Monthly Archives: September 2012

Discount retailer B&M in line for sale

Simon, Bobby and Robin Arora bought B&M, a discount retailer, in 2005 when it was still a loss making business with less than 20 struggling stores. Seven years on, the company has £1bn of sales, 290 stores and 2m customers a week.

The brothers, led by ex-Barclays and 3i executive, Simon, have hired Rothschild to look at selling a significant stake in the company, which has grown both sales and profits at around 25pc a year, for the last four years.

A small selection of private equity investors, including CVC, have been invited for talks that could see them take majority ownership in the discount retailer. The deal is also likely to include a new, enlarged bank facility.

B&M has gone from being a forgotten regional discount chain to national powerhouse transforming Britain’s retail landscape, opening stores at a rate of one a week. It has a workforce of more than 10,000 and earnings before interest, tax, depreciation and amortisation is £90m for the most recent financial year, up 25pc on 2011.

The company is the latest value retailer attracting external investment interest as the market becomes polarised between luxury brands and budget stores.

Poundland, a much smaller rival, was sold in 2010 for a multiple of 9.7 times earnings, which in B&M’s case would translate into a £873m price-tag. The recent sale of Iceland to a consortium led by founder Malcolm Walker saw the supermarket change hands for £1.4bn as investors took advantage of one of the few areas of the retail economy benefiting from recession.

The Aroras have used the recession to their advantage, snapping up plum sites from struggling competitors, such as Woolworths, DIY Focus and Kwik Save, and turning them into new B&M outlets.


MidEast investors sink $406m into London project

MidEast investors sink $406m into London project

An artist’s impression of the Kings Reach project in London.

UK-based private equity real estate company CIT Group has secured £250m ($406m) from a consortium of Middle East investors to kickstart its 30-storey Kings Reach Tower scheme in London.

Work is now set to begin on the project, which includes 370,000 sq ft of offices, 72,000 sq ft of shops and 173 flats, CIT said in a statement.

It said the project funding came from a club of Middle East banks led by ABC International Bank and Saudi-based Mohamed Al Subeaei & Sons Investment Company (MASIC).

MASIC’s involvement as the largest financier to the scheme marks its entry into the UK market, the statement added.

CIT and its joint venture partner Jadwa Investment secured planning permission for the Kohn Pedersen Fox-designed scheme from Southwark council in October 2011.

The project, which will start on site this year, will see the existing Kings Reach Tower and adjacent podium extended and redeveloped.

CIT managing director of development, George Kyriacou, said: “This development represents a major step in the regeneration of the South Bank.

“We are delighted to have worked with funders from the Middle East to get this project to the point where we are ready to start on site.”

Jadwa managing director Ahmed Al-Khateeb added: “Acquiring Kings Reach Tower back in 2010 and developing the tower demonstrates our belief in the London real estate market and in the investment opportunity it represents to us.”

The joint venture partners will begin selling the flats next year and it is anticipated the project will be complete by the end of 2015.

CIT is a private equity real estate company which has invested £3bn in real estate markets globally.


Nike Drops Amid Slowing Demand From

Nike Inc. (NKE), the world’s largest sporting-goods company, declined after reporting future orders that trailed analysts’ estimates as demand sank in China.

Nike fell 1.1 percent to $94.91 at the close in New York. The Beaverton, Oregon-based company’s shares have fallen 1.5 percent this year.

– Nike the world’s largest sporting-goods company, reported future orders that trailed analysts’ estimates as demand dropped in China. Bloomberg’s Julie Hyman reports on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Chief Executive Officer Mark Parker has been discounting merchandise in China to clear inventory that wasn’t selling well, hurting demand for new products. Future orders from China, excluding currency fluctuations, declined 6 percent, trailing analysts’ average estimate for a 1.2 percent gain. Total orders for the Nike brand from September to January advanced 8 percent, trailing the 10 percent average estimate.

“The futures numbers are what’s most important, and when you’ve got a negative China number and deceleration in global future numbers, that’s what’s driving the stock down,” Camilo Lyon, an analyst for Canaccord Genuity Corp. in New York, said in an interview. The China orders “were worse than anyone expected.”

The economy in China “appears to be slowing, creating a short-term impact to any business operating there,” Charles Denson, president of the Nike brand, said yesterday on a conference call with analysts. He declined to say when results in China would improve.

Profit Drops

Net income in the quarter ended Aug. 31 declined 12 percent to $567 million, or $1.23 a share, from $645 million, or $1.36, a year earlier, the company said yesterday in a statement. Analysts projected $1.13 a share, the average of estimates compiled by Bloomberg. The profit drop was the second straight decline after nine straight quarterly gains.

Several companies have had to discount this year as demand declines in China. There is a significant glut of inventory in athletic apparel and footwear, said Lyon, who recently spent time in the region. A year ago, Nike’s orders for China rose 22 percent.

While total revenue rose 9.7 percent to $6.67 billion, which also topped analysts’ estimates, Nike’s profitability was hurt by higher costs for labor and materials. Gross margin, or the percentage of sales left after the cost of goods sold, narrowed 0.8 percentage point to 43.5 percent from a year earlier. That marked the seventh straight decline.

“There are some very real pressures in this world, and in this market, that even a company with the size and sophistication of Nike can’t avoid,” Lyon said before the results.

North America continued to be a bright spot for Nike as revenue in the region surged 23 percent to $2.71 billion. Orders rose 13 percent. Analysts projected 14 percent. That strength, especially in the U.S., has masked slowing growth overseas, Lyon said.


Tesco sets out its stall for Saudi debut in 19-store deal

Tesco has seen profits slump in its domestic market

Tesco, the world’s third biggest retailer, has sealed a deal to open 19 of its fashion stores in Saudi Arabia as it looks to boost its overseas profits amid declining retail sales in the UK.

The UK’s biggest retailer will debut its F&F stores in the kingdom under a franchise deal with local conglomerate Fawaz Abdulaziz Al Hokair & Co, which counts Zara, Marks & Spencer and Gap in its brand portfolio.

“The franchise model is a natural extension of the work we have been doing to turn F&F into a truly global fashion brand,” said Jason Tarry, chief executive of F&F International.

“We have in a very short time created a market-leading fashion brand in Central Europe, now worth over £400m. Now we have the opportunity to grow our brand further.”

The deal marks Tesco’s GCC debut, following on the heels of rival retailer Asda, which last year said it planned to launch its discount fashion brand George in a stores across the Middle East.

Tesco has been hit hard by the UK’s economic woes, posting one of its worst Christmas performances in years on Jan 12. The firm said its 2.3 percent decline in like-for-like sales in the six weeks to Jan 7 was below expectations and “disappointing”.

The grocer gets around two-thirds of its revenue from its domestic market but is looking to grow its business overseas. Tesco operates in 13 international markets, including Thailand and China, and has said it plans to focus on improving returns on capital in foreign markets.

The supermarket in December was forced to abandon plans to launch in India after the Asian state revoked its decision to open its retail market to foreign investors.

JP Grobbelaar, director of retail consultancy at property firm Colliers, said the extension of Tesco’s fashion brand in Saudi would offer a welcome boost to the UK chain.

“I believe Tesco entering into the Saudi market can only been seen as a very good thing, both for Tesco from an extension perspective and from a Saudi retail market perspective, in terms of the expansion of the number of brands,” he told Arabian Business.

“It’s good to have that extension and good to have that fresh blood in the market.”

Saudi Arabia, the wealthiest Arab state, sees retail accounts for more than 17 percent of its total GDP. The kingdom said last year it expected retail spending to top SR256bn ($68bn) by end-2011, making it more than twice the size of the UAE market.


Swatch CEO says record sales target will be a "fight

Swatch Group (UHR.VX) will have to work hard to achieve its goal of increasing sales this year to 8 billion Swiss francs ($8.50 billion) from last year’s record high of 7 billion, its chief executive told Reuters on Thursday.

Nick Hayek, chief executive of the world’s largest watchmaker, cited slowing growth in China and the euro zone crisis as the reasons for why hard work was needed.

“We still try to reach the 8 billion Swiss franc target, but we have to fight,” Hayek said on the sidelines of an event to mark the anniversary of Swatch brand Longines.

Shares in Swatch were down 2.2 percent at 373.6 francs by 1028 GMT, their lowest level since late July and underperforming a 0.1 percent rise in the Stoxx Europe 600 personal and household products sector index

Yet Kepler Capital Markets analyst Jon Cox said the sell-off might be hasty: “Hayek has been saying that they’re going to fight for this goal all year long. I don’t think there’s anything new, really.”

Famous for its colorful plastic watches and also owner of 18 other watch and jewelry brands including Omega, Longines, Brequet and Tissot, Swatch Group beat its sales goal last year.

The Asia-Pacific region, mainly driven by China, is the fastest-growing luxury market in the world, buoying watch and handbag makers as shoppers in Europe, the world’s biggest luxury market, reduce spending due to the economic crisis.

However, after figures showing China’s red-hot economic growth is cooling somewhat, signs are emerging of demand for ultra-pricey timepieces are diminishing.

“The market is nervous about luxury companies generally and any sign of a profit warning,” Cox also said.

Yet booming demand for mid-priced watches in China is more than offsetting a cooling at the top end of that market, Swatch said in July.


Karen Millen appoints retail directors for Europe and UK

British clothing brand Karen Millen has appointed Becky Bateman as retail director for the UK and Ireland and Pilar LaCave as retail director for Europe.

Bateman, who joins the company in January, will lead the Karen Millen brand in domestic markets, while LaCave will head the international business in Europe from November.

Prior to serving as retail director at clothing and accessories retailer Fat Face, Bateman held senior roles at Topshop, Topman and Laura Ashley. LaCave has previously worked for Diesel, Burberry, Inditex and Hugo Boss.

Gemma Metheringham, MD of Karen Millen, said: “With 100 stores across the UK, continuing to offer the best brand experience to our loyal domestic clients is as important to us as supporting the continued growth of our European business, where our store portfolio has increased by a third in the past two years to over 100 stores.”

The retailer, which has more than 350 stores and concessions globally, said the appointments will help drive the brand forward.


What are the prospects for these three giants of the retail world?

Retailers have had a hard time of it over the last few years, and many continue to struggle. In the UK, as elsewhere, many retail names have disappeared from the high street.

So, how are the world’s biggest and best coping, and what are their prospects for the future?

The big three

The US’s Wal-Mart Stores (NYSE: WMT.US), France’s Carrefour and the UK’s Tesco (LSE: TSCO) are the world’s top three publicly listed retail groups. The latest ‘Fortune 500’ list, which ranks companies by turnover, shows Wal-Mart to be the largest retailer — indeed, the third-largest company in the world. Carrefour ranks at 39 and Tesco at 59.

The companies have some similarities and some differences in the histories that have made them into retail giants.

Tesco is the smallest of the three, but has the longest history, its roots going back to 1919 when Jack Cohen began selling groceries from a market stall in London’s East End. The first Tesco store opened in 1929 and by 1947 Tesco had become a listed stock-market company. Tesco has grown to dominate the UK supermarket sector and today has its hands on around a third of the nation’s groceries shopping.

Tesco’s larger rivals, Wal-Mart and Carrefour, were founded more recently, in 1962 and 1958 respectively, but both have likewise grown to dominate their home markets.

Wal-Mart has the same ‘one-man-band’ origins as Tesco, though founder Sam Walton was a renegade franchisee rather than a market trader. Wal-Mart was listed on the New York stock exchange in 1972 and, unlike Tesco, remains a family-controlled business to this day.

In contrast to both its rivals, Carrefour was founded as a group enterprise. Marcel Fournier, Denis Defforey and Jacques Defforey were inspired by US retail guru Bernardo Trujillo to launch their first Carrefour store. Twelve years later, in 1970, the growing company was listed on the Paris stock exchange.

Dominators of their home markets, all three retailers have been expanding internationally over the past decade or two.

International expansion

The following table gives some numbers to show the current state of play with regard to the global reach of each of the retail giants.

Company Total revenue (£bn) Revenue from home market (£bn) Revenue from outside home market (£bn) Number of countries operating in
Wal-Mart 282 192 90 27
Carrefour 69 30 39 33
Tesco 65 44 21 13
Wal-Mart and Tesco are very similar in that around a third of their revenues are generated outside of their home markets, albeit in absolute terms Wal-Mart’s international revenue is more than four times that of Tesco. Wal-Mart has also penetrated more than double the number of international markets of Tesco.

Carrefour’s international profile is somewhat different. Not only does it operate in the largest number of international markets, but international sales also account for a whopping 57% of group revenues.

Looked at alongside Wal-Mart and Carrefour, Tesco is considerably less of a global company — indeed, its established international operations essentially amount to a small cluster of countries in Central Europe and a small cluster in South East Asia. Wal-Mart and Carrefour are both long established in South America, have made steps into Africa and are ahead of Tesco in that tough-to-crack but huge and potentially lucrative market of the future, China.


The three companies face many of the same challenges, including the China conundrum, the opportunities and pitfalls of the digital shopping age, and the need to manage expansionary capital investment carefully in the prevailing economic conditions. But they also face a number of company-specific challenges.

Wal-Mart, to be fair, is in pretty good shape considering many investors and industry observers a few years ago were predicting an interminable period of declining sales and earnings. Wal-Mart has continued to grow its sales and earnings — and its dividend — and maintained its operating margin at close to 6%. The shares have recently touched their previous all-time high – $75.24 around the turn of the millennium when the price-to-earnings (P/E) ratio was about 50!

Tesco had shown similar resilience, until it announced a profit warning in January. The company acknowledged that it had not only got its Christmas offer wrong, but that the performance reflected deeper-rooted problems within the UK business coming home to roost. Tesco is now intent on trying to get its core UK operation back on track, while at the same time trying to crack China and another extraordinarily tough market for outside retailers — the USA.

Tesco’s earnings growth is set to stall this year, the operating margin is forecast to drop to around 5.3% from its previous Wal-Mart-like level, and analysts predict only a modest increase in the dividend at best.

Carrefour has been trying to deal with its problems for a lot longer than Tesco, and has seen falling sales and declining margins over the past four years. The operating margin for the latest year was just 2.7% and the company decided to cut its dividend by more than half. Carrefour may be the most geographically diverse of the world’s top three retailers, but it is also the only one with significant exposure to Greece and the other desperately struggling economies of the Mediterranean. It hasn’t been doing too well in its home market, either. Carrefour appointed a new chief executive this year, who said his turnaround plan for the group would take at least three years to execute.

At the checkout

Which retail giant is the best value today? Here are the current-year forecast P/E and yield numbers:

Company Forecast P/E Forecast dividend yield (%)
Wal-Mart 15.3 2.2
Carrefour 12.6 3.0
Tesco 10.0 4.4
Wal-Mart has the highest P/E and the lowest yield, but we are talking about the king of retailers here. It may surprise you to know that Wal-Mart’s P/E has only been this low in a few years during the last quarter of a century.

Carrefour strikes me as expensive for a turnaround story that won’t turn around for some time, while Tesco looks a more attractive recovery prospect — even if my gut feeling is that things could get worse before they get better.

Legendary US investor Warren Buffett increased his stake in Wal-Mart earlier this year, but also added significantly to his holding in one of Wal-Mart’s two biggest rivals.

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Harley-Davidson eyes Libya, Iraq and Pakistan as part of MENA expansion

For the first six months of the year, Harley Davidson sold 132,991 motorcycles worldwide

Motorcycle maker Harley-Davidson is planning to boost its dealerships in the Middle East, with Abu Dhabi and Algeria showrooms set to open next month and Tunisia, Libya, Iraq and Pakistan also on its radar, the head of the company’s Middle East operations told Arabian Business.

Founded in 1903, the Milwaukee-based motorcycle maker entered the Middle East market in 1988 with its first dealership in Dubai and in the last 24 years has expended its presence to 14 different countries.

“The new showroom in Doha opened its doors just over a month ago, and the new Abu Dhabi and Algeria showrooms will open in October,” said Paul De Jongh, country manager for Harley Davidson Middle East and North Africa.

“We are busy investigating three more countries to add to the family… We are hoping markets like Tunisia, Libya, Iraq and Pakistan will be future markets that we could have presence in. We know we have got customers in those countries. We see them during rallies. We hear from them often, asking us [when we will be in their countries],” he added.

For the first six months of the year, Harley Davidson sold 132,991 motorcycles worldwide, of which 70 percent came from North America region (US and Canada).

“The rest came from outside the US, the region that we belong to, which is Europe, Middle East and Africa, contributing the most significant sales outside the US, with 27,977 motorcycles,” De Jongh said.

“So, 70 percent is from the US, and 90 percent of the remaining 30 percent is from Europe, Middle East and Africa,” he added.

During the 2008 and 2009 downturn, the US manufacturer was forced to undergo restructuring. Having ridden the worst of the downturn, second quarter sales this year were up 14.6 percent year-on-year to US$1.73bn, according to the Wall Street Journal. Overall, sales rose 2.8 percent, with sales in Europe, Middle East and Africa declining 6.4 percent.


Shoe retailer Schuh is to launch a new concept , targeted solely at children

Shoe retailer Schuh is to launch a new concept for the brand, targeted solely at children, at Braehead in Glasgow and Lakeside in Thurrock.

The two CSC centres are to be the UK’s first locations for Schuh Kids, a new concept children’s footwear spinoff to the company’s adult Schuh stores and the first expansion of the brand since its purchase by Genesco in June last year.

The standalone Schuh Kids stores are linked to existing Schuh stores but have their own entrance, staff and management team as well as a specific customer service focus on the junior customer base. The stores will stock carefully selected mini versions of Schuh’s adult ranges.

Schuh Kids will open its first store on 7 October at Braehead with a 6,500 sq ft twin store which will also comprise the first Schuh unit for the Scottish centre, located close to Next, Quiz and Dune. Schuh Kids will follow with the opening of the second store a week later at Lakeside. The 2,101 sq ft Lakeside store will open on the lower level mall close to House of Fraser, La Senza and Dorothy Perkins in a unit formerly occupied by fellow shoe retailer Linzi Shoes, which has upsized to a new 2,837 sq ft store.

Julian Wilkinson, asset management director for CSC, said: “Schuh Kids will be a great addition for both Braehead and Lakeside, and their arrival illustrates the confidence that our retailers have in the strength of our centres, not only as venues for expansion but also as first choice destinations when launching new concepts such as this.”

Lunson Mitchenall represented Lakeside and Braehead, where Colliers also acted as joint agent. Schuh Kids was represented by Jones Lang LaSalle at Lakeside and Eric Young & Co at Braehead. Linzi Shoes was advised by Brasier Freeth.


Esprit profit misses forecasts, shares dive amid gloomy outlook

Esprit Holdings Ltd posted second-half profit that missed analyst forecasts and said a slowing Chinese economy and lingering euro zone problems continue to pose risks to its business, briefly sending its shares more than 8 percent lower.

Esprit, which sells everything from bed sheets to jeans and generates three-quarters of its sales in Europe, has been trying to restructure its retail business as sales slow, but the company said on Wednesday that any further deterioration in the global economy would impact its transformation plan and ultimately its earnings.

The retailer in August hired Jose Manuel Martínez Gutiérrez, an executive from Zara owner Inditex, as its new chief executive in a bid to reassure investors about its restructuring drive following uncertainty created by a management reshuffle. Martínez took up his post on Wednesday.

“Investors are still in doubt over whether the transformation plan can be a success, given the company is still facing a lot of challenges and uncertainties,” said Steven Leung, a sales director at UOB Kay Hian. “They hope the new CEO can help speed up the process.”

Esprit, which competes with Swedish clothing retailer Hennes & Mauritz AB and Spain’s Inditex, posted a net profit of HK$318 million ($41 million) for its second half ended in June, compared with a HK$2.06 billion loss a year earlier, based on Reuters’ calculations. That missed an average forecast of HK$455 million according to a survey of 10 analysts by Reuters.

Martínez was until recently group director of distribution and operations at Inditex and news of his appointment last month had driven Esprit’s shares on Aug. 7 to their biggest one-day gain in 14 years.

One of the many challenges he faces is to boost Esprit’s retail presence and revive its brand at a time of economic uncertainty in Europe and a slowdown in China.


For the full fiscal year, Esprit reported a net profit of HK$873 million ($112.6 million), missing the average estimate of HK$1.01 billion in the poll of 10 analysts.

The result was higher than the HK$79 million profit posted a year earlier when the company took a one-time charge of HK$2.3 billion to set aside provisions for the closure of stores.

The overall closure costs were less than expected and the company was able to write back HK$696 million of those provisions in the latest term.

Turnover for the fiscal year fell to HK$30.17 billion from HK$33.77 billion a year earlier, due to the sale of its North American operations, store closures and a tough business climate, it said. Retail turnover declined 6.1 percent in local currency terms and wholesale turnover dropped 16.5 percent.

The company has earmarked HK$1.5 billion for capital expenditure for the coming year, of which HK$400 million will be invested in new store openings, HK$700 million in refurbishments of existing stores and HK$200 million for IT projects.

Inditex, the world’s largest clothing retailer, last week beat expectations with a 32 percent jump in first-half profit, boosted by rapid expansion in fast-growing emerging markets.

Esprit, which also competes with and U.S. group GAP Inc and Japan’s Fast Retailing Co Ltd, said last year that it would invest more than HK$18 billion ($2.3 billion) up to 2015 as part of its restructuring plan.

It also aims to double China sales to around HK$6 billion over the next few years and expand its points-of-sale network to 1,900 from 1,000.

Esprit, founded in 1968 in San Francisco by Susie and Doug Tompkins who started selling clothes out of the back of their station wagon, shut all its stores in North America as of the end of March.

The company has a market value of around $2.2 billion, down from roughly $8 billion at the end of 2010.

Shares of Esprit have surged about 29 percent so far in 2012, outpacing a more than 10 percent rise in Hong Kong’s benchmark Hang Seng Index. The stock closed down 6.9 percent on Wednesday, lagging a 0.8 percent fall in the benchmark index.


American Greetings reports quarterly loss

–Acquisition of U.K. retailer Clinton again oppresses bottom line

–Executives decline any discussion of going private proposal or future performance

–Shares tread water after 17% surge Wednesday

(Updates with details from conference call in paragraphs two through six)

American Greetings Corp. AM -0.15% swung to a fiscal second-quarter loss as the greeting-card maker continued to be bogged down by charges tied to its acquisition of Clinton Cards PLC.

The quarterly report comes two days after Chief Executive Zev Weiss, his brother, Chief Operating Officer Jeffrey Weiss, and certain members of his family offered to take the iconic card company private in a deal valuing it at roughly $581 million. The Weiss family, which through marriage traces itself back to the card maker’s founder, holds a majority control of shareholder voting power but to what extent the Weiss stake is backing the offer is unclear.

Investors hoping for clarity on the proposal amid the fiscal second quarter results were disappointed. The company broke from standard operating practice on its earnings call, which is usually led by Zev Weiss. He didn’t participate in discussion Friday, with Chief Financial Officer Stephen Smith alone provide commentary and answering questions. Mr. Smith also limited all his responses strictly to year-to-date results, declining to provide any insights into the company’s plans or expectations going forward.

Instead, Mr. Smith was left to discuss the second-quarter loss, which was complicated by effects from the $37 million takeover of the remaining assets of troubled U.K. retailer Clinton Cards.

The purchase moves American Greetings beyond card making into retailing as it aimed to protect its own credit position and inject much-needed capital stability into what it says is a leading brand with long-term potential.

However, effects of the acquisition and operation of Clinton stores reduced income by $18.7 million, or 37 cents a share, in the latest period. All told, American Greetings posted a loss of $4.25 million, or 13 cents a share, versus a profit of $14.5 million, or 35 cents a share, a year earlier. The latest results also included a six-cent gain on the sale of a part of a legacy minority investment.

Revenue rose 6.4% to $393.8 million. Clinton noted that revenue was reduced by about $4.4 million as a result of scan-based trading conversions that occurred during the quarter.

Expenses rose across the board, with material, labor and other production costs rising 12%; selling, distribution and marketing expenses up 18% and administrative and general expenses climbing 16%.

At the North American card segment, the largest contributor to the top line, revenue edged up 0.6% to $265.9 million. The international card segment’s revenue fell 1.4% to $74.8 million.

Shares were down 0.4% at $16.95 in recent trade. The stock remains up 15% for the week, after the going-private proposal stoked a 17% share gain Wednesday. Shares, however, have yet to touch the $17.18 offer price of that proposal.


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Starbucks Adds Stores in Scandinavia to Spur Europe Sales

Starbucks Corp. (SBUX) will open its first city-center stores in Sweden and Norway next year as the world’s largest coffee-shop operator works to boost sales in Europe.

Starbucks will partner with Norway’s Umoe Restaurant Group AS to open the stores and will increase its locations in airports and train stations, the companies said in a statement yesterday. The number of stores to be opened wasn’t disclosed.

The coffee-shop chain has struggled to boost sales in Europe, a region Chief Financial Officer Troy Alstead said in July was “extremely challenging.” Sales at stores open at least 13 months in Europe, the Middle East and Africa were unchanged in the quarter ended July 1, and Seattle-based Starbucks may begin closing some unprofitable locations in the current quarter, Alstead said at the time.

Chief Executive Officer Howard Schultz has sought to turn around the company’s European business with television advertisements and new drink recipes in order to promote demand as governments impose austerity programs on a weakening economy.

Starbucks fell 0.8 percent to $50.10 yesterday in New York. The shares have gained 8.9 percent this year.


Michael Kors luxury beats US economy's blahs

Since his Wall Street debut in December, upscale US fashion designer Michael Kors has seen profits soar and share value almost triple, proof of the luxury sector’s resilience amid a torpid economy.

The eponymous ready-to-wear brand, launched in 1981 and divided since 2004 into several lines, from the luxury “Michael Kors” to the more accessible “MICHAEL” and “KORS” labels, has found firm footing on both the New York Stock Exchange and the catwalks.

His 2013 spring collection was a hit at New York’s Fashion Week in early September. Kors’s confidently rich yet casual designs echoed Yves Saint Laurent’s 1960s Mondrian-inspired dresses in a collection filled with bold reds and yellows and clever accessories.

The nation’s style-setters have voted clearly in favor, from celebrity Kim Kardashian, clad in a white and gold Michael Kors swimsuit in photos that have gone viral on social networks, to First Lady Michelle Obama, who wore his one-sleeved black evening gown at a gala in Washington on Saturday.

The enthusiasm appears contagious. The company, Michael Kors Holdings Ltd., more than doubled its profit in the fiscal 2011 ended in March compared with a year earlier, to $126.1 million on sales that were up a robust 62 percent at $1.3 billion.

On the NYSE, shares under the ticker symbol KORS have soared since the initial public offering in December, rising from $20 to more than $54 at Monday’s close.

But that success led a group of shareholders to announce Tuesday their plan to sell 23 million shares at $53 each, and the shares dived 4.04 percent Tuesday amid an overall market sell-off, to $52.30.

The market capitalization of the company, which sits at the top end of the ready-to-wear apparel and accessories perch carved out by fellow American designer Ralph Lauren, is valued at about $10.35 billion.

“We continue to be thoroughly impressed by the topline gains and brand momentum KORS displays,” said Randal Konik, an equity analyst at Jefferies.

“Clearly the company is doing a great job gaining market share even in a choppy macro environment, and turning a healthy profit on these sales,” the analyst said.

One of the company’s strengths, analysts say, is its focused positioning in accessories — bags, jewelry, watches, sunglasses, footwear — which account for about 75 percent of sales, a number the company is hoping to grow to between 80 percent and 85 percent.

Keeping the strategy on accessories rather than clothing makes sense, said Oliver Chen at Citi.

“We believe accessory companies will continue to have stronger global prospects and more attractive competitive moats,” Chen said.

Christopher Low at FTN Financial said that luxury companies have held their own despite the deep 2008-2009 recession and the sluggish recovery.

“Even for most of the recession, the luxury retailers did fairly well,” Low said, pointing to demand for French brands Louis Vuitton and Hermes and, in the US, upscale retailers Saks Fifth Avenue and Tiffany.

Michael Kors Holdings claims a presence in 74 countries, with 191 sales points in North America and 46 elsewhere, particularly in Europe and Japan.

“We like the long-term story here with Kors’s accessible luxury brand positioning, early-stage growth profile and significant international expansion,” said Citi’s Prune Perromat


Sports Direct thrashes out deal to buy 60 JJB Sports stores

JJB is the latest high-profile retail failure in recession-hit Britain. Photograph: David Moir/Reuters
Sports Direct is thrashing out the final details of a deal that will see it acquire 60 stores belonging to collapsed rival JJB Sports.

The £30m deal will save more than 1,000 jobs at the Wigan-based chain but has taken longer than expected to complete due to competition concerns arising from Sports Direct’s dominant position in the UK sportswear market.

JJB put itself up for sale last month after shareholders refused to pump more money into the stricken retailer, and the looming break-up is expected to involve a pre-pack administration and the closure of a number of its 180 stores. The retailer has 4,000 employees.

Sports Direct, controlled by Newcastle United FC owner Mike Ashley, is understood to be keen to obtain all 60 stores but wants to avoid being forced to sell them by the competition watchdog at a later date.

To get round that it is expected to take 20 JJB stores immediately, and hold the balance of 40 stores until their purchase has been considered by the Office of Fair Trading. Both Sports Direct and KPMG declined to comment.

JJB is the latest retail failure in recession-hit Britain after Blacks Leisure and discount fashion chain Peacocks went into administration this year. Shareholders are not expected to get payouts on the back of the deal, as shares were worth less than a penny when they were suspended.


Retail Industry Awards 2012 winners

Retail Industry Awards 2012 winners

Sainsbury’s scooped five awards at last night’s Retail Industry Awards 2012, held at London’s five-star Grosvenor House hotel on Park Lane.

The retailer took the Supermarket of the Year title for the second year in a row, along with awards for Fresh Flower Supermarket of the Year, Multiple Drinks Retailer of the Year, Most Sustainable Retailer of the Year and Convenience Retailer of the Year (multiple chain) for its Sainsbury’s Local stores.

Among the categories for independently-owned stores, Budgens was named Symbol/Fascia Group of the Year for the first time, while Mo’s Convenience Store, Premier, Glasgow, won the award for best independent store under 1,000sq ft.

See below for the full list of winners from last night.

Supermarket of the Year
supported by JTI

WINNER: Sainsbury’s

Symbol/Fascia Group of the Year
sponsored by Mars Chocolate UK

WINNER: Budgens

Independent Retailer of the Year
sponsored by Kraft Foods

WINNER: Up to 1,000sq ft: Mo’s Convenience Store, Premier, Glasgow

WINNER: Between 1,001sq ft and 2,999sq ft: Fraser’s Budgens of Yarnton, Oxfordshire

WINNER: 3,000sq ft and over: Crawfords, Maghera, County Londonderry

Convenience Retailer of the Year
sponsored by Dairy Crest

WINNER: National Chain: Sainsbury’s Local
HIGHLY COMMENDED: Waitrose convenience

WINNER: Regional Chain: North East Convenience Stores
HIGHLY COMMENDED: The Southern Co-operative

WINNER: Multiple Convenience Store: Spar Brackenvale, Henderson Retail, Carryduff, County Antrim

Forecourt Retailer of the Year

WINNER: Independent: Spar Saintfield Road, Lisburn, County Antrim
HIGHLY COMMENDED: Red Tiles Service Station, Mace, Witton Gilbert, County Durham

WINNER: Company-owned: Spar Glenwell, Henderson Retail, Newtownabbey, Belfast
HIGHLY COMMENDED: Spar Castlerock Road, Coleraine, County Londonderry

Community Retailer of the Year
sponsored by P&G

WINNER: Independent: Londis Hemingbrough, Selby, Yorkshire
HIGHLY COMMENDED: Mo’s Convenience Store, Premier, Blantyre, Glasgow

WINNER: Company-owned: Spar Elton, Blakemore Retail, Elton, Cheshire
HIGHLY COMMENDED: Spar Castlerock Road, Coleraine, County Londonderry

Most Sustainable Retailer of the Year
sponsored by PepsiCo

WINNER: Multiple: Sainsbury’s
HIGHLY COMMENDED: The Co-operative Group

WINNER: Individual store: James Graven, Spar, Littleport, Cambridgeshire
HIGHLY COMMENDED: Thornton’s Budgens, London

Drinks Retailer of the Year
sponsored by HEINEKEN

WINNER: Multiple: Sainsbury’s

WINNER: Independent: Warner’s Budgens, Moreton-in-Marsh, Gloucestershire
HIGHLY COMMENDED: Spar Seasalter, near Whitstable, Kent

WINNER: Independent beer and cider retailer: Warner’s Budgens, Moreton-in-Marsh, Gloucestershire

WINNER: Multiple beer and cider retailer: Waitrose

Most Improved Store
sponsored by Booker

WINNER: McGirr’s Spar Omagh, County Tyrone
HIGHLY COMMENDED: Sherston Post Office Stores, Sherston, Wiltshire
HIGHLY COMMENDED: Spar Seasalter, near Whitstable, Kent

WINNER: Tobacco Opportunity Award: Budgens of Islington

Independent Newsagent of the Year
sponsored by Parfetts

WINNER: Palatine News, Northenden, Manchester

Discount Retailer of the Year
sponsored by Packaging News


Store Manager of the Year
sponsored by Kerry Foods

WINNER: Independent: Nick Davey, Knight’s Budgens of Hassocks, West Sussex

WINNER: Multiple: Chris Walters, Spar Lampeter, Blakemore Retail, Ceredigion

Independent Sales Assistant of the Year
sponsored by Loco

WINNER: Becky Chilvers, Londis Hemingbrough, Selby, Yorkshire
HIGHLY COMMENDED: Janice Boe, Spar Saintfield Road, Lisburn, County Antrim

Fresh Flower Supermarket of the Year

WINNER: Sainsbury’s

Fresh Produce Retailer of the Year
sponsored by Dole Fresh UK

WINNER: Multiple: Asda

WINNER: Company-owned: Budgens
COMMENDED: AF Blakemore & Son

WINNER: Independent: Crawfords, Maghera, County Londonderry
HIGHLY COMMENDED: Thornton’s Budgens, Belsize Park, London

Seafood Retailer of the Year
sponsored by Alaska Seafood

WINNER: Morrisons


H&M delays US online launch as profits disappoint

H&M had planned to launch its online shop this autumn, but said it needed more time to “adapt” for the US market.

The Stockholm-based group reported flat pre-tax profits of 4.9bn crowns (£460m) in H&M’s third quarter, which runs from June to August, blaming bad weather conditions and a tough economic climate. Analysts had forecast profits of 5.37 billion crowns.

Karl-Johan Persson, the H&M chief executive, said: “Conditions in the fashion retail industry continued to be challenging in many markets – both as regards the weather and the macro-economic climate.”

Althought he saw “significant opportunities for continued growth both in stores and online”.

H&M, the world’s second largest fashion retailer after Inditex, said the quarter began with strong sales but said an extreme heat wave in August kept shoppers away.

Total sales for the month up to September 25 increased by 14pc in local currencies compared to last year, in a positive rebound for the company.

Lower cotton prices, which analysts expected to boost profitability, had a “neutral to positive” effect on purchasing costs compared to the previous year, H&M said.

The company is pushing ahead with store expansion plans and said it will add 300 new stores to its 2,600-strong chain this year, up from 275 previously planned.

H&M is also rolling out a new brand, & Other Stories, in spring 2013, which will offer more expensive women’s fashion.


Three UK retail partners for Barnes & Noble

World’s largest bookseller Barnes & Noble(B&N) have signed partnership deals with Dixons Retail, which owns PC World and Currys; Sainsbury’s and Waitrose, three leading UK retailers. The move is a definite step in consolidating its presence in the UK.

The UK retailers will now display and sell Barnes & Noble books. They will also offer Nook services to their customers, with Nook Simple Touch and Nook Simple Touch GlowLight becoming available in 2000 stores from October.

However, B&N has not disclosed its Nook tablet retail plans as of yet. The publishers also announced that they will move into video content category with partnerships with HBO, Sony, Starz, Warner Bros Entertainment and Walt Disney Studios. B&N also says that it will soon launch a Nook portal for UK at

Currys and PC World will feature Barnes & Noble’s NOOK products in over 600 stores across the country and online (at and will bring NOOK to selected branches in the UK.

Sainsbury’s New Technology Buyer, Lindsay Evans commented: “We aim to offer our customers new and exciting products. The NOOK provides avid readers with a portable, easy way to consume literature. General merchandise represents a significant part of our business’ growth and it was critically important to us we found a device partner who understands the specific needs of our customers. The NOOK’s high quality and intuitive features make it perfect for the whole family to enjoy.”


Dubai plans Middle East's first crocodile park

Dubai is planning to establish a crocodile park in the emirate as its latest tourism attraction, officials said on Tuesday.

The Dubai Municipality said the crocodile park would be set up “in the near future”, adding that it was studying similar parks in France, Tunisia and Belgium.

Abdulla Rafia, assistant director general of Dubai Municipality said the civic body has assigned a team from the investment section of Asset Management Department to study best practices around the world.

In comments published by news agency WAM, he added: “The Municipality seeks to build a new world tourist attraction in the emirate of Dubai through the partnership with the foreign investors to establish the crocodile park project in the event of positive results of the study.”

Khalifa Abdullah Hareb, director of Assets Management Department, said the proposed project would be the first of its kind in the Middle East.

He added that it would not only be an amusement park but also an educational destination.

In May, Dubai launched plans to build a safari park-style facility to replace the emirate’s ageing zoo.

Hussain Nassir Lootah, director general of Dubai Municipality, said that the Dubai Safari Project, which will be located in Al Warqa 5 in Aweer Road, would cover 400 hectares and include a safari park, butterfly park, golf courses, and entertainment and recreational areas.

Dubai Safari, which will cover 60 hectares of the total area, is aimed at “establishing the best centre for wildlife in the world”, Lootah said.

Hundreds of animals, birds and other creatures living in enclosures in the existing facility in Jumeirah will be relocated to the new safari park.


Alshaya to bring new restaurant brand to Gulf

Kuwaiti retail giant M H Alshaya has agreed a partnership with a top US hospitality firm to bring a new restaurant brand to the region.

Katsuya by Starck, which serves Japanese cuisines across eight outlets in the US, will open two locations in Kuwait and Dubai next year. The brand, managed by Los Angeles based SBE, has plans to develop up to seventeen restaurants across the Middle East by 2017.

“The cuisine, service and design of Katsuya by Starck restaurants combine to create an exciting dining destination that we believe will have strong appeal in this region,” said MH Alshaya executive chairman Mohammed Alshaya, in a press statement.

“We are delighted to partner with SBE to deliver the international expansion of this innovative dining experience which supports our goal of introducing outstanding new Food concepts to consumers in the Middle East.”

Katsuya by Starck is the latest in a series of American franchises to enter the fast-growing restaurant market in the Gulf.

In August, the Cheesecake Factory, which is also operating in partnership with M H Alshaya, opened its first restaurant outside the US in Dubai.

Another chain, IHOP, also made its Gulf debut in Dubai this year.

Alshaya operates 2,000 stores across 19 countries, and counts brands such as Starbucks, Pizza Express, American Eagle, Boots and Pottery Barn in its portfolio.


Largest Jashanmal luxury home store opens at Dubai Mall

Dubai: Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and Chief Executive of Emirates Airline Group, on Monday inaugurated Jashanmal’ s largest luxury home store at The Dubai Mall .

Covering over 15,000 square feet, the new luxury home store is located on Level 1 of the Star Atrium at The Dubai Mall offering its customers world-class products and luxury goods from around the world.

Tony Jashanmal, Group Executive Director, hosted the evening as he introduced guests to the innovative new store and let them experience Jashanmal’s newest and largest luxury home store in an interactive and entertaining way. Shaikh Ahmad later toured the store along with Tony Jashanmal and other invited guests.

Every guest at the event was given a branded passport, opening up different areas of the store where they received special stamps while getting expert cooking tips from the well-known Celebrity Chef Osama, the chance to “test drive” the store’s wide range of coffee machines, help in making “couture” cakes while enjoying live art models and displays that brought the store’s luxurious product range to life.
Commenting at the launch event, Tony Jashanmal, said: “We are thankful to have the support and presence of Shaikh Ahmad Bin Saeed Al Maktoum as we mark the inauguration of our largest ever luxury home store here at The Dubai Mall . This is the latest in our new luxury concept stores and we wanted to ensure that our guests could experience the excellent range of products we have to offer.”

“Entering one of our home stores is like entering a world of luxury which is why we gave our guests branded passports allowing them to experience at first hand our products such as the Lenox tableware (favoured by the US Presidents) to luxury luggage, kitchen appliances and the world’s finest porcelain.”
The new store is the Jashanmal flagship home store in the UAE and the company says that customers are already responding positively to the new look, style and layout of the store.

The Jashanmal home store features a wide range of products categories such as dinnerware, cookware, bed and bath accessories, home appliances and luggage. Some of the prominent brands available at the department store are Lenox tableware, Dankotuwa – the world’s finest porcelain, Rimowa — the luggage luxury brand from Europe, Victorinox —the leader in Swiss army knives, Berghoff — unique kitchen and table ware, Bugatti — known for luxurious and elegant home products, Delsey — light and secure luggage, as well as Kenwood and Delonghi kitchen appliances.


Louis Vuitton Risks Logo Fatigue as Chinese Tastes Mature

Luxury-goods makers early into China have long counted on consumers there to snap up $1,000 handbags and other pricey — and profitable — wares. Now, Chinese tastes are changing in ways that may hurt the brands that expanded most aggressively in the country.

As more Louis Vuitton (MC) bags, Gucci wallets, and Omega watches flood cities like Beijing and Shanghai, consumers are eschewing readily available logoed products in favor of more distinctive alternatives.

Enlarge image
Vuitton’s Popularity Threatens Growth as Chinese Tastes Mature

Dale de la Rey/Bloomberg

A woman walks past a LVMH Moet Hennessy Louis Vuitton retail store in the Causeway Bay area in Hong Kong, China.

A woman walks past a LVMH Moet Hennessy Louis Vuitton retail store in the Causeway Bay area in Hong Kong, China. Photographer: Dale de la Rey/Bloomberg

“As the luxury industry matures, the Chinese are becoming much more sophisticated about the products that they buy,” said Fflur Roberts, global head of luxury goods research at Euromonitor in London. “It’s not just about the bling aspect.”

The shift to less conspicuous and often more expensive goods, which happened in Europe and the U.S. after the 2008 collapse of Lehman Brothers Holdings Inc., may dent growth at Vuitton and Gucci, which until recently sold more than half the luxury handbags in the world’s second-largest economy, HSBC estimates.

Same-store sales at niche luxury brands such as Bottega Veneta and Yves Saint Laurent, owned by Paris-based PPR SA, are set to increase almost three times this year’s industry average even as weakening economic growth takes its toll on demand, according to HSBC. Cheaper bagmakers such as New York-based Coach Inc. (COH) may also benefit as increasingly demanding consumers seek value for money, the brokerage predicts.

Still Spending

“Consumers are still spending in China but they’re spending differently,” said Uché Okonkwo, executive director of Paris consultant Luxe Corp. As Chinese shoppers become better informed about trends, “luxury companies have to work harder to sell to them than they did five years ago. It’s a question of balance.”

China’s gross domestic product expanded 7.6 percent in the second quarter from a year earlier, the smallest gain in three years and the sixth quarterly slowdown. China is the world’s fifth-biggest luxury market, accounting for 92 billion yuan ($14.6 billion) of sales in 2011, according to Euromonitor.

Moving Upscale

Vuitton, PPR-owned Gucci (PP) and Burberry Group Plc (BRBY) have responded partly by shifting prices higher and introducing more exotic products such as Gucci’s $4,100 python shoulder bag and Burberry’s 6,000 pound ($9,700) alligator clutch to nudge their image upscale.

Recent sales reports suggest the strategy isn’t working. Burberry said same-store sales have fallen since the end of August, adding that Chinese tourists may be spending less on its trenchcoats and other products on visits to Europe.

“We were the first to report a slowdown but we won’t be the last,” Chief Executive Officer Angela Ahrendts said Sept. 17 after the British luxury goods maker’s 2013 spring/summer fashion show in London.

At Gucci’s Sept. 19 fashion show in Milan, CEO Patrizio Di Marco declined to comment on the company’s performance. PPR reports third-quarter sales on Oct. 25. A spokesman for LVMH, which also reports quarterly sales next month, declined to comment on Vuitton sales. Chinese shoppers may account for more than 25 percent of global luxury sales, HSBC estimates.

Logo Fatigue

Luxury sales have slowed in China as more consumers there travel abroad and see that designer clothes and accessories can cost half as much in European and American stores as they do at home. And Ahrendts noted that the once-a-decade leadership change in China has slowed sales for luxury brands as many people hold back on gifts to public officials until it’s clear who will retain power.

Prada (1913), which uses more leather in its bag collections than Vuitton and relies less on logos to differentiate its products, may benefit as consumers seek alternatives to Vuitton and others, according to HSBC. The Milan-based company said yesterday that same-store sales haven’t slowed in the last two months even as market conditions worsen.

Vuitton, Omega, and other “megabrands may start to show signs of suffering brand weariness owing to their early entry into several markets,” wrote Erwan Rambourg, an analyst at HSBC. “We term this the ‘first-mover disadvantage’.”

LVMH shares were down 0.8 percent at 121.85 euros as of 11:22 a.m. in Paris trading, the third-biggest decliner on the CAC 40 Index. PPR fell 0.3 percent in Paris to 121.65 euros, while Burberry declined 0.4 percent in London. Hermes International SCA (RMS) gained 0.3 percent.


Vuitton has 39 boutiques in China, while Gucci has 54 and Burberry has 66. Hermes, which last month raised its 2012 sales- growth target after first-half earnings beat estimates on Asian demand, has 21 outlets in the country. Prada has about 20.

The so-called absolute luxury segment — the priciest goods — where Hermes competes, is the fastest-growing part of the market and will keep outperforming the rest until at least 2014, Bain & Co. predicts.

Being too accessible can lead to “banalization,” Hermes CEO Patrick Thomas warned Aug. 31 as the maker of silk scarves and Birkin bags reported a 25 percent increase in first-half sales in Asia. The Paris company, which doesn’t anticipate a slowdown in second-half sales in China, plans to protect its image by limiting store expansion, opening at most 20 shops worldwide in the next five years, he said.

More Cautious

Burberry’s surprise warning made some analysts more cautious about LVMH. Eva Quiroga of UBS downgraded the company to neutral and cut her estimate for second-half sales growth at its fashion and leather-goods unit. Revenue at the division, LVMH’s largest and most profitable business, will climb 5 percent to 6 percent in the period, slowing from 10 percent in the first six months of 2012, Quiroga estimates. LVMH’s total revenue should rise 8.5 percent in 2012, Quiroga says, trailing the European luxury goods sector’s average 9.2 percent growth.

Hermes, Cie. Financiere Richemont SA (CFR), and PPR’s luxury division will fare better, rising between 12 percent and 13 percent, even as the latter’s Gucci brand continues to soften, Quiroga predicts. Prada expects sales to rise 15 percent.

“The beauty of luxury goods is they’re scarce and therefore they’re reassuringly expensive,” said Rahul Sharma, founder and managing director of Neev Capital. “You don’t just want something that’s expensive that’s not scarce.”


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Survey says NI has the worst shop vacancy rate in the UK

Almost one in five shops are vacant in the North, according to a new study.

New research published by commercial property agency Lisney, says the percentage of vacant shops in Northern Ireland has increased on 2011 to 19%, far ahead of 11% in the Republic and the UK average 11.4%.

The study found that’unprecedented levels of retail administration and resulting store closures have had a major effect on this year’s figures’.

Another issue highlighted included the high level of business rates in prime locations, which ‘remains a major issue for retailers’.

Great Victoria -treet, Belfast. Belfast has an overall shop vacancy rate of 23.1%

Breakdown of towns

The study found that Belfast has ‘fared the worst’, with an overall vacancy rate of 23.1%, meaning that ‘almost one in four shops in Belfast is now vacant’.

Vacancy rates in Newry, County Down and Coleraine, County Derry have doubled in the year, from 9.7% to 20% and 11.2% to 21.2% respectively

Lisney’s research also found that Craigavon, County Armagh remains the town/city with the lowest vacancy rate, but its rate has ‘risen substantially from 3.6% to 9.1% in the year’.

The study also looked at office space and found that in Belfast, it is ‘declining further from an already low level’.

Headline rents in Belfast remain at £12 per sq ft, which ‘compares very favourably with other cities in the UK and Ireland’.

According to Lisney, the research indicates that take-up of space in Dublin is over ‘six times that of Belfast’ and occupiers intimate that they are opting for Dublin because of its more ‘competitive corporation tax rate’.

Lisney Managing Director, Declan Flynn said that in retail, business rates remain a ‘major issue’ because there is currently no link between rent paid by retailers and income generated by the retailer, a situation which Mr. Flynn calls ‘unsustainable’.

Possible Solutions

“We still haven’t seen a decision on a reduction in corporation tax. Designating Northern Ireland as an Enterprise Zone is another potential option to boost the economy and help make us more competitive.

“In the areas of GB in which Enterprise Zones exist, they provide a streamlined planning system, tax incentives and business rates relief,” Mr. Flynn added.

“What is clear is that if nothing is done, the issues identified in this research will become even more acute, and Northern Ireland will continue to lose major potential occupiers to the Republic of Ireland other locations,” he concluded.

The Northern Ireland Independent Retail Trade Association described the fact that Northern Ireland has nearly double the UK National average in relation to shop vacancies as ‘disturbing’.

NIIRTA Chief Executive Glyn Roberts said that the survey is another ‘wake up call’ that ‘urgent and joined up action’ needs to be taken by the Executive to reverse the decline in the town centres.

“Northern Ireland has not just the worst shop vacancy rate in the UK, but is now approaching double the UK national average,” said Mr. Roberts.

“The survey paints a stark picture and we believe that we are approaching a trend of one in three shops being empty by this time next year. This figure is sadly highlighted by the bad news of JJB Sports entering into administration”

The Northern Ireland Independent Retail Trade Association’s 50 point plan

The Northern Ireland Independent Retail Trade Association had put forward a fifty point plan, said Mr. Roberts, to address the problem.

“Solutions such as Planning Policy which supports Town Centres, action to freeze car parking charges, extending the Small Business Rate Relief Scheme and bring forward proposals to establish local Enterprise Zones should be the top priority for the Executive,” concluded NIIRTA’s Chief Executive.

Vacancy Rates in Republic

In August, a study by GeoDirectory found that the number of vacant commercial buildings in the Republic stood at 11 per cent.

Dublin had the largest number of vacant units with 5,851 currently not being used, equivalent to a 12 per cent vacancy rate for the capital.

A total of 8 counties – Carlow, Donegal, Dublin, Galway, Leitrim, Mayo, Roscommon and Sligo – recorded commercial vacancy rates above the national average of 11 per cent.

The research showed that Galway had the largest number of commercial premises vacant for a city at 818, 13 per cent of total stock.

Sammy Wilson: Not Just a Rates Issue

Speaking to the BBC on Tuesday, when Lisney’s research was released, Stormont Finance Sammy Wilson said that the problem of retail vacancy was ‘not just a rates issue’.

He said the more people were shopping online and traders had to do their part in ‘increasing footfall’.

He mentioned Ballymena, County Antrim have one Thursday in November of discounts.

Case Study: Ballymena

Ballymena is a case in point. With huge retail parks outside the town centre with Tesco, Sainbury’s, Curry’s, B&Q offering free parking, the town itself has died dramatically.

Ballymena was famous for its outside markets, haberdashery shops, family-owned department stores, hardware shops, greengrocers and drapers. With the exception of a few, most are long since gone.


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Anger as Doha mall reopens after fire tragedy

Family and friends farewell triplets Lillie, Willsher and Jackson Weekes at the Wellington Cathedral of St Paul on June 8, 2012 in Wellington, New Zealand. (Getty Images)

The Villaggio mall in Doha has partially reopened after a 115-day closure following a blaze which left 19 people dead.

The section of the shopping mall that housed the Gympanzee Nursery where 13 children, four teachers and two firefighters died, remains closed.

But the reopening of the likes of Cineco Cinemas, Carrefour, Virgin Megastore, the food court, restaurants, Gondolania Theme Park, and a majority of the outlets in Villaggio has angered relatives of the victims of the fire.

Two-year-old New Zealand triplets Lillie, Willsher and Jackson Weekes were among the 19 killed when the fire broke out in the mall on May 28.

Their parents Martin and Jane Weekes said in a statement published by newspapers in New Zealand: “Whilst we understand that this day had to come, we are angry that not one representative from Villagio or the Government has had the respect to contact us in advance to explain this decision.

“We are angered that Villagio has not even had the courtesy to invite us to grieve for our children in private at the location they died. The owners and the management should be ashamed.”

They added: “Villagio is reopening before the owners of the mall and Gympanzee have even been before the Qatari Courts… Whilst we accept the right of Villagio to reopen we also assert our rights as the families of the victims of this crime. Those individuals and entities responsible must face justice.”


Hamleys set to open in Cardiff for Christmas

Toy retail giant Hamleys is to open its first Welsh store at St David’s

Following its acquisition by the French Ludendum Group, Hamleys has announced plans to open a flagship store in Wales, its fourth full-range store after London, Glasgow and Dublin.

The new store, which is almost 13,000 sq ft in size and will be company owned, will be located on the ground floor of the St David’scentre adjacent to Clas Ohlson and Game. It will include ideas and concepts unique to the Cardiff store and is due to open in November.

Joanne Skilton, director of retail and leasing for CSC, on behalf of the St David’s Partnership which runs the centre, said: “Hamleys is a children’s toy paradise that is as much an experience as it is a retail offer. This will be a huge draw for families who can combine their shopping with a ‘treat’ for the children by way of a visit to Hamleys. Many families will come to St David’s just to visit Hamleys, making the brand a footfall driver for families in its own right.”


Kiddicare eyes growth as opens first stores

A new era for Kiddicare and Morrisons will begin this week when internet-focused Kiddicare opens the first of ten new superstores on Wednesday.

The new store in Nottingham is part of a drive by grocery chain Morrisons to establish Kiddicare as the biggest baby retailer in Britain.

It paid £70m to buy Kiddicare last year – its first significant move into ecommerce – and then snapped up ten empty Best Buy stores earlier this year after the US retailer scrapped its attempt to break into the UK market.

Apart from a single store in Peterborough next to its headquarters, at the moment Kiddicare sells its buggies, high chairs and clothing over the internet.

However, Morrisons boss Dalton Philips believes shoppers want to try baby equipment before they buy and therefore is seeking to expand Kiddicare’s footprint nationwide.

Two more stores will open before the end of the year, with the rest in 2013.

Scott Weavers Wright, chief executive of Kiddicare, said: “This is huge for us. We are a £55m to £60m business today. I am expecting to double business within 12 months. I am looking for £200m within three to four years.”

Mr Weavers Wright said he was taking a “multi-channel attitude” to the profitability of stores, meaning that he expects many consumer to buy goods online after visiting stores and therefore will judge stores on their service, not their sales.

“They will stand on their own two feet, the business will be modelled and need a return. But I am not particularly fussed about individual stores. We will rates stores not on sales, but on service,” he said.

Nonetheless, Mr Weavers Wright expects Kiddicare to be profitable within 12 to 18 months.

“The business model is secure and solid. We will push forward,” he said. “For a first-time mum it’s all about touch and feel. We are not frightened of Best Buy’s problems – Amazon came in and undercut their prices. Mum wants expertise guidance – that’s what we provide.”


Foreign retailers rush into SA

Johannesburg – South African retailers will have to pull up their socks to compete with the international retailers streaming into shopping centres.

With European retail markets looking less attractive because of the financial crisis, emerging markets’ retail sectors are in the sights of foreign retailers who want to expand their turnover and improve sales.

These retailers will compete directly, which means that local retailers will have to be innovative to protect their market share.

Global retailers who have already spread their wings into South Africa have meanwhile been surprised by the healthy trade density (turnover per square metre) that their stores achieve here. In most cases this leads to aggressive expansion plans.

Australian fashion retailer Cotton On’s top global store is its huge 1 000m² concept store in Johannesburg’s Sandton City. Over the past year Cotton On has opened several stores in South African centres.

That’s not bad if one takes into account that the group has 1 000 stores and five brands. It started out with a single store in Geelong, near Melbourne in Australia, in 1991.

Before Christmas, Cotton On will open another 30 shops in South Africa, including its Factorie and Typo brands, according to the company’s Robert Kenny. He was talking at the annual conference held by the South African Council of Shopping Centres (SACSC) in Durban last week.

He says the Cotton On brand comfortably occupies its own niche market – somewhere between Mr Price [JSE:MPC] and Woolworths [JSE:WHL].

Pieter Prinsloo, chief executive of Hyprop, the biggest shopping centre proprietor in the country, says Cotton On, which a year ago took occupation in the Canal Walk shopping centre in Cape Town, will now move to a 1 000m² shop.
The current store will be converted into a Factorie outlet.

He said his company is in discussion with various foreign retailers wanting to take up space in Hyprop centres, and specifically in the Rosebank Mall.

They include British retailer H&M, Spanish fashion house Zara and the British Topshop, which will be brought to South Africa by Edgars.

Last month Zara, which is already in Sandton City, opened an 1 500m² store in Growthpoint’s Victoria Wharf mall in Cape Town’s V&A Waterfront. This is the group’s first store in the Western Cape.

Topshop will open its first store there early next year.

Stephan le Roux, Growthpoint’s retail director, says the increased presence of foreign retailers will result in a shift in market share. “It will squeeze retailers’ margins and they will either have to offer a better product or reduce prices.”

He says the other side of the coin is that shopping centres will for the first time in a long time get the opportunity to differentiate their centres, giving shoppers more choice.

Prinsloo says if foreign retailers can establish a good base in South Africa this will serve as a platform for expansion into the rest of the continent.



Hyde Park property becomes the most expensive ever in the UK

A general view of 2-8a Rutland Gate on September 14, 2012 in London, England. The property was the former residence of Sultan bin Abdulaziz, the crown prince of Saudi Arabia, and is thought to be the most expensive home ever to go on the market in Britain valued at £300 Million GBP. (Getty Images)


Walmart to Enter India Within Two Years

The UK’s Tesco and France’s Carrefour are expected to follow Walmart’s decision to enter the country.

Price said Walmart does not have a “blueprint for India”, saying that the company has not yet decided where to locate its stores or how many stores there will be.

However, Walmart does have plans to expand its partnership with Bharti Enterprises, with which the company currently operates cash and carry services in the country.

India has permitted retailers to set up stores only in cities with a population of over one million. But Price feels that in time, more states will want the retailers to come in.

“I’m a really good salesman,” he said. “At some point we’ll be able to operate there… If we have 15 or 16 stores [to start with in India], so be it.”

However, some analysts feel that Walmart faces a tough task establishing itself in India.

Praveen Chakravarty, chief executive of investment banking and equities at AnandRathi Investment Bank in Mumbai, told the WSJ that foreign retailers will find conditions difficult.

“I’m sceptical about Walmart’s ability to scale up in India to even 20 stores over the next five years and make the economics work,” he said.


Toys R Us releases list of top 50 toys

NEW YORK – It’s still technically summer, but for some it’s not too soon to think about what the kiddies will want for the holidays.

Toys R Us has come out with its annual “hot toy” list that includes tablets for kids, fashion dolls in the likeness of boy-band sensation One Direction, and even retro hits like Teenage Mutant Ninja Turtles and Furby.

Knowing early what will be popular during the holiday shopping season is crucial to retailers seeking to have the right mix of toys at the right prices. The holiday season can account for about 40 percent of a toy seller’s annual profit.

Last year, U.S. retail sales of toys fell 2 percent to $21.18 billion, according to research firm NPD Group.

This year, Toys R Us is introducing a “hot toy” reservation program. Starting Wednesday, the Wayne, N.J.-based retailer will let customers reserve the 50 toys on its list. The reservation system will run through the end of October. Toys must be reserved in stores, and customers have to put down 20 percent of the toys’ cost.

The Toys R Us hot toy list has a mix of items that it carries exclusively, as well as toys available everywhere. Toys on the list come from established companies as well as from some lesser-known toy makers in the U.K. and Australia.

There’s no indication yet of a runaway success like 2009’s Zhu Zhu Pets stuffed hamsters and last year’s Leapfrog LeapPad tablet. But Toys R Us executives are betting that if there is, it is on their list.

“We have an incredibly skilled team of merchants here that track new products and identify toys,” said Lisa Harnisch, the company’s general merchandising manager.

Here are the top 15 toys on Toys R Us’ list.

Doc McStuffins Time for Your Check Up doll by Just Play, $39.99: doctor doll based on Disney Jr. show character.

Furby by Hasbro, $59.99: update on hit 1998 furry interactive toy robot.

Gelarti Designer Studio by Moose Toys, $24.99: sticker set that lets kids paint and customize reusable stickers.

Hot Wheels R/C Terrain Twister by Mattel, $99.99: radio-controlled car that takes on all terrains.

Jake and the Never Land Pirates Jake’s Musical Pirate Ship Bucky by Mattel’s Fisher-Price, $44.99: ship from Disney Jr. animated series.

Lalaloopsy Silly Hair Stars Harmony B. Sharp by MGA Entertainment, $69.99: version of popular button-eyed doll that talks and sings.

LeapPad2 Explorer by LeapFrog, $99.99: latest iteration of LeapFrog’s tablet for kids with faster processor and more memory.

Micro Chargers TimeTrack by Moose Toys, $34.99: miniature car-racing track set.

Nickelodeon Teenage Mutant Ninja Turtles Secret Sewer Lair Playset by Playmates, $119.99: 42-inch play set that re-creates TMNT’s lair.

Ninjago Epic Dragon Battle by Lego Systems Inc., $139.99: ninja-themed Lego board game.

One Direction collector dolls by Hasbro, $19.99: dolls of each of the five members of boy band One Direction.

Skylanders Giants Starter Pack by Activision Publishing Inc., not yet priced: a sequel to Skylanders Spyro’s adventure that combines real-life action figures with a video game.

Tabeo by Toys R Us, $149.99: Toys R Us’ own tablet offering with enhanced safety features and 50 preloaded apps.

Wii U by Nintendo, not yet priced: Nintendo’s new two-screen gaming console.

Y Volution Fliker F1 Flow Series Scooter by Atomic Sports, $99.99: a three-wheeled scooter that is self-propelled by the rider’s movement.


online sales help Inditex top forecasts

Fast-changing fashion ranges and a drive to win new customers online and in emerging markets helped Inditex, the world’s biggest clothing retailer and owner of the Zara brand, to beat first-half profit forecasts on Wednesday.

The Spanish retailer, which runs eight brands including upmarket Massimo Dutti, youth label Bershka and underwear store Oysho, said its net profit rose by a third as market share gains helped it to cope with a deep recession in its home market.

Retailers across Europe are mostly struggling as shoppers’ disposable incomes are squeezed by rising prices, muted wages growth and austerity measures.

But those able to tap into growth areas like online shopping, emerging markets and “fast fashion” – where affordable versions of new styles can be brought from the catwalk into stores in as little as a fortnight – are still able to thrive.

British online retailer ASOS also posted a surge in quarterly sales on Wednesday.

“The drivers are certainly there – the rapid rollout of online sales and fast fashion – but even so it’s a spectacular performance,” said Societe Generale analyst Anne Critchlow of Inditex’s results.

At 0745 GMT, Inditex shares were up 2.7 percent at 94.76 euros. The stock has risen 45 percent so far this year, far outperforming the European retail sector which is up 6.6 percent and a Spanish blue-chip index down 4.9 percent.

Inditex said it made a first-half net profit of 944 million euros ($1.2 billion), beating a forecast of 905 million in a Reuters poll of banks and brokerages.

Sales at stores open over a year were up 7 percent from the start of the third quarter through to Sept. 17, it added.

Hennes & Mauritz, the world’s second largest fashion retailer, said earlier this week unusually warm weather in Europe dented demand for autumn clothes and led to an unexpected drop in sales in August.


With more than 5,600 stores worldwide, Inditex has reduced its reliance on its home market to 22 percent of sales from 26 percent a year ago, pushing into new markets world-wide.

The latest Spanish retail sales figures for July showed a 7.3 percent year-on-year fall, the 25th consecutive drop, and shoppers there were dealt a further blow at the beginning of this month when the government hiked value-added tax.

Inditex told analysts during a conference call it had a 12 percent market share in Spain, with half belonging to flagship chain Zara.

Founded by Spain’s richest man, Amancio Ortega, Inditex is considered to have helped invent the fast-fashion production model, which is now being widely copied in an increasingly competitive retail environment.

This month Topshop streamed fashion models live via social media direct from the catwalk, allowing shoppers to make immediate purchases.

Inditex plans to open between 480 and 520 new retail outlets this year, many of them in the world’s second largest economy China, where it launched its Chinese website at the start of this month.

Inditex has given no guidance so far on its online performance, but internet sales could be boosting growth to the tune of at least 2 percentage points, Societe Generale calculates.

“Online is allowing Inditex to access customers that wouldn’t be near one of its concept stores,” said Critchlow.

($1 = 0.7660 euros)


Mall of Egypt construction to start by end of 2012

Construction of Mall of Egypt, the Cairo shopping mall which will include North Africa’s first manmade indoor ski resort, will start by the end of 2012, UAE-based developer Majid Al Futtaim (MAF) Properties announced on Thursday.
The shopping mall, which will be built on 399,400 square metres of land outside Cairo, will have around 380 shops, a Carrefour hypermarket, 17-screen cinema complex, amusement park and an indoor ski resort similar to MAF Properties’ Ski Dubai in the Mall of the Emirates.
Construction is due to start by the end of 2012 and the US$400m contract has been awarded to a 50/50 joint venture between Orascom Construction (OC) and the BESIX Group.
The project will represent a total investment of EGP4.9bn (US$800m) by MAF Properties and will lead to the creation of 9,000 jobs during the construction phase and 7,000 once the mall has opened.

“We are now in our 20th year of operations and, notably, have been in Egypt for ten of those years. Egypt’s strong economic fundamentals, such as its young and growing population, make it an attractive growth market. We are committed to building on our success in Egypt and investing in the country’s long-term economic growth,” said Peter Walichnowski, CEO of MAF Properties
Earlier this week, MAF Holding, MAF Properties’ parent company, reported revenue in the first half of 2012 rose 15 percent year-on-year to AED10.7bn on the back of recovering tenant sales in markets such as Bahrain and Egypt.
The mall operator’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) grew 17 percent year-on-year to over AED1.5bn (US$408m), while total assets amounted to AED37bn.
Iyad Malas, CEO of Majid Al Futtaim Holding, attributed the positive balance sheet to a recovery in revenue from markets previously impacted by the fallout from turbulence during the Arab Spring demonstrations.
“2012 has already been a successful and busy year for us. We have seen turnarounds in markets previously impacted by the Arab spring, with tenant sales increasing about 44 percent in Egypt and about 23 percent in Bahrain, in the first half of the year,” he said.
MAF Properties portfolio of 11 shopping malls and 10 hotels in the MENA region accounted for 64 percent of the group’s overall EBITDA and saw revenue for the period rise 16 percent to AED1.5bn.
“Our shopping mall strategy remains focused on strengthening our regional shopping mall presence, with developments in both Lebanon and Egypt moving forward and strategic opportunities in the Kingdom of Saudi Arabia, Abu Dhabi and Azerbaijan under review,” Malas said.


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Richemont agreed to buy Peter Millar

Cie. Financiere Richemont SA (CFR), the maker of Chloe bags and Dunhill briefcases, agreed to buy Peter Millar LLC, a U.S. maker of luxury sportswear for an undisclosed amount.

Richemont expects to complete the purchase in October, and it won’t have a “material” effect on profit in the year through March 2013, the Geneva-based company said in a statement today.

Peter Millar was created in 2001 by Chris Knott, who named the company after an inscription on an antique lawn bowling ball he received from his mother. Knott worked more than 20 years in fashion for companies such as Hugo Boss AG (BOSS) and Burberry Group Plc. (BRBY)

The clothing maker’s business operations are based in Durham, North Carolina, and it has a design center in Raleigh, according to its website. Peter Millar makes comfortable garments for men and women for work or leisure, the company said.


JC Penney new shops shine, rest of store sales tough

J.C. Penney Co Inc’s (JCP.N) new shops within stores are doing much better than other parts of its department stores, but it is “way too early to draw conclusions” as the retailer is still rolling out the strategy, Chief Executive Ron Johnson said.

Comparable sales at the new shops within stores, including those selling IZOD sportswear and Levi’s jeans, are running 20 percent higher than elsewhere in the stores, Johnson told analysts on Wednesday.

Investor enthusiasm for results at the new shops quickly faded when Johnson spoke about sales in the rest of the store.

“We had a back-to-school (season) that … continued like it started; we were pretty pleased with it. The last two weeks have been much tougher than we planned,” he said during a presentation in Texas that was also webcast.

Johnson conceded it was “way too early to draw conclusions” as the retailer has so far opened only 12 of the “stores-within-stores” 3 to 7 weeks ago.

Sales of denim overall during the back-to-school season were great, Johnson said.

Shares of J.C. Penney closed up 3 cents at $29.09 after rising more than 8 percent initially following Johnson’s comments about sales at the stores-within-stores.

Under Johnson, J.C. Penney is planning to transform its stores into a collection of 100 specialty boutiques by 2015.

The strategy also included getting rid of coupons, leading to large sales drops early on as confused shoppers accustomed to discounts went elsewhere. In the second quarter, same-store sales fell 21.7 percent.

Activist investor William Ackman, whose Pershing Square Capital Management is Penney’s largest shareholder, asked during the meeting about the company’s store at the Stonebriar Centre shopping mall in Frisco, Texas, where updates have been made.

That store’s look surpasses those of the chain’s other stores and Penney is working on rolling such improvements out elsewhere, Johnson said.

“Presentation changes perception,” Johnson said.

Penney is trying to lure slightly younger shoppers with a little more income than its current clientele. In the home category, it hopes that bringing in products from the likes of designer Jonathan Adler and architect Michael Graves will attract new shoppers to the 110-year-old chain.

Penney has the oldest customer in home goods compared with rivals Target Corp (TGT.N), Wal-Mart Stores Inc (WMT.N), Macy’s Inc (M.N) and Kohl’s Corp (KSS.N), Johnson said.

“We’ve got to get a younger customer,” Johnson said.


Pessina Plans to Build More Stakes in China, Open Pharmacies

Alliance Boots Holdings Ltd. Chairman Stefano Pessina said the company plans to expand in China by buying into the biggest pharmaceutical company there in five years’ time and opening pharmacies in the Asian nation.

While local laws restrict the company from taking outright control of a Chinese business, “it is very likely we will have a stake in the largest operator,” Pessina said in an interview at the World Retail Congress in London today, without being more specific. “We have been in talks with everybody in China.”

Alliance Boots is already the largest foreign owner of Chinese pharmaceutical businesses after its purchase last week of a 12 percent stake in China’s Nanjing Pharmaceutical Co., the fifth-biggest drugs wholesaler. It has had a joint venture with Guangzhou Pharmaceuticals Corp., the sixth-largest wholesaler, since 2008. China’s pharmaceutical wholesale and retail market is worth 431.3 billion renminbi ($68 billion), according to Zug, Switzerland-based Alliance Boots.

While Pessina didn’t identify businesses that his company may seek to take a stake in, he said Sinopharm Group Co. is China’s biggest drugs distributor, with about 10 percent of the market, followed by Shanghai Pharmaceuticals Holding Co. and China Resources.

Alliance Boots will have “a large chain of pharmacies sooner or later,” competing against local chains such as AS Watson Group, the retail arm of Hong Kong-based Hutchison Whampoa Ltd., the 71-year-old billionaire said.

‘Everything is Possible’

“For sure we will have a large chain of pharmacies,” Pessina said. “The law is changing, we have discussed with the relevant authorities, so sooner or later we will be there.” The chain may not be branded Boots, he said, and the company’s cosmetics brands such as No. 7 may not be sold in China as local laws require animal-testing which Boots won’t do, Pessina said.

“In China everything is possible, and it will depend not just on our ability, but the political environment,” he said. “We have some chances to be one of the consolidators.”

Walgreen Co. (WAG), the biggest U.S. drugstore operator, said in June it agreed to buy 45 percent of Alliance Boots from owners including private-equity firm KKR & Co. (KKR) and Pessina.

The executive said today that while markets in Europe are under pressure, he is confident Boots will come through stronger than its competitors as it gains market share.

“We are planning inside the company for an additional two years,” of about zero growth in the pharmaceutical market in Europe, Pessina said. “Overall I’m definitely certain we will get out much, much stronger, even if we won’t be able to continue our double-digit growth.

“Now we are not suffering, but if we suffered, many of our competitors who are now suffering will die.”

The U.K. market has shown “a small signal in the last two months it’s slightly improving,” as consumers become accustomed to the “new normal,” Pessina said.

Britons are spending more on medicines and Boots is adding more new products, and value-priced ranges, he said.


Hilton Worldwide to speed its growth in Africa

HOTEL group Hilton Worldwide will accelerate growth in Africa and already has 19 properties in the pipeline to add to its 33 hotels on the continent, CEO Chris Nassetta said on Thursday.

“There are amazing growth opportunities in Africa — we will grow rapidly, there is exceptional opportunity to grow that base,” Mr Nassetta said.

Many players in the hospitality space are turning their attention to the rest of Africa‚ as growth slows in developed markets. At the beginning of September, Carlson Rezidor opened its first hotel in Zambia, Lusaka, marking the group’s 22nd hotel in Africa.

This brings Carlson Rezidor’s African portfolio of properties in operation and under development to 48 hotels with 10,889 rooms. It is the 10th-largest hotel group worldwide‚ operating brands such as Radisson Blu‚ Park Inn by Radisson and Hotel Missoni.

“Countries such as Mauritius and Seychelles remain favourable tourist destinations for travellers from Africa and across the region, giving us a sound rationale to combine portfolios and drive growth from one central point,” Mr Nassetta said.

The group has also established an office in Johannesburg, to be headed by Johannes van der Putten, who will become Hilton Worldwide’s vice-president for Africa and Indian Ocean, leading operations across the continent with a focus on supporting the company’s business expansion strategy.

Hilton Worldwide has added about 1,000 hotels in the past five years to its portfolio, which translates into about 162,000 rooms around the world. “We hope to add another 1,000 in the next three to five years,” Mr Nassetta said.

The group has about 4,000 hotels in 102 countries. It focuses on third party capital sources as opposed to owning the properties itself. The company manages a property for a local or regional player.

Pointing to Africa’s projected growth rate of 6%, Hilton Worldwide Middle East and Africa president Rudi Jagersbacher said earlier this year: “This gives us confidence to invest even further. Our long-term goal is to have a Hilton hotel in every key city across the continent. The next few years promise to bring a wide range of opportunities, including the opening of hotels in new markets such as Sierra Leone, Chad and Uganda.”

The company also announced that Pezula Resort & Spa in Knysna, Western Cape, will join its luxury portfolio segment, Conrad Hotels & Resorts, following the signing of a management agreement with resort owners, Alderney Establishment. Hilton Worldwide now has four properties in South Africa, including Pezula.

Industry players have said the outlook for the hotel industry in sub-Saharan Africa is increasingly positive, with potential growth of 7%-15% in revenue per available room (RevPAR) expected for this year. This is almost double the growth expected for America and Asia.

RevPAR is a measure the hotel industry uses to calculate daily sales by multiplying the occupancy rate with the average daily rate for a room.

Local players have not been left out of the expansion drive. As part of its $130m African expansion drive, the Protea Hospitality Group in July signed an agreement for the construction of another hotel in Uganda. Protea, with its partners in the property sector, aims to build 10 hotels on the continent, making it the largest investor in new hotels in Africa this year. JSE-listed City Lodge plans to invest as much as R1.5bn over the next five to 10 years building up to 20 hotels in Africa.


Carphone Warehouse boss in mystery departure

Possible protest over plans to axe hundreds of jobs

Britain’s Carphone Warehouse is keeping tight lipped over why its managing director Matt Stringer is leaving after just two years in the job.
According to The Times newspaper, Matt Stringer walked out in protest over a restructuring of the group that could result in hundreds of workers being axed.
The former Marks and Spencer executive joined Carphone Warehouse in June 2010, answering to CEO Andrew Harrison.
He was the company’s first UK m.d., though sources suggest his switch to a low margin business like mobile phone retail had proved difficult.
His decision to quit comes just weeks after retail director Anthony Hemmerdinger also left the company after just over a year in the job.
Carphone Warehouse employs over 4,000 people across more than 800 stores, but has been hit by a drop in pre-pay sales and a weakening pay-as-you-go sector.
Stringer, hailed by his colleagues as a passionate leader, had more recently been involved in rolling out the company’s Wireless World initiative – specially adapted stores focussing on tablets, add-ons, apps and content sales. He was also responsible for pushing Android sales.
His departure comes as Carphone Warehouse braces itself for the UK debut of Apple’s iPhone 5 – already claimed as the most pre-ordered phone in the company’s history, with four times the orders of any other handset since the company started trading in 1989.


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Co-operative On Target To Open More Than 80 Stores This Year

Co-operative Food has revealed that it is on target to launch more than 80 stores in 2012, and invest over £260m on expanding and developing its food store estate.

The Co-operative is ramping up its activity and will launch, on average, more than two Food stores every week before the end of the year, as part of its ongoing acquisition strategy, which has already seen 49 stores launched to date. This year alone The Co-operative has exchanged 35 contracts, and completed 52, as well as extended two stores and relocated a further eight.

At the start of the year The Co-operative also acquired Scottish convenience retailer David Sands Ltd, and it’s 28 food outlets located in Fife, Kinross and Perthshire, which are currently being rebranded.

The Co-operative, which is the UK’s fifth largest food retailer, said it is focusing on stores, either leasehold or freehold, between 2,000 sq. ft. and 18,000 sq. ft. particularly in high street and local community locations.

Stuart Hookins, Head of Portfolio Strategy, Acquisitions and Disposals, The Co-operative Food, said: “It has been another very busy year for us and our continued activity in the market place highlights our ambitions to expand our food store estate.

“We are focused on the convenience sector and are on target to launch 83 food stores this year, following the massive capital investment of more than £260m. With even more acquisitions in the pipeline we are in a very strong position, putting us at the forefront of the convenience market.”


Philip Green Calls for U.K. to Extend Sunday Opening in December

Billionaire Philip Green, owner of the Topshop, Dorothy Perkins and Wallis fashion chains, called for the government to extend Sunday opening hours in December to help U.K. shops and meet the needs of consumers.

“In the four weeks over Christmas, where people need a bit more time to do their Christmas shopping, they’re working all week, I get it,” Green said in an interview at the World Retail Congress in London today. During the rest of the year, extended hours on Sunday aren’t needed, he said.

The U.K. government allowed retailers to open for more than the six-hour limit on Sundays over the eight weekends around the Olympic and Paralympic Games to boost growth. Green said the U.K. is a “tough marketplace,” where retailers have to work harder than ever to lure consumers. U.K. retail sales fell 0.2 percent in August, the Office of National Statistics said today.

“I think the consumers are more discerning than ever, there’s more choice, there’s obviously many more ways to shop,” Green said. “Our focus is our supply chain being sharper than ever, making sure we’ve got regular newness across all of our businesses, not just Topshop.”

Green’s comments on Sunday trading hours contrast with Sainsbury Plc Chief Executive officer Justin King who sees the current restrictions “as a good British compromise.” William Morrison Supermarkets Plc CEO Dalton Philips has called for extended hours on the Sunday before Dec. 25 to help shoppers.

Green said that when temperatures dropped 8 degrees last week, knitwear sales surged 20 percent, “so it’s a really challenging market place.”

Green is looking to open stores in China and India with flagship shops. In the U.S., where Topshop has just opened its first concession spaces inside Nordstrom Inc. (JWN) department stores “it’s early days, but it looks interesting,” he said.


Primark opens second Oxford St store

Fast fashion retailer Primark has today opened a second store on London’s Oxford Street, one of its biggest stores in the UK.

Following the opening of its Marble Arch store in 2007, the new82,400 sq ft flagship is located at the east end of Oxford Street and is spread over four trading floors.

Opening ahead of the Christmas trading period, the store will create 1,443 new jobs and has a capacity for almost 2,500 shoppers.

Primark now has 244 stores in the company, 157 of which are UK-based and following this opening will have 30 stores across the capital.

A prime retail shopping site, the store was built on the former Oxford Street Music Hall site and maintains its unique exterior and existing arches on the ground floor area, which have been restored.

A Primark spokesperson commented on the opening, saying: “We are very excited to open another store on Oxford Street which has come about in response to high customer demand.

“Since our first UK store opened in 1973, we have developed a loyal customer following and we are determined to provide them with the best possible shopping experience.

“We believe our winning formula of providing the latest looks at affordable prices continues to appeal to our customers.”


Kingfisher makes new board appointments

Kingfisher, the owner of DIY chain B&Q, has announced that Euan Sutherland and Philippe Tible are to join its board as executive directors. The appointments will take effect on 1 October when Karen Witts, who was named as group finance director in July, joins the business and also takes a seat on the board.

Sutherland is Kingfisher’s group chief operating officer, having joined the company in 2008 as CEO of B&Q and Kingfisher UK. Tible is Kingfisher divisional CEO, Castorama and Brico Depot, responsible for the group’s businesses in France, Poland, Russia and Spain. He joined Kingfisher in 2003 as CEO of Castorama France.

Kingfisher said the appointments were part of a planned evolution of the Kingfisher board, following the announcement of the new senior management structure in February and the launch of the Creating the Leader plan in March.

Ian Cheshire, Kingfisher group CEO, said: “I am delighted to welcome Euan, Philippe and Karen to the Board. With Kevin O’Byrne (Kingfisher Divisional CEO, B&Q) already a board member, it was natural that Euan and Philippe should follow suit as we pursue the next phase of our development through the Creating the Leader programme.

“I am proud of the strength in depth of the management team here at Kingfisher and that we have been able to promote from within for these board positions. These changes mean that all five of Kingfisher’s group executive will now be on the main board. I look forward to working with Euan, Philippe and Karen and the rest of the senior management team on delivering the Group’s potential.”

Daniel Bernard, Kingfisher’s chairman, added: “We have a strong board, diverse in skills, age and gender, and with an excellent mix of experience gained at Ikea, Tesco, Apple and Carrefour. I’m sure that Euan, Philippe and Karen will add to these strengths and I look forward to working with them.”


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Choithrams plans eight new upscale cafes in UAE and Bahrain

Dubai: Choitrams is planning to open eight gourmet cafes to be attached to their supermarkets in UAE and Bahrain, the company’s director told Gulf News.

“We see things turn around in the market and a lot of commercial and residential towers who require this offering. A lot of landlords aren’t just looking for run of the mill supermarkets, they want them to do over and above [that],” Manoj Thanwani, Director of Choithrams, said adding that an F&B service to the community is expected.

The Dubai-based international supermarket chain is looking to open an 8,000-square foot café in Dubai International Financial Center (DIFC), six in Al Falah residential area on the outskirts of Abu Dhabi and another in Bahrain, Thanwani said.

In the UAE, three stores are scheduled to open by November or December, he said.
The Bahrain outlet, the first of the Choithrams cafes to expand into the GCC, is expected to open its doors to shoppers in November, he added.

Choithrams is planning to open 30 eateries in the next two years, according to Thanwani.
“It’s a different concept, moving away from core retailing into F&B.”

The F&B market here is a fast growing and explains Choithrams plans to tap into this opportunity, an analyst said.

“The consumer food service market is highly developed and rapidly growing in the UAE, with 11 per cent sales growth in 2011 according to Euromonitor research, thus there is very high potential for this industry,” said Sana Toukan, Research Manager at Euromonitor Middle East.

Gourmet offerings are also popular with affluent locals and high-income Arab and Western expats, she added.

“With a market predicted to see a compound annual growth rate of 6% over the next 5 years, there is definitely room for further expansion within this market with more tourists expected to flock into the country, a recovering economy which is expected to create more jobs and thus push more expatriated to the country, there is huge potential for further growth,” Toukan said.

But in a market already saturated with cafes, how would this concept stand out?

“We’ve done tremendous research and design. The market is saturated with large players from the international market and home grown ones, but not many can go in a cafe and shop and take out—and do that in a residential tower,” Thanwani said.

Kinnersley Kent UK, a retail F&B designer, is designing the look of the stores, he said, adding that Choithrams signed with Aldar Properties for the six stores in Al Falah.


South Africa’s retail sales slowed to 4.2%

Johannesburg – Growth in South Africa’s retail sales slowed to 4.2% year-on-year in July compared with a revised 8.6% in June, Statistics South Africa said on Wednesday.

On a monthly basis, sales were up by 0.1% in July and increased by 6.2% in the three months to July compared with the same period a year ago.

Economists polled by Reuters had expected year-on-year sales growth of 7.1% in July.

The retail sales data was based on a new sample drawn in April 2012, replacing previous sample drawn last year.

“Underlying retail sales is slowing but not overly fast, helped by unsecured credit growth and still-decent real disposable income growth.

“The number today probably won’t really unduly trouble the South African Reserve Bank and will be in line with their view of a steady slowdown in consumption,” said analyst Peter Attard Montalto.

Growth in sales averaged 6.1% last year compared with 5.1% in 2010.

Analysts expect sales to moderate this year as consumers cut down on non-essential spending as higher fuel and food costs bite.

A 25% unemployment rate is also likely to hamper robust sales in retail stores.

Consumer spending boosted economic growth in the third and fourth quarters of 2011 as demand-related sectors grew. The central bank cut interest rates to a 40-year low of 5% last month.


Carlyle Group buys stake in Turkish lingerie chain

Carlyle Group, the US private-equity firm in which Abu Dhabi’s Mubadala Development Company owns a 7.5 percent stake, has acquired a minority stake a Turkish hosiery company, it was announced on Wednesday.

Istanbul-based Penti, a hosiery manufacturer and retailer of women’s hosiery, lingerie and swimwear in Turkey, also has 11 outlets in Saudi Arabia, including Dammam, Riyadh and Jeddah.

While the size of the minority stake was not disclosed, financing for this investment came from Carlyle MENA Partners’s US$500m fund focused on the Middle East and North Africa. The transaction is due to be closed in early November, the statement said.

Worldwide Penti employs 1,847 people and has 155 stores in Turkey and 39 stores in 16 countries.

Last month, Carlyle hit the headlines when it struck two multi-billion dollar deals, including stakes in photo agency US-based Getty Images and China’s largest private medical check-up services company.


India strike over supermarket reforms

BBC’s Yogita Limaye: ”The government faces a tough challenge to implement the policies”

Opposition parties and trade unions in India are joining in a day-long strike over the government’s plan to open the retail sector to global supermarket chains and other reforms.

Early reports said that opposition workers had blocked railway tracks in Uttar Pradesh and Bihar states.

A key ally of the ruling coalition has pulled out of the government in protest at the plan.

Observers say the coalition’s majority in parliament is not at immediate risk.

Thursday’s nationwide strike, called by the main opposition Bharatiya Janata Party (BJP), its allies and Communist parties, has shut down schools, businesses and public transport in many cities.

TV channels showed protests taking place in the cities of Patna, Allahabad and Varanasi in northern India.

Most businesses were shut in the eastern city of Calcutta and public transport was disrupted, reports said.

The southern state of Karnataka, which is ruled by the BJP, was shut down in response to the strike call with buses off the roads and schools, hotels and commercial establishments closed.

The state capital, Bangalore – home to hundreds of IT companies including multinationals like IBM and Microsoft – was completely shut down.

“The fear factor is the reason for the closure,” a spokesperson for a multinational company told the BBC.

“We have asked our employees to stay back at home. We will instead work on Saturday,” an official of Infosys, one of India’s leading software companies, said.

The Confederation of All India Traders said 50 million people were expected to participate in the protests, and that large demonstrations were planned in Delhi and other cities.

‘Adverse impact’
“Multinational companies will destroy the economic and social fabric of the country and will adversely impact traders, transporters, farmers and other sections of retail trade,” Praveen Khandelwal, the head of the group, was quoted as saying by AFP news agency.

Small shops fear they will be put out of business
Delhi’s plan is aimed at reviving a flagging economy, but small shops fear they will be put out of business.

A Delhi-based trader Deepak Sethi said shopkeepers would lose business if foreign supermarkets were allowed into India.

“These big companies can attract customers by selling at cost prices. That means people here are going to lose jobs. Shops like ours will be hit the most.”

The Trinamool Congress party, a key ally of the ruling coalition, has said it would pull out of the government and that its six ministers would resign on Friday.

The BBC’s Andrew North in Delhi says the scale of protests will help tell whether the government can execute the reforms successfully.

The government also announced a 14% rise in the price of diesel, which is heavily subsidised in India.

Under the government’s proposal, global firms – such as Walmart and Tesco – will be able to buy up to a 51% stake in multi-brand retailers.

Multinational retailers already have outlets in India, but at present they can sell only to smaller retailers. This decision allows them to sell directly to Indian consumers.

Indian Prime Minister Manmohan Singh has said the reforms would “help strengthen our growth process and generate employment in these difficult times”.