One thing Tesco doesn’t stock is pricing power 13 Apr 2016 Same-store sales and operating profit are rising, but prices on the UK grocer’s shelves keep falling. It’s a problem for rivals too. Tesco used to be dominant in a concentrated market; now it’s just plain big. Consumers’ gain will be investors’ loss for the foreseeable future.
Bollore stake boosts Fnac’s Darty bid in two ways 12 Apr 2016 The Vivendi chief is buying a 15 pct stake in struggling French CD and book seller Fnac. That gives the retailer more cash to up its 660 mln pound bid for Darty. Speculation about what the billionaire has in mind should boost the value of the shares Fnac is offering Darty too.
Alibaba’s $1 bln Southeast Asia buy tests limits 12 Apr 2016 The Chinese e-commerce giant is taking control of upstart Lazada in its largest overseas deal to date. Countries like Indonesia and Malaysia offer new growth. But widening losses and fierce competition mean expansion is not cheap. It also dilutes Alibaba’s asset-light model.
Uniqlo’s plans to dress the world no longer fit 8 Apr 2016 Fast Retailing’s value has halved since August to $26 bln. Founder Tadashi Yanai blamed awful first-half results on everything from warm weather to the rising yen. Reaching his goal of creating the planet’s No. 1 brand will require much better execution no matter the headwinds.
Cox: Dan Loeb helps one Abenomics arrow hit target 7 Apr 2016 Forget the Bank of Japan’s negative interest rate blunder, or the government’s muddled fiscal policies. Prime Minister Shinzo Abe’s corporate-governance reforms hold the most promise. The pushy investor’s fight with the operator of Seven-Eleven convenience stores offers a useful glimpse.
YSL adds to unhappy trend of big designer exits 1 Apr 2016 Hedi Slimane is leaving the luxury house after four years. It’s a setback for one of French group Kering’s fastest-growing labels. Losing the odd creative is no crisis, but with recent exits at Dior, Gucci and Lanvin, retaining talent could drag on profitability.
Metro demerger might lift valuation by a third 30 Mar 2016 The 8 bln euro German retailer is splitting in two. Its food and electronics business had few synergies but a big conglomerate discount. If Metro can close half the valuation gap to peers, and Russia doesn’t deteriorate further, shareholders should be significantly better off.
Sharp take-under oddly denotes Japanese success 30 Mar 2016 Foxconn has clinched control of the ailing Japanese display maker for a reduced $3.5 bln. Fixing Sharp will be a tough task for the Taiwanese giant led by Terry Gou. But this historic, if somewhat ugly and complicated deal, is Exhibit A that Japan Inc is capable of reform.
British retailers need more age-appropriate attire 24 Mar 2016 Next’s same-store revenue is falling and inventory is taking a week longer to clear than a year ago. Yet it plans to grow its selling space by 8 pct. Other retailers too are expanding even when shrinking looks smarter. The maths of such strategies can quickly turn unattractive.
Online boom carries windfall to Chinese couriers 23 Mar 2016 Alibaba-backed delivery company YTO has unveiled a $2.7 bln backdoor listing in Shanghai. China’s e-commerce boom means demand for logistics has soared. Though higher wage costs are squeezing margins, growth will continue. Besides, the valuation doesn’t look excessive.
Bang & Olufsen buyout hinges on China bass boost 22 Mar 2016 The Danish electronics maker is in bid talks with Chinese luxury distributor Sparkle Roll. Both companies’ business models are under pressure. At B&O’s inflated $447 mln price it would be hard to make a deal stack up – unless sales can be massively increased in China.
Home Retail: A tale of when smaller is better 18 Mar 2016 Even a generous bid isn’t a happy ending for the UK retailer. Investors who bought in at the Argos owner’s market debut a decade ago are now a third worse off. Burberry and Experian, the consumer groups it spun out, have soared. Mergers fix some problems; demergers more so.
Chipotle pay a few ingredients short of a burrito 17 Mar 2016 The U.S. fast-food chain is tying 2016 equity bonuses exclusively to its share price after a food poisoning fiasco consumed $9 bln of market value. It’s too simplistic, encourages bosses to think short term and fails to address all-important qualitative food safety concerns.
Sainsbury can open its wallet wider for Argos 15 Mar 2016 The UK grocer’s like-for-like sales have turned positive, but prices are still falling. A proposed 1.4 bln pound merger with rival Home Retail is a decent coping strategy, if Sainsbury can beat rival bidder Steinhoff. A boost of 10 pct would still just about make financial sense.
Inditex magical formula begets magical valuation 9 Mar 2016 The owner of fashion chain Zara’s like-for-like sales in 2015 were its best in a decade. Not bad for a retailer that eschews ads. The luxury valuation that has produced would make sense if not for currency wobbles, and the company’s reticence on the economics of its online business.
Burberry bid would be an extravagance 8 Mar 2016 The trench-coat maker is the subject of takeover speculation but a deal, which could cost 8 bln pounds, doesn’t stack up. Its stock isn’t particularly cheap and costs are already lean. With the luxury sector deteriorating, it’s not clear a new owner could halt slowing sales.
Samsonite looks smart to walk away with Tumi 4 Mar 2016 The luggage giant is buying its smaller rival for $1.8 bln, or 13.6 times EBITDA. That’s a big price tag. But Tumi’s upmarket cabin bags will boost Samsonite’s appeal to CEOs and other high-rollers. Its new owner could also help the brand travel further outside the United States.
Sports Authority loses game with unforced errors 2 Mar 2016 The U.S. retailer declared bankruptcy a decade after a $1.3 bln buyout. Debt and internet competition contributed to its demise, but rivals like Dick’s survived similar challenges and turned in a stellar performance. Bad management was largely to blame for the costly strikeout.
Darty bids will leave investors well upholstered 2 Mar 2016 The electrical retailer’s 662 mln pound merger with French bookstore Fnac has been gazumped by furniture retailer Conforama. Fnac could pay a lot more, and add cash. But Conforama’s parent seems intent on diversifying away from South Africa. Darty can sit tight for a better deal.
Amazon pantry raid should worry UK grocers 29 Feb 2016 The Seattle giant’s move into British fridges, via a deal with Wm Morrison, is starting modestly. Just 5 pct of UK grocery sales happen online, and profit is scarce. But Amazon has three things in its favour: size, a tolerance for low margins, and no pesky real-world stores.