and the New York Times by more readers. And Coach shows the retail industry how to cope with upheaval, up to a point.
Next iPhone is key to Apple’s future in China 4 May 2017 Sales in what was once Apple's biggest growth market have now fallen for five straight quarters. Stiff competition with local handset makers and a weaker yuan both hurt. While app-store sales are promising, a real turnaround hinges on the success of its next flagship smartphone.
Sainsbury over-seasons a stale retail recipe 3 May 2017 The supermarket’s full year like-for-like sales fell 0.6 percent, despite help from recently acquired Argos. Rival Tesco is diversifying too through its purchase of wholesaler Booker. Greater complexity masks problems caused by a long price war, but doesn’t fix them.
Coach’s luxury shopping habit risks distraction 2 May 2017 The high-priced handbag maker’s good third quarter is a bright spot amid struggling retailers. It doesn’t justify buying Jimmy Choo or Kate Spade, however. CEO Victor Luis vows no poor deals, but most are likely to be a tougher fit than his 2015 acquisition, Stuart Weitzman.
Hillhouse makes cautious pass at China’s Belle 28 Apr 2017 The Chinese investment manager has joined with CDH and bosses to take the struggling mainland shoe retailer private. At $6.8 bln, this could be one of Asia's largest management buyouts. The offer isn't extravagant, but making Belle's results pretty again won't be easy.
Amazon well of web profit may gush a bit slower 27 Apr 2017 The online giant’s retailing arm shredded rivals in the first quarter, and investors cheered a 41 pct increase in earnings. Yet web services, lately a seemingly limitless source of revenue, showed decelerating growth. It could be that rivals are finally sipping from the firehose.
Chipotle partly fulfills Bill Ackman’s order 26 Apr 2017 Recovering sales at the $14 bln burrito chain helped keep the pushy investor's big bet on a roll. A new payments data breach could make investors queasy again, though. Chipotle has a long way to go before it cooks up the kind of return Ackman's Pershing Square typically craves.
Wal-Mart reroutes e-commerce race to last mile 25 Apr 2017 The mega-retailer may add khakis merchant Bonobos to its growing web collection. More significantly, Wal-Mart just started discounting online items if customers pick them up in stores. Making the model work is a tall order, but at least tries to exploit an edge it has on Amazon.
Whole Foods can make Cerberus complete in grocery 25 Apr 2017 Trump pal Steve Feinberg's private-equity fund pulled a $12 bln float for supermarkets chain Albertsons in 2015. Albertsons could go public, and burnish its shelf space, by reversing into organic grocer Whole Foods. GE’s recent deal with Baker Hughes shows how that might work.
Ericsson turnaround has a static problem 25 Apr 2017 The Swedish telecoms kit maker made a $1.4 billion first-quarter operating loss after provisions and writedowns announced in March. New boss Borje Ekholm has the right strategy. But investors will still fret about further nasty surprises and a lack of progress on non-core sales.
Arnault’s new-look Dior pleases almost everyone 25 Apr 2017 The French tycoon is offering to buy out minority investors in Christian Dior for 12 bln euros. LVMH shareholders will also welcome a streamlined empire. The most stylish twist is that Arnault is using the luxury giant’s balance sheet and shares in rival Hermes to pay for it.
Jimmy Choo seeks new owner for scuffed brand 24 Apr 2017 The high-heel label is for sale less than three years after its IPO. Owner JAB may need cash following its $7.5 billion purchase of Panera Bread. There is room to increase Jimmy Choo’s operating margin, but with slow sales growth, it already looks expensive.
Burberry’s brand shows worrying fragility 19 Apr 2017 The UK luxury group's revenue is falling on a constant-currency basis. The strong dollar has hit demand in the U.S., but Burberry also restricted sales to protect its brand. The fact that it has to do so isn't great for investors after multiple rejected takeover offers.
Online retailers betray limits of the internet 18 Apr 2017 Websites like Amazon and furniture seller Made.com are opening physical showrooms so punters can look before they buy online. Being footloose remains better than having old retail’s cost bases. But the new entrants wouldn’t be hiking their own expenses if they didn’t have to.
Breakdown: How the smart money sees Sears upside 12 Apr 2017 It's easy to interpret CEO Eddie Lampert's commitment to the ailing U.S. retailer as bordering on obsessive. Bruce Berkowitz is another matter. His firm, Fairholme, reckons Sears could be worth perhaps 10 times its $1.4 bln valuation. Breakingviews unpacks the real-estate logic.