Tesco customer-first strategy will chafe investors 12 Apr 2017 The grocer had its first full year of like-for-like UK sales growth in seven years. Boss Dave Lewis hopes to shield shoppers from rising prices, but not crush suppliers. The risk is that he has to fund that plan with the spoils of Tesco’s $4.6 bln purchase of wholesaler Booker.
Whole Foods cart already loaded with Jana produce 11 Apr 2017 Barry Rosenstein’s activist fund wants the $11 bln grocer to shake up management and the board, boost profit and explore a sale. The upscale grocer has sampled most of these wares as it tries to turn around limp sales. Jana’s push should speed up the checkout process.
Zara may end up bound by family ties 7 Apr 2017 The founder of Spain's Inditex, which owns the fashion chain, placed his stake in a holding company, ensuring his heirs keep control. It looks benign for investors, who have made handsome returns. The problem comes if future retail disruption calls for a break from tradition.
Staples buyout belongs only on back of an envelope 6 Apr 2017 The $6.4 bln office-supplies chain is in talks with private-equity shops about a possible deal. Even if a new owner could stop profit from falling, use ample debt and extract dividends, the return math looks shaky. And it would be crazy to count on reviving an Office Depot merger.
7-Eleven owner steps on the gas in Texas 6 Apr 2017 Japan's Seven & i will pay $3.3 bln for most of Sunoco's gas stations, building on its lead as America's top convenience-store chain. Financial details are scant, but there is a good geographic fit. The buyer has also clearly moved on from last year's sensational boardroom coup.
Amazon does a clever bit of shopping itself 5 Apr 2017 Jeff Bezos, who upended retail as a dominant seller, will power his warehouse forklifts with a novel deal. In exchange for buying hydrogen fuel cells, Amazon gets discounted warrants in supplier Plug Power. The customer imprimatur could make a good investment even better.
Panera buyout overeggs fast-food feeding frenzy 5 Apr 2017 At $7.5 bln, JAB is paying 41 times earnings for the sandwich maker. That may prevent interlopers from mounting a counteroffer. And the owner of Krispy Kreme and Peet’s Coffee has brand expertise and good management. But such a rich valuation will have few rivals in the M&A oven.
Asos takes costly fashion cues from Amazon 4 Apr 2017 The UK online clothes retailer has raised sales forecasts on international demand. But Asos is becoming pricier to run: six-month costs rose 38 pct, more than the group's top line. Asos is investing prudently, but a rich valuation leaves it exposed to web-based competition.
Cox: Sears may leave an even bigger finance legacy 30 Mar 2017 The original everything store is hurtling toward bankruptcy under hedgie Eddie Lampert. Its catalog, first published in 1888, is the stuff of retail lore. Sears' empire also once spanned Allstate and Discover, which live on. That's the history lesson for Amazon and Alibaba.
TPG’s J. Crew is part of bad retail LBO pattern 30 Mar 2017 The private-equity shop's second bite at the preppy clothing chain hasn’t delivered the huge returns of the first. J. Crew is struggling under $1.5 bln of debt. Specialty U.S. merchants have been popular buyout targets, but plenty are paying the price for years of high leverage.
H&M may struggle to dress two markets 30 Mar 2017 Sales at the fashion retailer missed its target, sending shares close to a four-year low. H&M is opening stores in fast-growing emerging markets, while launching a posh new brand to liven up flagging rich-country sales. It’s tough to find a business model that suits both.
Tesco has three issues, but only one matters 28 Mar 2017 Some investors think the UK grocer's merger with wholesaler Booker is distracting and expensive. Regulators are punishing it for an old accounting scandal. And customers just want ever-lower prices. This last challenge is the only one with the potential to knock Tesco off course.
Dubai mall owner throws sand in Amazon’s face 27 Mar 2017 Emaar Malls has challenged the U.S. retailer with an $800 mln counterbid for Souq.com. Amazon has technical expertise and deep pockets. But the owner of Dubai’s largest retail park has local knowledge, powerful allies and, most importantly, an existing business model to defend.
Amazon’s Souq buy is cheap, curious trinket 23 Mar 2017 The online retailing giant is paying less than $1 bln for the Middle Eastern e-commerce upstart. Amazon gets a low-cost toehold in a region full of anti-competitive barriers. Yet overseas buyers have a history of regretting purchases of shiny objects in this labyrinthine market.
Unilever’s spreads sale plan contains adequate fat 23 Mar 2017 After Kraft’s aborted bid, the Marmite maker needs a self-help plan. Selling its spreads business would be risky as weak growth prospects may mean a low price. But on modest assumptions a private equity buyer could get a decent return – and kick-start Unilever’s reinvention.
Next takes fashion tips from financial world 23 Mar 2017 The retailer has subjected itself to a stress test – previously the stuff of banks. The result: if a store’s sales fall 6 pct a year for a decade, its net profit margin will halve. Openness about problems is welcome. But this voluntary exam may gloss over some other risks.
Li Ka-shing sails through choppy global seas 23 Mar 2017 The Hong Kong tycoon’s CK Hutchison saw net profit rise 6 pct in the full year. That is impressive given stuttering growth at home and Brexit pains. Globally, the allure of conglomerates is fading. But the results vindicate the East-West strategy of Asia's "superman".
Sears endgame and Lampert’s may diverge 22 Mar 2017 The troubled U.S. retailer warned it could be headed for bankruptcy after a 12 pct decline in sales and more losses. The hedge-fund boss's long quest – and drip feed of credit – to turn Sears around looks destined to fail, but along the way he has hedged some of his bets.
Hadas: The stakeholder revolution has been delayed 22 Mar 2017 Robust takeover rebuttals by Unilever and Akzo Nobel suggest that explicitly ethical stakeholder capitalism can overturn the idol of short-term shareholder value. That mostly makes economic sense. But the pressure for quick financial results is increasing. Compromise, please.
Albertsons’ shopping drives away grocery bargains 21 Mar 2017 The supermarket chain owned by Cerberus may add $3 bln organic specialist Sprouts to its cart. Bulking up is a good way to ensure survival, and could facilitate an IPO. But Albertsons’ buying spree is becoming increasingly expensive, and competition threatens industry margins.