Next’s best shopping days could be behind it 5 Jan 2016 Shares of Next have almost doubled since 2013 as the UK clothes shop has grown sales and refused to join the price-cutting game. Pre-Christmas sales rose just 0.4 pct, partly because of the warm winter. Yet things are set to get tougher for Next even if the weather returns to normal.
Luxury slowdown could delay Gucci revamp 4 Jan 2016 The Italian brand is heading into year eight of its makeover. With a sluggish China dragging down personal luxury sales growth to 2 percent, parent Kering has picked a difficult time to bring in new bosses. Resuscitating its most important label could take longer than expected.
Luxury groups could shrink their way to riches 30 Dec 2015 Labels like Prada and LVMH have spent a decade expanding like crazy to meet emerging market demand. Burberry has tripled its store base. It’s time to go the other way. While cutting back will be painful, it could spur higher luxury valuations. Hermes is one that has it right.
Short-seller attack on Casino ultimately healthy 18 Dec 2015 A withering critique of the French retailer’s book-keeping by a short-seller sent shares down by almost a fifth. Casino is riled. Muddy Waters’ approach raises ethical questions. But one way to see this conflict is as a beneficial kind of pessimism-tinged activism.
Greater China slowdown bedevils Prada 15 Dec 2015 Over nine months of 2015, U.S. and Middle Eastern sales slipped. But Greater China was the showstopper. Local currency retail sales tumbled 24 pct in the region. The $9 bln label’s chosen focus – it even listed in Hong Kong – is looking like the wrong economic and fashion choice.
Alibaba’s HK newspaper deal adds to mission creep 11 Dec 2015 The e-commerce giant’s purchase of South China Morning Post is an old headline with a new twist. Jack Ma follows in the footsteps of countless tycoons wielding influence through the press. The difference is that he’s forcing Alibaba’s public shareholders to lend him a hand.
Inditex is priced for perfection 10 Dec 2015 Shares in the Zara fashion retailer are up some 35 percent this year, against a 7 percent fall for rival H&M. Inditex’s nimble business model and strong double-digit earnings growth explains why. But currency fluctuations could slow its stellar trajectory.
Britain’s “Black Friday” better left on the shelf 27 Nov 2015 The Thanksgiving shopping orgy, recently adopted by the UK, is unhelpful for all concerned. Consumer credit is spiralling, confidence falling and retail margins are under pressure. If shoppers and retailers take a rational view of low prices, the festival will snuff itself out.
Petco needs grooming to please new masters 23 Nov 2015 CVC and a Canadian pension fund have won the auction for the No. 2 U.S. pet chain, paying $4.6 bln all-in. TPG and Leonard Green, which bought Petco for $1.8 bln in 2006, are set to exit with a 24 pct IRR. The new owners will need spruced-up growth to fetch anything near that.
Luxury overexpansion pads against country risk 17 Nov 2015 Labels like Gucci and Hermes tend to suffer after incidents like the Paris shootings because they rely on confidence and tourism. But years of runaway growth may leave luxury better positioned than before. Companies are now less exposed to any single region.
Alibaba Singles’ Day frenzy confuses growth debate 12 Nov 2015 The Chinese e-commerce group processed transactions worth a staggering $14.3 bln on Nov. 11, 60 pct more than last year. Yet the boost is unlikely to have much impact on annual volumes. One day of online discount shopping also provides few clues about Chinese consumption.
Darty-Fnac deal carries digital danger discount 6 Nov 2015 Books and music retailer Fnac has sweetened the terms of its bid for homewares rival Darty. Its 615 mln stg offer has board agreement too. The premium is still skinny when set against synergy estimates. That probably reflects the big threat from online rivals.
New look M&S has incomplete designs 4 Nov 2015 First-half results show the 8.5 bln stg UK retailer has done much to improve itself internally - non-food gross margin guidance was revised up, again. But Marks & Spencer needs to get the top line moving to deliver sustained returns. Fashioning external appeal is a harder task.
Singles’ Day spat shows Alibaba’s jealous side 4 Nov 2015 The Chinese e-commerce giant’s annual Nov. 11 shopping promotion has become a national festival. Now a smaller rival has accused Alibaba of bullying merchants into using only its platform. Market power may be good for driving sales, but not if it prompts regulators to weigh in.
Hong Kong shareholders strike fresh blow at GOME 29 Oct 2015 Investors prodded the Chinese electrical-goods retailer into paying a fifth less for a chain of sister stores. That’s a significant improvement, even if the $1.2 bln deal still hands too much power to jailed founder Huang Guangyu. The city’s institutions are having a good run.
Searching for China consumer bellwethers is futile 28 Oct 2015 Dubious about official data, investors are scouring corporate results for clues about shoppers’ confidence. Yet iPhone sales, e-commerce transactions and demand for fried chicken offer few clues. There are no consistently reliable proxies for the world’s second-largest economy.
Investors coax Walgreens Boots to swallow Rite Aid 27 Oct 2015 Scooping up the No. 3 U.S. drug chain strengthens $98 bln Walgreens as it battles domestic leader CVS. Antitrust is an obvious question given the rough ride Staples has faced with Office Depot, but the hurdles look manageable. Shareholders are certainly not worried.
Big cost cuts strengthen case for Fnac-Darty deal 26 Oct 2015 French retailer Fnac probably will have to improve its 800 mln euro offer to win its bid for homeware specialist Darty. The bidder’s estimate that the merged company will secure 85 mln euros of annual cost savings suggests a takeover is worth doing at a higher price.
Google and Amazon grapple happily with maturity 22 Oct 2015 Alphabet, the new holding company for the search giant, is returning cash to shareholders. Amazon delivered profits. Both operations are growing so fast, and throwing off so much cash, that they can act as responsible stewards of capital while still chasing the next big thing.
McDonald’s investors finally get goodies to savor 22 Oct 2015 The Big Mac purveyor reversed a stubborn sales slump in Q3. It’s too soon to declare CEO Steve Easterbrook’s turnaround a success, but the business is stabilizing as the fast food giant grapples with changing consumer tastes. Shareholders can enjoy their happiest meal in ages.