Hugo Boss growth plans are a size too big 25 Feb 2016 The German label’s chief of eight years is stepping down after a profit warning wiped a fifth off the company’s value. Conditions in the U.S. and China are getting tougher. But the brand’s global expansion and plans to move upmarket also look to have run out of steam.
Restoration Hardware gives new excuse for failure 25 Feb 2016 The U.S. furniture retailer said sales slowed because of January’s stock market jitters. Given the high prices of Restoration products, it’s not far-fetched to believe its affluent customers have some sensitivity to the wealth effect. But this sounds like the new bad weather.
Gucci gives sneak preview of life after turnaround 19 Feb 2016 Kering’s most important luxury brand beat sales estimates in the fourth quarter, the result of more desirable products and a slick advertising campaign. It looks to be putting three years of bumpy growth behind it. Yet falling operating profit margins will continue to drag on the valuation.
Refreshing candor springs from Jack in the Box 18 Feb 2016 The fast-food chain isn’t blaming currency, the weather or other such issues for an earnings miss that sent its stock slumping 18 pct. It’s being much more forthright: the new all-day breakfast from rival McDonald’s whacked prices. Such honesty is rare – and is to be applauded.
HNA’s $6 bln Ingram bid has weird Chinese logic 18 Feb 2016 There’s no clear rationale for the conglomerate to buy a U.S. electronics distributor and leave its management and business untouched. But like other recent outbound Chinese deals, the acquisition gives HNA diversification, political capital, and a hedge against the sliding yuan.
Fairway’s failings spoil fancy supermarket sector 9 Feb 2016 The New York area chain warned it may go bust just three years after its IPO. While smaller than rivals like Whole Foods, Fairway’s losses and over-ambitious expansion serve as a reminder of the industry’s challenges. It can’t help Albertsons’ plans for a big stock market debut.
Pandora’s rapid growth is no longer a charm 9 Feb 2016 Growth of the Danish jeweller’s sales of trinkets and charm bracelets will halve to 14 percent in 2016. The stock, which doubled in a year, has fallen a fifth in a week. When expectations are high, a little disappointment goes a long way, especially for discretionary products.
Amazon seeks brick hedges for click shipping costs 3 Feb 2016 Delivery subsidies cost $5 bln last year, and they are rising. A mall owner says Jeff Bezos’ internet-retailing giant may open hundreds of bookstores. If so, it will encourage customers to become their own “last-mile” service. The gains for Amazon would be biggest in cities.
Lowe’s makes an offer even Canada can’t refuse 3 Feb 2016 The U.S. home-retailing chain has won over Rona with a 104 pct premium valuing its northern counterpart at C$3.2 bln. Protectionism helped thwart a bid from Lowe’s in 2012. A strong dollar made a knockout bid easier now. And it turns out the color of money suits any flag.
LVMH shows there is life after China 3 Feb 2016 Sales at the French luxury giant grew a smart 6 percent in 2015. Jewellery and perfume were standouts. The Dior owner’s shares have taken a sharp tumble since China stock market jitters roiled the sector in August. These results suggest the discount is overdone.
Sainsbury’s Argos deal checks out 2 Feb 2016 The UK supermarket has bagged Argos owner Home Retail Group for 1.1 billion pounds, a price that leaves it ample room for error. Even if it does no more than cut back obvious overlap, the deal should create value. Both businesses were in a strategic pickle; Home Retail’s was worse.
Luxottica wears its dysfunctional governance well 2 Feb 2016 The revolving door at the Italian eyewear group hasn’t spooked the market as much as it should. The shares are up over 30 percent since Luxottica lost the first of three CEOs in 17 months. With steady growth and a rollout in emerging markets, it can afford the dramatics for now.
Amazon could eventually face a Xerox moment 28 Jan 2016 The online retailer is growing rapidly, while the tech icon has faded fast. But both companies pair businesses that don’t fit together. Activist Carl Icahn persuaded Xerox to split off its more promising assets. If he’s still around, a similar move might someday work for Amazon.
H&M suffers from rare wardrobe malfunction 28 Jan 2016 The Swedish fast-fashion retailer said discounts on a glut of winter wear would weigh on sales. H&M is a little less efficient than chief rival Inditex, and the strong dollar isn’t helping either. Still, both are in a different league from most peers.
Wal-Mart store closings a sign of Amazon gains 15 Jan 2016 The largest U.S. retailer is still growing, but plans to shutter 269 outlets suggest darker days ahead. An increased focus on selling groceries may slow the slide of the company’s share price. Relentless competition from the online rival, though, is clearly taking a toll.
Tesco recovery starts with some gorilla tactics 14 Jan 2016 The UK retailer’s sales have bounced back to growth. The reason is that Tesco is cutting costs sharply, shoring up its dominant market share. It’s an essential part of a retail turnaround, but doesn’t immediately help the bigger goal of generating cash to reduce its indebtedness.
When UK retailers fight, shareholders lose 13 Jan 2016 Sainsbury, like rival Morrison, says sales are improving after years of declines. What’s really happening is that grocers scrabble for revenue at the expense of profit, while the whole market stays flat. The other signs investors care about are going in the wrong direction.
Retail real-estate spin looks like short-term fix 11 Jan 2016 A warm U.S. winter has wrought more distress on Macy’s and Kohl’s. Shares in the companies are down by double digits, lending activists a stronger hand for separating out property assets. Reversing consumers’ growing aversion to big department stores will prove more difficult.
M&S chief wears downside of pay for performance 7 Jan 2016 When Marc Bolland became CEO of UK retailer Marks & Spencer in 2010, his pay package looked generous. Yet the now-departing boss has earned much less than expected. Since M&S is far from out of the woods, it’s an unusual example of a remuneration committee doing its job.
M&S CEO leaves shop well placed for 20th century 7 Jan 2016 Marc Bolland’s six years running the $10.5 bln UK retailer has left its food business shining and troublesome non-food business more efficient, even if sales are weak. In the days when M&S’s competition was basically British, that might have excited investors. Not anymore.