Monthly Archives: November 2012
Shares of Abercrombie & Fitch Co soared more than 30 percent in premarket trading after the teen clothing retailer reported improved third-quarter profit Wednesday on demand in foreign markets and a full-year forecast that exceeded analysts’ estimates.
Still, the improved performance doesn’t signal the end of Abercrombie’s troubles, analyst Brian Sozzi of NBG Productions said.
I don’t believe Abercrombie is suddenly the share winner in teen apparel land, and what is being seen today is management of Street expectations and perhaps, top line related leverage from prior flagship store openings,” he said in a note to clients.
“Over the past year, sales of Abercrombie & Fitch have dwindled as the chain’s style lost favor in a segment dominated by so-called fast-fashion retailers – rivals with a quicker turnover of inventory and styles such as American Eagle Outfitters and Gap Inc, or Forever21, which offers affordable clothing for more seasons.
Shares of the company, which hired Goldman Sachs Group Inc in September to help ward off pressure from investors, jumped 31 percent to $40.98 in trading before the bell. Abercrombie & Fitch closed at $31.18 on Tuesday on the New York Stock Exchange.
The retailer expects to make about $2.85-$3.00 a share for the full year. Analysts, on average, were expecting the company to earn $2.48 a share, according to Thomson Reuters I/B/E/S.
The company has moved to curb dwindling sales by increasing sourcing from the United States and Central America, and delaying expansion in troubled European markets.
Same-store sales, or sales at established stores open for at least a year, fell 3 percent in the third quarter, an improvement over the 10 percent drop in the second quarter.
Same-store sales are expected to drop into the mid-single digit percentage in the fourth quarter.
For the third quarter ended Oct. 27, Abercrombie earned $71.5 million, or 87 cents a share, compared with $50.9 million, or 57 cents a share, in the same quarter last year. Analysts were expecting earnings of 59 cents a share.
Sales rose 9 percent to $1.17 billion, led by a 37 percent rise in international markets.
Fashion brand Ted Baker has said that it is “pleased” with its performance in the 13 weeks to November 10th, in which revenue jumped 22.1%.
In the period, retail sales were 24.6% up and average retail square footage rose by 13.7%. The group opened opened further concessions in leading department stores in the Netherlands, Ireland and Spain as well as its first concessions in Germany. Meanwhile, it opened its first store in Beijing and expanded its concessions in the US, although momentum was disrupted by the effects of Hurricane Sandy towards the end of the period. Further licensed store openings are planned in Kuwait later in the year.
Commenting on trading, Ray Kelvin CBE, Founder and Chief Executive said: “The Group has delivered a good result over the period, in line with our expectations. We are very encouraged by the reaction to the brand and collections in our new markets where we are investing for the longer-term development of the brand and further new store openings are planned for the coming months, including our first store in Toronto, Canada, further stores in Shanghai, China as well as a new store in Heathrow Terminal 3.
“Whilst we are pleased with our performance to date, full-year results will as always be dependent on trading over the key Christmas period.”
Starbucks Corp. (SBUX) agreed to buy Teavana Holdings Inc. (TEA) for about $620 million as Chief Executive Officer Howard Schultz expands beyond U.S. coffee shops.
Teavana investors will receive $15.50 a share in cash, Seattle-based Starbucks and Atlanta-based Teavana said today in a statement. The takeover is expected to close by the end of the year and will add about 1 cent to earnings per share in Starbucks fiscal 2013, the companies said.
Starbucks, which dropped the word “coffee” from its logo last year, has in the past 13 months bought Evolution Fresh Inc. to expand into juice and Bay Bread LLC to add pastries. It has also recently started selling energy drinks and a single-serve coffee machine, called Verismo, in the U.S.
Teavana, founded in 1997 by Chairman and CEO Andrew Mack and his wife, Nancy, sells more than 100 kinds of loose-leaf teas.
Teavana jumped 29 percent to $13.04 at 2:20 p.m. in New York before the stock was halted. Starbucks fell 1.6 percent to $49.51 at 2:57 p.m.
guardian.co.uk, Wednesday 14 November 2012 08.30 GMT
Sainsbury’s has enjoyed 31 consecutive quarters of underlying sales growth. Photograph: Roger Bamber/Alamy
Sainsbury’s, Britain’s No 3 supermarket, beat forecasts with a 5.4% rise in first-half profit, helped by the development of its online and convenience stores business, the two fastest growing grocery channels in the UK.
The group, which has enjoyed 31 consecutive quarters of underlying sales growth, is continuing to outshine industry leader Tesco, which last month posted a 12.4% fall in first-half UK trading profit. No 2 player Asda is due to update on its third quarter on Thursday.
Sainsbury’s said on Wednesday it made profit before tax and one-off items of £373m ($593m) in the 28 weeks to 29 September.
That compares with analysts’ consensus forecast of £371m, according to a company poll, and £354m made in the same period last year.
First-half sales rose 4% to £13.37bn as Sainsbury’s outperformed the market, increasing its share to 16.7%, the highest for nearly a decade.
Last month, the firm posted better-than-expected second quarter underlying sales growth.
Sainsbury’s said online sales grew at over 20% and it opened 49 convenience stores during the period.
“Certainly if you compare our performance with all our major competitors we’re doing the best both in sales and profit,” chief executive Justin King told Sky News.
Industry data has shown Sainsbury’s sustaining market share gains from rivals into the second half as it also benefits from the success of its Brand Match pricing initiative, higher penetration of own-label food ranges and increased sales of non-food products.
The group has also enjoyed a boost to its profile from its sponsorship of the London Paralympic Games.
“Whilst the wider economic situation remains challenging, we are well positioned,” said King.
Though Britain is out of recession many retailers are still finding the going tough as consumer spending is held back by wage increases below inflation, which hit a five-month high in October, and government measures designed to cut national debt.
Grocers traditionally cope better in tough economic times thanks to their focus on essential goods, but some of them have also struggled.
Last week, an industry survey said British retail sales slowed sharply in October, while Morrisons, the UK’s No 4 grocer, posted a 2.1% fall in third-quarter underlying sales, highlighting high levels of promotional activity. Earlier this month, electrical retailer Comet collapsed into administration, threatening 6,600 jobs.
J Sainsbury shares are up 14% over the last year, buoyed partly by the return of speculation regarding a possible renewed bid attempt from its 26% Qatari shareholder. The stock closed on Tuesday at 347.2p, valuing the business at around £6.56bn.
The company is paying an interim dividend of 4.8p a share, up 6.7%.
* Diluted headline EPS at 232 cents vs 173 cents
* Sales up 14 percent at 6 billion rand
* Shares down 1 percent (Adds details, shares)
JOHANNESBURG, Nov 14 (Reuters) – South Africa’s third-largest clothes retailer by value, Mr Price, booked a 34 percent jump in first-half profit on Wednesday helped by a lower tax bill and debt-fuelled consumer spending, but expects a tough business environment in 2013.
Mr Price, which caters to lower income shoppers in Africa’s top economy, said diluted headline earnings per share totalled 232 cents in the six months to end-September, compared with 173 a year earlier.
Headline EPS, the primary profit gauge in South Africa, strips out certain one-off items.
Sales increased 14 percent to 6 billion rand ($684 million), helped partly by price increases and new stores, which added nearly 4 percent to its trading space. Same-store sales increased by 8.5 percent.
The Cape Town-based company said it expects trading conditions to remain challenging in the short term as consumers battle high personal debt levels.
Shares in Mr Price fell 1 percent to 142 rand by 1238 GMT, lagging behind a flat benchmark JSE Top-40 index.
“Mr Price is a great company and has done very well over the years but we think the share price valuation is based on unrealistic expectations,” said Warwick Lucas, an analyst at Imara SP Reid.
Mr Price and other domestic retailers are among the top performers on the bourse this year as investors bet on continued consumer spending thanks to above-inflation wage increases, cheap borrowing and government grants.
The company, which joined the fund-tracked Top-40 index in September, is up nearly 80 percent so far this year, outperforming a near 20 percent rise on the key index.
But a surge in unsecured loans have prompted some analysts to warn of a credit bubble, saying retail stocks are priced for more than they can deliver.
Separately, food retailer Spar Group reported a 10.6 percent rise in full-year profit but warned of tough competition in the market where Wal-Mart’s South African unit Massmart is looking for a bigger share. ($1 = 8.7701 South African rand) (Reporting by Tiisetso Motsoeneng; Editing by Jon Herskovitz)
Apparel Group, the Dubai retail conglomerate, is in talks to bring several new American fashion brands to the GCC and India, its CEO has told Arabian Business.
The retailer, which holds the franchise rights to brands Tommy Hilfiger and Tim Hortons, said it expects to see its business grow up to 32 percent this year on the back of increased tourists from China and Saudi Arabia.
“There are several new brands on the way; we’re bringing in fashion brands… and some kids wear brands. They are mainly North American [brands]. We are looking at opening in the Gulf first and then India. With the fashion brand we’ll have close to 120-130 stores and the kids brand will be about 100 stores within three to five years,” said Nilesh Ved.
“This year has been fascinating because we have seen a lot of Saudis in the city [Dubai] and a lot of Chinese so we’re getting a lot more tourists. We’ll growth by 28 to 32 percent [in 2012]; we’re opening new stores and bringing in new brands so there is a lot of things happening,” he added.
The UAE has benefited from a rise in tourists as Arab Spring unrest in the region’s traditional travel hotspots has diverted business towards the Gulf country.
Retail accounts for around 30 percent of gross domestic product in the emirate.
A 2011 report by consultants Business Monitor International said the UAE’s retail sales would grow from an estimated AED79.35bn in 2011 to AED105.47bn by 2015.
The Apparel Group in January signed a deal to open ten outlets in Abu Dhabi’s Dalma Mall, including a branch of its franchised Tim Hortons coffee shop chain. The firm will open stores including Aéropostale, Dune and Tim Hortons in the first quarter.
The group also plans to open 120 Tim Hortons outlets in the GCC within the next five years. “With the growth in Canadian expatriates and the number of travellers who now visit the country, we know the popularity of the brand will grow here,” said Ved. “We don’t have a specific timeframes for the other markets yet but certainly our focus will be on the UAE.”
Johannesburg – Shares of Direct response retailer Verimark Holdings [JSE:VMK] tumbled 5.6% to 85 cents after the seller of “As seen on TV” goods says it fell to a pre-tax loss of R4.4m in the six months to end-August, hit by unexpected supply challenges and operational inefficiencies.
Verimark, whose products include the “Shogun” knife sharpener and the “Genie Bra”, says the unexpected delay in the completion of its new head office and warehouse will continue to have a negative impact.
Algeria earmarks USD250m to build 270 retail stores
The Algerian government will spend USD 250 million on new retail department stores before the end of 2013, and local contracting companies will be assigned the projects, an official told Zawya.
“Algeria will announce a tender to pick a national company next month for the 270-store project; 30 of which will be retail stores and 240 will be for wholesale,” said Abdul Aziz Ayt Abdurrahman, a senior official in the ministry of commerce.
“Local contracting companies will carry out the project through national tenders, particularly after the government removed the scattered marts inside the largest cities,” said Abdurrahman, noting that the government will award licenses to foreign businessmen interested in building stores and marts like those in GCC countries.
“Algeria needs 1,500 marts and stores; this shortage of outlets usually leads to a surge in prices of foodstuff and consumer goods,” said El Hadj Taher Boulenouar, an economist and spokesperson for the General Union of Traders and Artisans.
“The government’s decision will help meet the citizens’ needs and quell any potential crisis in goods like the one in January 2011,” Boulenouar said.
A planning application for a €25 million extension to the Liffey Valley shopping centre has been lodged with South Dublin County Council.
It is claimed the project will create some 670 jobs between construction, and full and part-time staff.
The development would bring the number of people employed at the centre to more than 2,500, and take just over two years to complete.
The application envisages an additional 10,500sq m of space at the western end of the centre in a move which would bring new brand name, fashion shops, restaurants and an expanded cinema complex.
The expansion comes at a time when many other shopping destinations across the State are reporting trading difficulties, including Dún Laoghaire, which was recently reported to have closed 100 shops since 2008.
By contrast, Liffey Valley’s owners, Aviva Investors and Grosvenor, said Liffey Valley is 100 per cent occupied.
Included in the proposed extension is a three-level retail unit of 6,577sq m, with alterations and expansion of the Vue Cinema.
There will also be six restaurants, again laid out over three floors.
Public facilities are to include a space of more than 3,000sq m to accommodate regular managed events. Architects DMOD expected this area to become a meeting place and focal point for the centre.
The revamp also includes improved links to parking and public transport.
The Liffey Valley shopping centre was opened 15 years ago, and is located at the junction of the major N4 and M50 routes.
A new report from SAS UK and Verdict entitled ‘How Britain will shop for Christmas’ reveals Britons are expected to spend £86 billion on Christmas this year, a figure up from last year, despite people having less disposable income.
Other key findings from the report include:
Retail spending over the Christmas season is expected to be up 1% on 2011
The rise in shoppers opting for online, department stores and discount stores could mean a tough Christmas for the high street
Retailers offering click and collect, m-commerce, and tablet and mobile optimised websites are set to capitilise
A third of shoppers buy gifts for pets
Brandy butter is back in fashion
‘Chablets’ (tablets for children) and Furbies will be in the top gifts lists, with traditional board games and crafts returning, and designer wellies also popular
Retail spending over the Christmas season is expected to be up 1% on 2011, driven by food sales which will grow by 2.9% in the last quarter of 2012 compared with 2011. This increase is largely due to rising prices and inflation.
However, volumes are expected to contract by 0.2% for total retail spending, with food volume sales falling by 0.5%, meaning discounting will be a major part of retailers’ strategies this year. During the festive period major gift sectors such as clothing & footwear, health & beauty and homewares are forecast to grow.
Online sales are set to account for 10.6% of the total retail spend in 2012. The results show that despite the rising importance of online, where spending will ramp up during Christmas, in-store is still a primary buying channel, meaning retailers need to ensure they remain attractive both off and online.
Maureen Hinton, practice leader UK retail, Verdict Research, said, “What retailers need to remember is that tablets will not just be bought but will help people to buy. Those giving and receiving tablets at Christmas are likely also to be using them to shop, and so retailers need to ensure that sites are optimised and offer a good experience.”
SAS UK & Ireland head of retail Cindy Etsell said, “Click and collect and M-commerce will be particularly attractive for the time-pressed over Christmas. And, while spend is up, volume is down and so discounting is expected to be a big part of retailers’ strategies.
“The combination of multi-channel shopping and heavy discounting will increase competitive pressure. And so it’s absolutely crucial retailers have analytics technology in place to understand increasingly complex customer behaviours to make the right decisions in real time on product, price, promotion and placement. Having a single customer view across different touch points will mean retailers can forecast and monitor demand more accurately to at least maintain margins.”
What is the secret to delivering three million Christmas presents in one night, assuming you are not in possession of a team of flying reindeer?
‘You need to be organised,’ Allan Lyall, Amazon’s vice-president of European operations, tells me as we walk around a 550,000sq ft warehouse near Milton Keynes, two months before the busiest online shopping day of the year. ‘Last year, on our peak day, we had a truck dispatching every two minutes and 45 seconds.’
Banish all images of an industrious festive grotto – this is a functional depot with two miles of gleaming conveyor belts, plastic boxes stacked in designated areas and strip lighting overhead. About 2,000 workers (half of them temporary Christmas staff – Amazon will take on 10,000 extra workers around Britain this year), dressed in jeans and high-visibility vests, are hard at work. But joy is not entirely forsaken – last Christmas, Lyall says, most of the staff wore Santa hats, and One Direction made a personal appearance to sing a Christmas song.
Amazon started life as an online bookshop in the Seattle garage of its founder and CEO, Jeff Bezos, in 1994. Four years later, he launched Amazon in Britain, opening the Milton Keynes distribution warehouse (or ‘fulfilment centre’, as they call it) in October 1998. Bezos started with only 10 staff, and now has 65,000 employees worldwide, operating in 10 countries. Ten years ago the company had 27 million active customer accounts – now it has 164 million. Bezos is worth $19 billion, according to Forbes magazine.
One of the most important businesses of the internet age, it is not without its critics: early this year it was revealed that Amazon, which sells almost a quarter of all books in Britain and recorded sales of £3.3 billion here last year, paid no corporation tax on its profits (it regards amazon.co.uk, its British subsidiary, as a ‘service company’ rather than a retailer).
Its strategy of heavily discounting books has made the last decade an incredibly difficult one for publishers and traditional high-street booksellers, many of whom have disappeared from the retail landscape entirely. James Heneage, the founder of the defunct Ottakar’s book chain, said earlier this year, ‘With great market power comes great market responsibility and I don’t get the feeling that the leaders of businesses like Amazon really understand that aspect.’ James Daunt, the managing director of Waterstones, added, ‘A world that is totally dominated by Amazon will be a poorer one.’
None of which, however, seems to be harming its bottom line. The secret to Amazon’s success (at the end of October it announced that net sales for the third quarter were up 27 per cent to $13.81 billion globally) is how it has made online shopping second nature – with one-click ordering, trustworthy product reviews and prompt, reliable deliveries. Its latest TV ads boast that ‘We’re the reinventors of “normal”; we dream of making things that change your life, then disappear into your everyday.’ Yet behind the scenes, the Amazon machine whirrs to the beat of secret algorithms, and the company’s day is punctuated by a series of immovable deadlines to ensure the customer barely notices a thing.
A parcel whizzes through the system at Amazon’s Milton Keynes warehouse (FRED MACGREGOR)
When I visited at the end of October, Amazon was cranking up for Christmas. While some of its more organised customers had already started shopping for presents by then, the bulk of spending starts on Black Friday (the day after Thanksgiving), a traditional American discount shopping day that Amazon introduced to Britain three years ago. Last year, deals included half-price televisions. This year Black Friday falls on November 23. But the big day in Amazon’s calendar is Cyber Monday, the busiest online shopping day of the year, which in 2012 is on December 3. Last year amazon.co.uk took orders for three million items on Cyber Monday, a rate of 35 items per second in one 24-hour period. The peak shopping time was 9pm – ‘But,’ Lyall says, ‘this peak is becoming flatter as more people place orders on their smartphones.’
Last Christmas, the most popular products included the Kindle, Amazon’s own-brand ebook reader – more than a million were sold last Christmas according to a YouGov survey – plus Harry Potter DVDs and Michael Bublé’s Christmas CD. This year the Kindle is again expected to dominate sales – two new versions have just been launched in Britain – along with Furby (a toy first launched in 1998) and Bananagrams (a word game that now outsells Scrabble). ‘Cliff Richard’s calendar is a perennial bestseller – it sold more than JLS’s last year,’ the PR director Ben Howes tells me.
Sheer volume aside, there is a mindboggling variety of stuff in the Milton Keynes warehouse, which is one of eight in the country (another three are planned to open within the next two years), with a combined space of five million square feet. Although Amazon started out selling books, it now sells everything from electronics to jewellery to garden equipment. In an interview with The Daily Telegraph in 2002, Bezos said, ‘You can’t sell a garden rake over the internet.’ The following year he launched Amazon’s Home and Garden store.
As soon as products enter the warehouse, they are scanned and logged within 12 hours. The products are separated into different sizes, and then file along conveyor belts to one of 50 ‘receive stations’. ‘This is the stuff that is available to buy now, on the website,’ Lyall says. A worker sitting at the end of what looks like a supermarket checkout scans and checks the products for any defects. If they spot something wrong, the traffic lights above their head turn red and a ‘problem solver’ rushes over to help. Today, all the lights are green, which means all the products are ready to be shelved.
Allan Lyall, Amazon’s vice-president of European operations (FRED MACGREGOR)
Amazon sells some things so quickly there is no point shelving them – books such as Fifty Shades of Grey or JK Rowling’s new novel – so they go straight to an area of the warehouse called ‘mass land’, which consists of pallet-loads of books and other high-volume items, such as Kindles. Electronic books account for an increasing chunk of Amazon’s business: in August the company announced that for every 100 hardbacks and paperbacks it sold since the start of 2012, customers downloaded 114 ebooks.
Not that this saves any space on the shelves – Amazon’s sales of physical books are increasing each year, despite industry reports that, on the whole, physical book sales were down 11 per cent for the first three months of the year. Everything else chugs along conveyor belts into the ‘picking tower’, five storeys of shelves that house more than five million items and provide dizzying views of the crisscrossing conveyor belts below.
You might think that with five million items to shelve there would be a section for garden rakes or cameras, or whatever – but not so. Shelvers pop things into a spare space, scan the item and then the code on the shelf. A Mad Men box set could be shelved at 10 different spots around the warehouse. The only rule is that no two similar products can sit next to each other, to minimise human error while ‘picking’.
That is the next stage. The army of pickers slip silently through the shelves collecting customer orders at the command of their hand-held scanners. Amazon has five delivery times, including evening delivery, first class and next day.
‘We know what time the product needs to leave the building to make, say, the Edinburgh evening delivery, which is slightly earlier than the London evening delivery,’ Lyall explains, ‘so we know when it needs to be packaged and when it needs to be picked.’
The scanner groups orders together (about 80 items) based on when they have to be dispatched, and uses algorithms to forge the most efficient route for the picker through the maze of numbered aisles and shelves. ‘The level of accuracy has to be tight,’ Lyall says. He worked for Apple for six years before joining Amazon in 2000, and says it was Amazon’s technological operation that attracted him. Though they vary in size, all of Amazon’s global fulfilment centres use the same operating systems.
‘It’s all integrated, end to end, and it’s home-grown software,’ Lyall says. ‘If we discover a better way of doing something, we can roll it out across the world overnight.’
He bends down to pick up a minuscule piece of packaging, and a few moments later squares a stack of boxes into their designated area. ‘You wouldn’t want me in your house,’ he says, grinning. ‘I can’t help myself.’ His meticulous nature is in tune with the company’s ethos: around the warehouse are yellow markings on the ground to indicate exactly where boxes should be stacked, and stations with brooms and dustpans hanging up. ‘You need to be organised and you need to be efficient.’
Parcels are fed on to ’tilt trays’ and carried chute-wards (FRED MACGREGOR)
In 2009 Bezos wrote a letter to shareholders declaring a war on muda – the Japanese word for waste. That includes wasted time. Amazon’s metrics show that a tenth of a second’s delay in loading a page on the website equals a one per cent drop in customer activity. Delays in customers receiving their parcels are unthinkable. Two years ago, unprecedented December snowfall (some things are beyond even Amazon’s control) caused anxiety among British customers and at the fulfilment centres; Amazon placed a prominent message on its website warning that ‘Adverse weather conditions are impacting deliveries across the country’, although just about everyone received their parcels in time for Christmas.
Last Christmas 99.9 per cent of parcels arrived on time. Bezos believes there’s room for further improvement, and has invested in systems to speed up the picking process. The company’s profits were down by 96 per cent between April and June ($7 million, down from $191 million in the same three months the year before) because Amazon bought the robot-maker Kiva Systems for $775 million in March, to automate its warehouses in the future.
For now, the system relies on human beings. Once the pickers have collected their prescribed orders, they put the items into orange boxes, which travel via conveyor belts down to the packing area. There, ‘packing associates’ sit at checkouts. As an order comes through, a message on their computer tells them what size cardboard box they need.
Each box is weighed (to check that no items are missing) and only then is it stamped with the customer’s address – until this point no one at Amazon has seen who has bought what. Then it’s off to the ’tilt tray’ system, the most Wonka-ish section of the warehouse. It’s also the part of the process that most excites Lyall, where the conveyor belt feeds each sealed and addressed order on to its own school-dinner-style tray, which then travels towards hundreds of chutes, each representing a different regional or international destination. Each box’s barcode is scanned automatically and when it reaches the correct chute for its address label the tray tips, sending the parcel whooshing down.
‘You can imagine on a peak shopping day with all the lines constantly feeding in parcels, all beautifully timed, all going boom, boom, boom down every chute,’ Lyall says, taking off his glasses. ‘It’s… well, it’s pretty cool.’
Opening kickstarts development of phase II of Futura Park, Ipswich
The new John Lewis at home and Waitrose stores at Ipswich’s FuturaParkhave opened their doors for business. Developer AquiGen says all but one of the remaining retail units are now pre-let.
FuturaParkis a 44-acre retail and business park and its first completed phase is the 26,500-sq ft Waitrose located immediately next to the 43,000-sq ft John Lewis at home, the first of this new combined format in the country.
The second phase of retail space, which recently gained planning approval, offers 66,000 sq ft of retail space for which five out of six of the tenants are now confirmed. Construction on the phase two buildings is due to start in February 2013 and the stores are expected to open in July. Outline planning permission has also been granted for 25 acres of employment land to accommodate up to 600,000 square feet of new offices, warehousing and industrial space, as well as open spaces and infrastructure.
AquiGen chairman Tony Chambers said: “The opening of John Lewis and Waitrose is an important milestone in the regeneration of this part ofIpswich. The inclusion of high quality retail in the scheme has unlocked the value to allow the whole site to be remediated and redeveloped.”
Peter Walichnowski, who led the development of Dubai’s Mall of the Emirates, is stepping down from his post at Majid Al Futtaim for the second time in seven years.
Majid Al Futtaim Properties has started a global headhunter search to find a replacement for him. Mr Walichnowski plans to step down as chief executive in March.
The Australian property high-flyer has led the development of two of the most successful shopping and leisure destinations in the world, Mall of the Emirates in Dubai, the world’s secondlargest shopping centre, and the Bluewater shopping centre in Kent, southern England.
He told The National that he had given his notice in September and planned to quit the Arabian Gulf, possibly to take up a new post in the United States.
The move will come as a blow to MAF, which is currently putting the finishing touches on its 160,800 square metre The Mall of Egypt shopping centre in Cairo and its delayed 60,000 sq metre Beirut City Centre mall in Lebanon.
Mr Walichnowski, a well-known figure on the global property scene, first joined MAF in 2002 as the chief executive of MAF Investments.
He left MAF three years later to set up his own company, Skylan Properties, that operated in north Asia.
He returned to Dubai in 2008 as chief executive of Omniyat Properties before taking over as chief executive of MAF Properties in June 2009 after Omniyat shed a third of its staff in a company shake-up.
“I’ve worked in Australia, I’ve worked in Europe, I’ve worked in Asia and the Middle East,” said Mr Walichnowski. “I’m now at the time of life where I want to try somewhere different.”
Mr Walichnowski was one of the key speakers yesterday at the three-day Recon shopping centre conference in Dubai.
British retail giant Marks & Spencer (M&S) said on Monday it plans to open a number of new stores across the Middle East over the next few years.
The company confirmed its commitment to the region as it announced plans to enter the Jordanian market for the first time.
M&S said in a statement that it will open a new store at TAJ Lifestyle in Amman next month. It did not give further details of its expansion plans in the region.
The iconic British brand, which was established in 1884, already has a strong presence in the Middle East, which is one of its priority International markets, with 18 stores in the region through its partnership with franchisee Al-Futtaim Group.
Jan Heere, Marks & Spencer’s director of International, said: “We’re delighted to be opening our first store in Jordan in December.
“Our new store in Amman will be the first of many new M&S stores planned for the Middle East over the next few years and will feature our latest womenswear, lingerie and beauty products.”
M&S last year said it planned to speed up its international expansion in a bid to offset domestic competition with revenue from fast-growing emerging markets.
Former chief executive Mark Bolland said in February 2011 that he planned to transform M&S “from a UK multi-channel retailer to an international multi-channel retailer” by 2015.
M&S has more than 350 stores in 42 overseas territories.
Earlier this month, the high street retailer said that UK like-for-like sales during the three months to the end of September were level with last year.
The quarterly sales growth of the food division was 1.6 percent while sales in the general merchandise business dropped 1.8 percent.
For the first half of the year as a whole, sales were down 1.4 percent because of a weak first quarter.
British retailer M&S to open three stores in Egypt
M&S has more than 350 stores in 42 overseas territories
UK retailer Marks & Spencer (M&S) plans to open three stores in Egypt as part of a five-year expansion plan across the Middle East, the store’s franchise partner said.
The company will press ahead with the opening of its second Cairo store by the end of October, despite recent widespread political unrest in the Arab country, said Bruce Bowman, head of operations for M&S at Dubai’s Al Futtaim.
“We have undoubted confidence that we will be in Egypt for the medium to long term, and it’s not going to stop at a second store – there will also be a third and a fourth store,” said Bowman.
“There are active conversations going on with landlords in major malls just now.”
Egypt, the Arab world’s most populous country, attracted Gulf developers and retailers with five years of rapid economic growth prior to the revolution.
UAE developer Majid Al Futtaim operates eight supermarkets and two shopping malls in the country, with plans to open a third in 2014.
“Egypt is a key market. With a population of 80 million there’s real opportunity for scale there,” Bowman said.
Al Futtaim currently operates 14 Marks & Spencer outlets across the Gulf and is due to open its second store in Abu Dhabi in September.
Under a five-year, Gulf-wide expansion plan, the company plans to open at least one more store in Kuwait and Qatar, expand its stores in Oman and Bahrain and add new outlets in the UAE.
“The number of stores that we have in each country is going to be linked to the size of the market,” said Bowman. “We’re looking for additional real estate in Kuwait, there’s no doubt opportunity for growth there in terms of numbers of stores.
“In Qatar we have two stores, but we’ve already announced at a corporate level that Al Futtaim is building Doha Festival City and we will absolutely have a Marks & Spencer there.”
M&S this year said it planned to speed up its international expansion in a bid to offset domestic competition with revenue from fast-growing emerging markets.
Chief executive Mark Bolland said in February he planned to transform M&S “from a UK multi-channel retailer to an international multi-channel retailer” by 2015.
M&S has more than 350 stores in 42 overseas territories.
HMV is targeting Christmas shoppers by opening up to a dozen short-lease pop up stores across the country.
The troubled high street retailer told Huff Post UK that its pop ups were a great way to either extend its offering to locations it doesn’t have a year-round presence in, or to complement and support existing HMV stores, such as those in shopping centres, which can get busy during the festive season.
“Our experience is customers welcome the additional choice, as this really helps them with their Christmas gift purchasing requirements – especially when it gets close to Christmas week and they prefer not to take the risk ordering online,” Gennaro Castaldo, head of press at HMV told Huff Post UK.
He added that landlords of the sites where the pop ups materialise are also keen, as they like having major brands on their pitches – making them prepared to be flexible on rent and other costs.
Castaldo claimed HMV’s pop ups could trade anything up to an additional 40,000 – 50,000 square feet in key locations at a time when many people are making their entertainment purchases, and create extra seasonal fixed-term jobs for up to 150-200 people.
The stores tend to start opening from early November, to coincide with the release of major titles on CD, DVD/Blu-ray and games and the launch of key technology products, and trade through to early-mid January, covering the Boxing Day sales period.
And the pop up store statistics can indicate whether there is an appetite for a permanent retail location.
HMV’s pop up units will appear in Barnstaple – Devon, Harrow, Lakeside Thurrock, Sutton Coldfield and Welwyn Garden City as well as secondary sites in Birmingham, Cardiff, Southampton, Manchester and Bluewater.
Among the items expected to sell well at the HMV pop ups are CDs (with Olly Murs, Robbie Williams and One Direction’s album offerings expected to do well), DVDs (The Dark Knight Rises and box sets of Downton Abbey, Mrs Brown’s Boys and The Only Way is Essex tipped as the top stocking fillers) and portable technology, such as ear phones, wireless speakers and iPhone accessories.
Despite HMV’s optimism, retail analysts remained unconvinced over the company’s long term future.
“HMV is in an extended toughing it out mode,” said Shore Capital’s retail analyst Clive Black. “Pop ups are a good reaction to technology but the group continues to face the challenge of digital encroachment.
“What is in HMW’s favour is that it is the window for a lot of artists’ material; if HMV disappeared, the market would contract. However, such a fact should not hide the slog of managing down an estate, coping with weak footfall and the digital challenge.
“In a market slog HMV is also in a category mire. The sad thing is it is a great retailer, it’s just that its market has changed and it hasn’t demonstrated category leadership online.”
Mintel’s Richard Perks, retail director, was less sentimental. “Pop-ups cannot be anything more than a ‘nice to have’; they’ll help with sales over Christmas and by the sound of it they can be profitable, so that makes them worthwhile – but they can’t be anything other than a small add on,” he said.
“I wonder if it even points up the weakness of the business. As regular demand has moved to the supermarkets and online, has HMV become even more geared towards Christmas, as Woolworths used to be? I am not convinced there is a place on the high street for a music and video specialist. I think that it needs to be part of a broader range offer and, preferably, put in cheaper, secondary space.”
However, Redmayne Bentley’s stockbroker Lauren Charnley brought a little Christmas cheer, telling Huff Post UK: “It’s clear the industry is moving more online, with the likes of play.com and Amazon flourishing, so HMV’s revolutionary pop up shops could be what is needed to turn things around for the group.
“This Christmas will no doubt be a challenging one for the sector as a whole, but HMV’s innovative way to maximise holiday sales without a year long commitment could be the boost required for a change of fortune.”
Stuart Weitzman opens its first boutique in Dubai
Designed by famed Italian avant-garde architect Fabio Novembre, the boutique store features a contemporary retail concept and the iconic Stuart Weitzman interior ribbon design. Unique features include a mosaic tile accent wall and Alphano grey stone floors that add design flare amongst the innovative ribbon shelving. A palette of vanilla/gray tones, create a modern contemporary space to showcase Stuart Weitzman’s shoes and handbags.
Commenting on the launch in Dubai, Wayne Kulkin, Vice Chairman of Stuart Weitzman said: “We love Dubai, the consumer here understands luxury and fashion better than anyone else. We think within the fashion industry, Dubai stands shoulder to shoulder with New York and London and is a very important market for our Middle East plan.
He added: “We have been in the region as part of department stores and it’s time for us to aggressively promote and feature the Stuart Weitzman name here. With our new store we aim to deliver the complete range of Stuart Weitzman designs under one roof.”
Tony Jashanmal, Executive Director at the Jashanmal Group confirming the expansion plans, said: “Stuart Weitzman’s dedication to fusing fashion, fit and comfort has earned the brand accolades from both, the design world and customers and takes a pride of place with top celebrities around the globe. We are proud to bring this iconic brand to the Middle East. Given the penchant across the region for world-class brands like Stuart Weitzman, we have plans to open four new stores in Bahrain, Kuwait and one more in the UAE within the next twelve months.”
While Weitzman is renowned for his sexy stilettos and evening sandal designs, especially amongst celebrities, the store will offer his complete fashion collection including boots, career, flats and weather. Stuart Weitzman understands that a great shoe is more than form or function; it’s about making a woman feel beautiful.
For over 25 years, his designs have garnered a very loyal customer base as accessible luxury footwear with great fit, style and comfort.
The Stuart Weitzman brand has a fashionable global presence with retail stores in the United States, Italy, Singapore, France, China, Malaysia, Middle East, Indonesia, Australia, Hong Kong, Greece, Mexico, Spain, Monaco, Germany, Canada, Switzerland and Russia.
OVER the next two years, the Foschini group will expand its African presence, adding 56 stores in the countries including Mozambique and Ghana, the company said on Thursday after releasing its interim results for the six months ended September.
Africa presents a compelling investment case for retailers — the rise in urbanisation and disposable income has seen a growing demand for modern goods.
The Economist Intelligence Unit predicts that by 2030‚ the Africa’s top 18 cities could have a combined spending power of $1.3trn.
Foschini currently trades out of 98 stores outside of South Africa, with 62 in Namibia, 16 in Botswana, 12 in Zambia, 2 in Lesotho, 4 in Swaziland and 2 in Nigeria.
The retailer believes that expansion into the rest of Africa is a longer term growth strategy and by the 2015 financial year, CEO Doug Murray said. Foschini will be trading out of in excess of 150 stores in Africa with expected turnover of more than R1bn.
The group, which besides flagship retail chain Foschini operates American Swiss and Totalsports, reported an 18.8% gain in diluted headline earnings per share to 396.1 cents for the six months to end September.
Retail turnover was up 12.6% to R6.1bn and an interim dividend of R2.36 was declared, up by 24.2%.
Jeanine Womersley‚ an investment analyst at Renaissance Capital, said the group’s earnings came in weaker than expected, largely driven by a softer than expected top-line performance, and the absence of any gross profit margin gain.
“Sales growth of 12.6% fell short of our initial forecast of 14.2%, driven by both softer like-for-like sales growth, and a slightly lower-than-anticipated contribution from new space growth. We believe management was disappointed with the group’s interim performance, specifically that of ladieswear. The group marked down goods too early when initial winter sales proved slow, only to subsequently be short of stock when weather conditions turned,” she said.
Mr Murray said: “Supply chain has been our focus for several years and the big driver is the reduction in lead times from ordering through to getting the goods into stores. Sometimes we hit some speed bumps with our supply chain and we’ve done that in the ladieswear this past interim period, but we know we’re doing the right things and we will persevere. We intend to keep trying to do more of our products in shorter lead times.”
Looking ahead, Mr Murray said retail turnover for the first five weeks of the second half had continued at similar levels to the first half and despite the challenging economic environment, the outlook remained good.
Supermarket group Morrison’s has said that its business is making “good progress”, despite a fall in like-for-like sales of 2.1%, worse than analysts had predicted and leading to the immediate departure of its commercial director Richard Hodgson.
The company said that in the 13 weeks to October 28th, total sales fell 0.4% with consumer confidence still “fragile” and high levels of promotional activity a persistent feature of the market, Morrison’s added that the trading environment “remained challenging through the period” and admitted that sales were lower than anticipated.
However, Morrison’s announced that the business was “making good progress in delivering the strategic initiatives which will provide a solid foundation for our future growth”.
The company added: “During the period we have introduced our market leading Fresh Format into a further 35 stores and are on track to meet our target of extending this to 100 stores by the end of this fiscal year.”
Martyn Jones, corporate services director, has been appointed interim commercial director pending the recruitment of a successor for Mr Hodgson who joined from Waitrose two years ago.
Morrisons’s expects to meet its financial expectations for the full year.
Truworths sees a rise in retail sales
THE share price of Truworths rallied 3.05% to close at R99.89 after the retailer reported on Thursday that retail sales for the first 18 weeks of the 2013 financial period increased by 15.9% to R3.3bn, with credit sales growth of 15.1%.
The timing of the update — released on the same day as competitor Foschini Group’s half-year results, and ahead of the entry of Topshop and Topman later this month — showed Truworths “definitely have to stake their ground and this is very positive”, Avior Research analyst Michael McLeod said.
Truworths and other retailers have been under pressure with the arrival of foreign retailers in South Africa.
Zara, owned by the world’s biggest fashion retailer Inditex, opened its doors in South Africa late last year, while UK fashion brands Topshop and Topman are due to set up shop in South Africa this month.
The Truworths Group sells Truworths, Daniel Hechter, LTD and Ginger Mary clothing lines.
Analysts said earlier this year that Truworths had misread fashion trends and some of its customers had switched to Zara, more so than the Foschini Group had lost.
However, Truworths CEO Michael Mark said in August the arrival of foreign stores in South Africa was a slow process and only a few of these stores would open in the short term, and that this was “part of the competitive landscape”.
Mr Mark said at the time that generally subdued economic growth was expected in the months ahead.
Truworths said on Thursday comparable (same store) retail sales for the first 18 weeks increased by 10.7% and product inflation averaged 3%. Credit sales comprised 72% of retail sales during the period, compared to 73% in 2012.
The trade receivables book grew by 16.5% to R4bn. “The receivables book continued to perform in accordance with management’s expectations,” the group said.
Mr McLeod said the update was “very positive” following previous concerns at the end of the 2012 financial year that earnings growth seemed to be slowing.
“They have come out much further ahead than expected,” Mr McLeod said, adding same store sales increases of 10.7% was a strong performance.
While credit sales were significantly higher than the Foschini Group’s, which was about 61%, this was not a big concern as Truworths had been good at managing their books, he said.
In August, Truworths reported a 16% rise in full-year profit for the year to June, in what it described as a highly competitive and challenging retail environment.
Diluted headline earnings per share were at 517.1c for the year to June, up from 447.5c.
Hermès International upped its target for sales growth in 2012 after reporting that sales grew 24.2 percent in the third quarter, with all regions posting double-digit growth.
The maker of Birkin bags and silk scarves reported sales of 848.6 million euros, or $1.06 billion, in the three month to Sept. 30, compared with 683.2 million euros, or $967.2 million, during the same period a year earlier. This represented an increase of 15.7 percent at constant exchange rates.
As a result, the company said its target for consolidated annual sales growth at constant exchange rates could exceed 13 percent, versus 12 percent previously. It still expects the current operating margin to fall between the 2010 level and the record high of 31.2 percent hit in 2011.
Sales in Asia Pacific remained a key driver of growth, rising 36.1 percent during the period. The Americas posted a 27 percent increase, while France recorded a jump of 18.8 percent. Sales in the rest of Europe were up 14.9 percent, Hermès said.
Sales of leather goods and saddlery, which are limited by the company’s production capacity, rose 18.4 percent during the quarter, while turnover in ready-to-wear and accessories was up 29.1 percent. Silk and textiles saw a 21.7 percent increase, and perfumes gained 14.1 percent. Sales of watches rose 24.7 percent during the period.
Landmark Group, the UAE-based retail conglomerate, is planning to invest nearly US$250m in opening around 30 Oasis Centres in Saudi Arabia, a senior executive confirmed to Arabian Business.
“Since Saudi Arabia, which contributes over 45 percent of the group’s turnover, is a key market for Landmark Group concepts, we are working towards setting up more Oasis Centre malls in the kingdom,” said Neelesh Bhatnagar, director of the Oasis Centre in Dubai.
Landmark plans to open Oasis Centres in 30 Saudi cities. “Most of the major malls are at locations like Riyadh, Jeddah and Al Khobar, but we see a lot of potential in the retail markets at secondary locations of Saudi Arabia, which are virtually untapped. These will also be cities that truly appreciate quality shopping experience combined with true value for money,” he said.
Four centres will be opened within the next 12 months and the group plans to invest AED30m in each mall, bringing the total investment to around AED900m (US$245m).
“The Oasis Centre properties will be owned and developed by our Saudi partners. We intend to seek ten-year leases plus option on another ten. Such an expansion approach will result in bringing down our initial costs, as compared to developing the property from scratch,” Bhatnagar added.
The latest venture is part of Landmark’s expansion overseas. Earlier this summer it was reported the group is eying sales of US$1bn in India over the next two years, while Splash, Landmark’s mid-market fashion retailer is planning to enter a number of African markets via franchise agreements.
The business, which sells a mixture of Western and its own fashion brands, has signed deals to open outlets in Libya and Kenya, as well as Sri Lanka, Splash’s CEO Raza Beig told Arabian Business earlier this year.
“In the next 18 months we’ll be in about in another 15 or 16 cities,” he said, adding that the African continent will be the “first concentration”. The retailer’s only presence in Africa at the moment is in Egypt, where it has two outlets.
Beig added that Splash was also eyeing Far Eastern markets. “There’s also a lot of dialogue from the East, but we’ve not yet finalised it,” he said.
Landmark Group operates 900 stores across the Middle East, India, Turkey and Pakistan and employs more than 31,000 staff.
UK fashion retailer,Wallis, launched an online US shopping portal, http://www.wallisfashion.com.
WHERE DOES WALLIS COME FROM?
Founded in London in 1923, Wallis now has over 100 stand-alone stores, 400 points of distribution and a thriving online presence in the UK. The brand has always been committed to designing on trend clothing that makes real women on real budgets look and feel great. After bringing shopping satisfaction to women in the UK for years, they have launched a US retail website, http://www.wallisfashion.com, to offer women in America the same exceptional shopping experience. In addition to contemporary apparel,Wallis offers an exciting selection of fashion jewelry, handbags shoes and additional accessories.
WHAT DOES WALLIS STAND FOR?
Wallis is proud to embody quality, value, on trend fashion with an edge. At the heart ofWallis is an understanding of real women and a desire for them to look and feel the best they can.Wallis designs clothing based on the most current trends and translates them into flattering, comfortable clothing for women of all shapes and sizes, available in US sizes 4-16, with dedicated petite clothing for women 5’3” and under.Wallis is sought out by women in the UK for their high quality products at a great value; price ranges for clothing ranges from $35 for a top up to $215 for a coat.
WHO IS THE WALLIS WOMAN?
TheWallis woman is everyone from the business executive to the full time mother. She may not have the time to spend at the mall but she still cares about looking stylish when walking into the boardroom or having dinner out with family and friends. TheWallis woman comes in all shapes and sizes. She has an eye and a need for clothing that is flattering and well made. Finally, she knows value and trustsWallis as the brand to bring her that value without sacrificing style or quality.
“Last year we ran about 58 different type of promotions to different groups in our database…this year it will be more like 20,” Chief Executive John McCarvel told Reuters.
Crocs is planning to promote three collections this year in the United States and Europe – fur-lined products, a boot collection geared for the rain, an d a new retro line of clogs.
“(Promotions are) hard to manage, consumers get confused (and) think everything is on sale all the time, which isn’t the case,” McCarvel said.
“This year we will be focused on better programs that last a little bit longer.”
However, rivals Wolverine Worldwide Inc and Skechers Inc have launched discounts to pull in frugal customers.
Crocs, most of whose products are made from a proprietary resin material, is banking on new products like its retro line to boost sales during the holiday season and will sell the shoes at a slightly higher price. A majority of the company’s products sell for between $25 and $50.
The company has been trying to reduce inventories, which stood at $187.6 million as of September 30, up 24.1 percent from a year earlier, with clogs accounting for about half of that. Inventories in the quarter included higher-priced new products brought in for fall and to stock the 35-40 stores the company plans to open in the current quarter.
The Americas accounted for about 45 percent of Crocs’s total revenue in its latest quarter, while Europe’s share was 13 percent. Sales in Europe fell 2.9 percent in the quarter.
McCarvel said the company plans to focus on promoting its new products in the European markets, which buy more of its traditional clogs.
“We are trying to get the consumer in Europe to think about us differently,” the 55-year-old CEO said.
PRE-TAX profit at the UK business of Irish-owned retail group Dunnes Stores last year more than halved to £12.3m (€15.3m).
Returns lodged by Dunnes Stores (Bangor) Ltd at Companies House in the UK show that revenues at the group declined by 6.5pc from £177.8m (€221.6m) to £166.3m (€207.3m) in the year to the end of January 28 last.
The figures show that pre-tax profit dropped by 53pc from £26.2m (€32.6m) to £12.3m (€15.3m).
The main factors behind the sharp drop were overheads increasing from £43.4m (€54m) to £47.3m (€58.9m) and interest receivable falling from £5.1m (€6.4m) to £357,000 (€445,000).
British luxury goods group Burberry today (7 November) booked a 6% rise in first-half profit, despite a slowdown in revenue growth across regions and product divisions.
The group said it made an underlying pre-tax profit of GBP173.4m (US$277m) in the six months to 30 September, up from GBP161.6m in the same period last year.
Reported pre-tax profit, however, fell to GBP112m from GBP159m, which includes a one-off payment of GBP71m to end a fragrance and beauty licence with Interparfums. Burberry will take back control of its beauty division from April next year.
The results come after the company in September issued a profit warning – but last month said comparable sales growth had accelerated in the second quarter, helped by higher quality sales and average spend.
Sales in the first-half grew 8% on an underlying basis to GBP883m (US$1.4bn).
Retail revenue at the group’s 198 mainline stores, 215 department store concessions, digital commerce and 49 outlets was up 10% to GBP577m, as comparable store sales grew 3% over the half.
Wholesale revenue – generated from sales to department stores, multi-brand specialty accounts, emerging market franchisees and travel retail – increased 5% on an underlying basis.
The firm said its retail/wholesale adjusted operating margin was up by 60 basis points to 15.5%.
Outerwear remained at the core of Burberry’s business, during the first-half, with growth driven by fashion and replenishment styles. Mens was the fastest growing product division (up 12% underlying), accounting for 25% of retail/wholesale revenue.
“In retail/wholesale, which accounts for over 90% of our business, Burberry delivered 7% revenue growth, 11% profit growth and a further improvement in operating margin, all in a challenging external environment,” said CEO Angela Ahrendts.
“Integrating fragrance and beauty is a significant brand and business opportunity. One consistent brand expression, leveraged across all categories, will underpin future growth in the Beauty division and our existing core business.”
But Jon Copestake, retail analyst at the Economist Intelligence Unit, warned the positive results do not necessarily signal a buoyant outlook.
“Burberry have also pointed to a slowdown in growth, something that many peers in the luxury and consumer goods sector have warned of, especially in Asia.
“Earlier this week L’Oreal described trading conditions in South Korea and Taiwan as “brutal” and both these markets represent strong bases for luxury goods demand.
“The decision last month to bring more products in-house may be a reflection of this with Burberry needing to focus on increasing profitability in other areas as revenue potential stalls in markets such as China.”
Heads are rolling at Guess this fall. After the company replaced Luca Donnini with Gilles Bariguian to run its EMEA region, the group announced another two new departures.
COO J. Prince Michael and CFO Dennis Secor have officially tendered their resignations to Paul Marciano, CEO of the group.
It seems that the two managers are paying for Guess’s most recent bad financial results. Last quarter the group reported operating profit down 41% to $ 96 million for net sales of 1.214 billion dollars (966 million euros), a drop of 4%.
Dennis Secor will leave the company on December 7. Nigel Kershaw, vice president of finance, accounting and treasurer, will take over his post in the interim until a successor is named. J. Michael Prince came to Guess from Nike in November 2010 and will leave on November 26. His duties will be distributed among different posts. Michael Relich, executive vice president and chief information officer, will take over responsibilities for logistics.
Tesco has today bid farewell to another of its senior executives, after it was revealed Terry Price, commercial director of its non-food business, is leaving after 18 months in the role.
Price, a Tesco and Walmart veteran, returned from China to the UK to take up his latest position but general merchandise has been blamed for “dragging down” Tesco’s UK performance, in a year which saw its first fall in profit for nearly two decades.
Price was in charge of general merchandise in both the UK and Central Europe and Neela Mukherjee, UK general merchandise director, will now take control of online and offline general merchandise across the division.
It is understood Price was close to retirement, which helped prompt the move, but that it also reflects Tesco’s shift towards online in the sector.
CEO Philip Clarke, formerly a close ally of Price, today issued a warning that the company had to continue innovating to stave off competition from the massive shift to the web, which has particularly hit its non-food business.
He told the FT Innovate 2012 event: “Be it nations or companies, if you don’t innovate; if you cling to the old way of doing things in the forlorn hope that the pace of change will slow; if you dare not take risks for fear of failure – if you do these things, then decline is inevitable.”
Authorities who raided one of the company’s warehouses discovered that the students, of almost a dozen nationalities, were working significantly longer hours than their visas allowed.
The breaches were revealed after immigration officials swooped on the Tesco building in Croydon, south London, in July. UK Border Agency (UKBA) officials arrested more than 30 of the students. Britain’s biggest supermarket was fined for breaking employment rules in its use of 23 workers.
The penalty follows Home Office operations to put a stop to “visa abuse”. A UKBA spokesman said the fine shows it “will not hesitate to take action against employers that break the rules”.
The disclosures will prove embarrassing to Tesco, which employs nearly 300,000 people across more than 2,500 stores in Britain.
UKBA officials decided against revoking any of the retailer’s licences “because they wanted to work with Tesco to solve the problem”, sources said.
Officials had discovered the students, who all had the right to work in the UK, had been working up to three-and-a-half times longer than their visas allowed.
Tesco said it has taken steps to ensure “an incident of this nature does not happen again”.
Separately, the management overhaul at Tesco continued on Tuesday with the departure of the executive in charge of the retail giant’s non-food business in the UK.
After just 18 months in the job, Terry Price, a former Wal-Mart executive, is to leave following the lacklustre performance of the division.
Neela Mukherjee, who runs Tesco’s online non-food business, will replace him by combining the role with her current duties.
PARIS – High-end US jeweller Tiffany & Co said Monday it plans to open a multi-storey megastore in 2014 on a prime location – currently occupied by a fast food restaurant – on the Champs Elysees avenue in Paris.
The firm – showcased in the 1961 film “Breakfast at Tiffany’s” starring Audrey Hepburn and which this year celebrates its 175th birthday – already has a store in the French capital in the upscale Opera district.
Its new site – a 976-square-metre (10,000-square-feet) premises at number 62 on the fabled avenue – is currently used by an outlet of the Quick restaurant chain to sell burgers and French fries.
The Champs Elysees hosts millions of tourists every year and sports a growing number of luxury outlets like the flagship Louis Vuitton store and US clothes retailers such as Abercrombie & Fitch and Banana Republic.
“Establishing this store on the Champs Elysees will be the ultimate symbol of Tiffany as a truly global luxury brand,” said the firm’s executive vice president Frederic Cumenal.
The company currently has shops in the Americas, Asia-Pacific, Japan, Europe and the United Arab Emirates.
Its biggest shareholder is Qatar’s sovereign wealth fund, which has a 5.2 percent stake in the retailer known for its diamond rings and blue, ribboned boxes.
Primark has continued to resist Europe’s economic woes after an “exceptional” year in which it racked up £3.5 billion in sales and created 10,000 new jobs.
The budget chain, which has 158 of its 244 stores in the UK, grew operating profits by 15% to £356 million in the year to September 15, parent company Associated British Foods has said.
Primark’s like-for-like sales were 3% higher, with UK trading “particularly strong” in the summer and Europe still buoyant despite tough economic conditions in three of its markets in Ireland, Spain and Portugal.
Nineteen new stores were opened in the year and a further 12 stores will have opened in time for Christmas, including a second store in Austria, while Primark plans to complete the expansion of its city centre stores in Manchester and Newcastle by the spring.
The business, which has doubled annual sales in the past five years, currently employs more than 43,000 people.
AB Foods – the owner of British Sugar as well as household brands Kingsmill, Ryvita and Twinings – said operating profits topped the one billion pound mark for the first time, up 17% at £1.08 billion.
Chief executive George Weston said: “These are very good results for the group and include exceptional performances from AB Sugar and Primark.”
America’s favourite casual dining restaurant continues Middle East expansion with Alshaya
Kuwait, 5 November 2012 -The Cheesecake Factory®, the award-winning and consumer favourite casual dining restaurant in the U.S.A., has made its much-anticipated debut in Kuwait. The occasion was celebrated at an official ribbon cutting ceremony hosted by David Overton, Chairman and Chief Executive Officer of The Cheesecake Factory Incorporated and Mohammed Alshaya, Executive Chairman, M.H. Alshaya.
The opening of The Cheesecake Factory in Kuwait follows on the brand’s successful Middle East launch in Dubai this August and continues its planned expansion across the Middle East with Alshaya, a leading international retail franchise operator in the region. The restaurant, occupying approximately 1,220 square meters with 475 seats, is located at The Avenues, Kuwait’s leading mall. Guests can enjoy The Cheesecake Factory dining experience Sunday through Wednesday 11.00 a.m. to 11.00 p.m., Thursdays and Fridays 11.00 a.m. to 12.00 midnight and Saturdays 10.00 a.m. till 11.00 p.m.
“The Cheesecake Factory’s arrival in the Gulf has been overwhelmingly positive, reflecting our great potential in the region and affirming our decision to expand into the Middle East as part of our global expansion. Our reputation and brand awareness are far-reaching, and we are delighted to be growing The Cheesecake Factory with Alshaya, which has a remarkable legacy of retail leadership,” said David Overton, Chairman and Chief Executive Officer of The Cheesecake Factory Incorporated.
“For nearly 35 years, The Cheesecake Factory has been known for menu innovation, food quality, ambiance and hospitality. Our menu features more than 200 selections and in keeping with our high standards, menu items will be made in-house, to order, using only the freshest of ingredients,” added Overton. “The menu also will offer our full line of award-winning desserts, including more than 30 varieties of cheesecakes and other baked goods. Guests will experience fantastic food served in an upscale ambiance within a casual setting.”
“The Cheesecake Factory has already made its mark in Dubai where guests have discovered the great food, wonderful service and inviting atmosphere that has made this restaurant renowned around the world. Now, in line with our objectives of introducing innovative new concepts and brands to consumers we are delighted to continue the expansion of this iconic brand into Kuwait. We look forward to welcoming guests to this beautiful new restaurant,” commented Mohammed Alshaya, Executive Chairman of M.H. Alshaya Co.
Alshaya’s exclusive licensing agreement with The Cheesecake Factory provides for the development of its restaurants across the United Arab Emirates, Kuwait, Bahrain, Qatar and the Kingdom of Saudi Arabia. The agreement also gives Alshaya the opportunity to expand The Cheesecake Factory into its other operating markets in the Middle East and North Africa, Russia, Turkey and Europe.
About M.H. Alshaya
M.H. Alshaya is a leading international franchise operator for over 70 of the world’s most recognised retail brands including Mothercare, H&M, Debenhams, American Eagle Outfitters, Boots, Starbucks, The Cheesecake Factory, M.A.C and Victoria’s Secret. The company operates more than 2,400 stores across 7 divisions: Fashion & Footwear, Food, Health & Beauty, Optics, Pharmacy, Home Furnishings and Office Supplies.
Alshaya’s stores can currently be found in 19 markets across the Middle East & North Africa, Russia, Turkey and Europe and it employs more than 32,000 people from over 110 nationalities.
The company has established itself as the industry leader across these territories through a combination of local market understanding and a comprehensive commitment to customer service. Growth in each of its operating divisions and brands is supported by continuous investment in talent and infrastructure. It applies best practices in retail operations, merchandising, marketing, information technology, logistics, real estate, human resources and financial controls.
M.H. Alshaya is the retail business of the Alshaya Group, which was founded in Kuwait in 1890 and today represents one of the most dynamic companies in the Middle East. In addition to its retail operations, the Alshaya Group is active in a number of other sectors including real estate, automotive, hotels, trading and investments. Learn more about the company at http://www.alshaya.com .
Marks & Spencer Group Plc, (MKS) the U.K.’s largest clothing retailer, reported first-half earnings that beat estimates and forecast an increase in profitability for the year as it offers fewer promotions.
Gross margins will be “towards the top end” of a range from unchanged to a 0.25 percentage-point increase, the London- based company said today as it reported a 5.8 percent drop in underlying pretax profit and said clothing sales declined at a more moderate pace in the second quarter.
Customers enter and exit the Marks & Spencer Group Plc store in Chester, U.K. Photographer: Paul Thomas/Bloomberg
The retailer is giving fewer discounts than last year and has increased supplies of popular advertised lines such as military coats, Chief Executive Officer Marc Bolland said on a conference call. M&S is struggling to keep pace with competitors such as Primark, the budget fashion chain owned by Associated British Foods Plc, which today reported a 15 percent increase in full-year revenue.
“General merchandise did show signs of a big pickup, but autumn-winter remains pretty key,” John Stevenson, an analyst at Peel Hunt in London, said by phone. “They made some basic errors with ranges, so we can gain comfort” from the rebound in sales, said Stevenson, who has a hold recommendation on M&S.
After falling 6.8 percent in the first quarter, same-store sales at the general-merchandise division eased 1.8 percent in the second three months, the retailer said. The gross margin in the U.K. widened 0.3 percentage point.
Marks & Spencer shares rose as much as 2.6 percent in London trading and were up 2.4 percent at 397.4 pence at 3:31 p.m. The stock has gained 28 percent this year.
Underlying pretax profit rose to 296.8 million pounds ($474 million) in the six months to Sept. 29, beating the 280 million- pound median estimate of 13 analysts surveyed by Bloomberg.
The retailer ordered five times as much stock of advertised lines compared to last year, and sold three times more of those items in the first four weeks of the season, Bolland said.
“We believe we’ve got good quality in stores and some excellent backing of trends out there,” such as baroque lace skirts, the CEO said on the call.
Still, the retailer needs to increase its focus on style, trends and quality to improve its general merchandise performance, Bolland told journalists.
Marks & Spencer intends to offer more fashionable clothing while keeping a high quality level to distinguish its offerings from those at competitors such as Inditex SA’s (ITX) Zara chain, the CEO said. “What we’re seeing is completely different, we’d like to be on-trend with a great quality to it, and that’s a different position.
“Have we been backing the trends sufficiently in the past? Probably not,” the CEO said. “We can do it better.”
Bolland said a successful Autograph-brand dress with military styling, offered at 55 pounds, is an example of the way forward.
“We’re not fast-fashion but we are certainly following fashion trends,” the executive said. “Some of the fast-fashion retailers bring out things against their quality that is also nearly disposable clothing and that’s what we don’t want to do.”
Marks & Spencer said sales growth at its food division accelerated to 1.6 percent in the second quarter from 0.6 percent in the first three months, outperforming the market.
Recent business has been “volatile” and M&S said it’s “cautious” about the outlook for the rest of the year. “People are a bit more wary now about payday,” Bolland said.
The CEO is 18 months into a three-year turnaround plan focusing on turning Marks & Spencer into an international, multichannel retailer. Concept stores with new beauty ranges, enhanced signage and online browse-and-order points have shown a 2.6 percent in increase in sales, the company said today.
Investors are “very, very supportive of us,” Finance Director Alan Stewart said on the call.
“The very clear message they give us is that they view their investment as an investment that they value for the long term, don’t be distracted from short-term market issues, don’t be distracted from your strategy and don’t be diverted,” Stewart said.
Marks & Spencer said yesterday that Frances Russell, the former director for lingerie and beauty, has been promoted to director of womenswear, while Victoria’s Secret Chief Creative Officer Janie Schaffer will join early next year as director of lingerie and beauty. The effect of the changes will be noticed when autumn and winter collections are introduced to stores in July next year, Bolland said.
The retailer also ruled out an online food offer as its typical basket size of a 20-pound top-up shop is not economical to deliver to home compared with supermarket chains that cater more to weekly shopping with 100-pound basket sizes. The CEO said M&S released 1,000 new food lines in the first half, and that the products are best seen in the store rather than online. A further 300 products are planned in the Christmas season.
Shoprite, Africa’s leading retailer, has set the end of November for the opening of its sixth store in Nigeria, Africa’s most populous country.
The South Africa-based retailer launched its first Nigerian store in December 2005 at The Palms shopping mall in Victoria Island Lagos, which was co-developed by Persianas and Actis. Shoprite has since opened businesses in different other parts of Lagos and expanded to Enugu state, and the federal capital of the country, Nigeria.
According to cp-Africa, the sixth store will be located at the newly constructed Kwara Mall in Ilorin, the capital of Kwara state.
The Kwara Mall which is said to be the fourth largest centre in the country is a joint venture between the Kwara State government and Persianas.
According to report, Persianas secured the financing, tenants, and development expertise, while the Kwara State government provided land as equity contribution.
Shoprite’s Kwara store boasting of a 3,700 square metre shopping space, will be as large as The Palms’ branch, and will have as neighbours a variety of international brands including KFC and Max clothing.
The store is harnessing the advantage of the peaceful state of Kwara which is naturally endowed with adequate vast and rich agricultural land. The store is in talks with local farmers and suppliers to ensure efficient delivery of agricultural products and services.
Shoprite is the leading retailer across Africa, offering the widest range of products with the highest standards of freshness and quality at the lowest prices. The retailer has planned more developmental projects for other parts of Africa’s second largest economy.
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.
Clothing company Ralph Lauren Corp (RL.N) reported higher-than-expected quarterly earnings on Friday as revenue held up despite growing anxiety about luxury sales.
Revenue fell 2.2 percent to $1.86 billion, but that decline was less steep than the company’s forecast of a mid-single-digit percentage drop, signaling that demand for higher-priced fashion held steady during the quarter.
Without the impact of store closings in China and the discontinuation of Ralph Lauren’s low-priced American Living brand, revenue would have risen 3 percent, the company said.
Ralph Lauren shares were up 2.8 percent at $163.56 in midday trading.
In October, rival Burberry Group (BRBY.L), which had given a profit warning the month before, eased concerns about the luxury market’s prospects when it said sales had steadied.
Sales at Ralph Lauren have suffered by its phasing out of stores and boutiques operated by local partners in China. It plans to replace the stores over time with company-run shops that it has said will be better spots that elevate its image.
The discontinuation of the American Living brand, which was dropped by low-price department store J.C. Penney Co Inc (JCP.N) earlier this year, has also hit Ralph Lauren’s sales.
Despite the strong results, the company said the difficult global economy was forcing it to be cautious in its planning and forecasts, so it lowered its outlook for the fiscal year ending in March.
The company now expects revenue to be up 2 percent to 3 percent, compared with a previous forecast for mid-single-digit percentage growth.
Chief Operating Officer Roger Farah told investors on a conference call that European business was “stabilizing,” but that it was too soon for a more optimistic forecast.
In the latest quarter, wholesale sales fell 8 percent, in part because Ralph Lauren shipped fewer goods to European stores. Sales at the company’s own stores rose 5 percent, even with the closings in China.
Farah also said that sales in Japan and Korea were weak.
For the current quarter, which includes the holiday season, Ralph Lauren expects a low-single-digit percentage revenue gain, with sales at its own shops vastly outperforming its business at department stores such as Macy’s Inc (M.N) and other retailers that carry its various brands.
This week, Hurricane Sandy forced the company to close 81 stores, about 20 percent of those it operates directly, and 12 were still shut on Friday. Still, Ralph Lauren said it expected only a “modest” impact on quarterly sales.
Net income fell 8.5 percent to $213.7 million, or $2.29 per share, in the second quarter ended September 29, from $233.5 million, or $2.46 per share, a year earlier.
Excluding one-time tax items, Ralph Lauren earned $2.45 per share, above the $2.15 Wall Street analysts were expecting, according to Thomson Reuters I/B/E/S.
UK retailer Marks & Spencer (M&S) has promoted lingerie and beauty head Frances Russell as its new director of womenswear as it realigns responsibilities within its general merchandise management team under executive director John Dixon.
Russell, who joined M&S four years ago, previously served as brand director of the Burton and Evans chains, which are part of fashion retail giant Arcadia.
To replace Russell as director of lingerie and beauty, M&S has tapped Victoria’s Secret chief creative director Janie Schaffer, who will join in early 2013. Schaffer, was responsible for all of the retailer’s clothing, lingerie and beauty products, and was also behind the launch of the Knickerbox brand.
In another move, former M&S womenswear trading director Annette Browne is to leave the company.
“Since joining the GM team in October, one of my priorities has been ensuring that we have the right leadership team and right structure to take us forward,” Dixon said.
“We are now all absolutely focused on delivering the right product for our customers.”
Chief executive Marc Bolland said the impact of the appointments will come into effect when the company launches its autumn/winter collections in July next year.
The new GM management structure is designed to realign responsibilities and ensure greater accountability by creating four larger trading departments.
Fashion retailer H&M is demanding that new clauses be added to its UK leases as it feels that shopping centres are poorly managed, it has been reported today.
The Swedish retailer is seeking additional clauses within its existing contracts, according to The Times, in order to streamline its international portfolio management.
It is claimed that H&M favours the terms of leases it holds in Europe and elsewhere and is calling for a clause to be added to any further leases in the UK which will see the amount of rent it owes be reduced if a shopping centre housing one its stores falls more than 15 per cent vacant.
H&M currently trades from over 2,600 stores across 48 countries though its demands have been met with frustration in Britain, The Times reported, as developers claim that such clauses may make it hard to secure development finance should the practice become widespread.
In response to the claims, an H&M spokesperson commented:” As a general rule, H&M never share information on agreements between us and a landlord/partner, we wouldn´t consider it good business ethics.
“We always strive to create mutually fair deals reflecting market conditions.
“Adding 300 new stores this year the H&M group is growing rapidly, and we see this as an indication that our lease structure works for both us and our partners.”
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NEW YORK – Estée Lauder Cos Inc on Thursday lowered the top end of its full-year sales forecast, pointing to uncertainty in some key markets, and reported quarterly sales growth that was slower than Wall Street expected.
The company, known for its namesake brand as well as lines such as La Mer and MAC, now expects sales this year will rise 6 percent to 7 percent on a constant currency basis, compared with an earlier forecast of a range of 6 percent to 8 percent.
“We are very mindful of the uncertain market dynamics in several countries,” Chief Executive Fabrizio Freda said in a statement.
Shares of New York-based Estee Lauder fell 2.6 percent to $60 in premarket trading.
The cosmetics maker also said that the board raised the dividend by 37 percent and authorized the repurchase of up to another 40 million shares, or about 10 percent of the total outstanding common stock.
Revenue in the fiscal first quarter rose 2.9 percent to $2.55 billion, dragged down by disappointing sales in Europe that included decreases in key markets like Russia and France.
“Sales growth is most important to the Estee Lauder story and the company’s guidance implies it is slowing,” Stifel Nicolaus analyst Mark Astrachan wrote in a note.
Other luxury companies to signal slowing growth trends include jeweler Tiffany & Co (TIF.N) and Burberry Group (BRBY.L).
Still, Estee Lauder reported a higher than expected quarterly profit, helped by large gains in the United States and China that helped make up for weakness in Europe.
Profit rose to $299.5 million, or 76 cents a share, in the first quarter ended September 30, up from $278.6 million, or 70 cents a share, a year earlier.
Excluding some restructuring charges, Estee Lauder had a profit of 79 cents, beating analysts’ estimates of 77 cents, according to Thomson Reuters I/B/E/S.
The company raised its annual dividend to 72 cents per share from 52.5 cents and said it would move to a quarterly dividend payout schedule starting in 2013.
LONDON (Reuters) – Marks & Spencer is expected to report lower first-half sales and profits next week, ratcheting up the pressure on its chief executive at a time when the retailer’s shares are on the rise thanks to bid speculation.
Although analysts expect second-quarter sales at Britain’s biggest clothing retailer to show an improvement on the first quarter, they also anticipate the 128-year-old firm will post an 11 percent fall in first-half profit.
That will not look good when compared to recent relatively positive updates from rivals Next , Debenhams and ASOS .
Marc Bolland, CEO since May 2010, has had a tough 2012.
In May he slashed M&S’ three-year sales growth target, blaming the recession, and in July he shook up his general merchandise management team after the group reported its biggest quarterly sales drop for 3-1/2 years, blaming wet summer weather and stock management issues that left stores short of bestselling womenswear lines.
In September Bolland told Reuters he had fixed these problems and insisted he was not feeling the heat from investors despite renewed talk of a possible bid for the group.
Shares in the company have risen 18 percent over the last three months, buoyed by persistent speculation regarding a possible offer from private equity or a sovereign wealth fund.
Some analysts have been critical of the investment required to deliver Bolland’s strategy of embracing multi-channel retailing – connecting with customers via many different types of channels including online – particularly in non-food, and selective overseas expansion.
At home, M&S sells clothes, footwear, homewares and foods from 730 stores to 21 million Britons a week, and has 390 stores in 44 countries.
“The promotional strategy in general merchandise is brand-damaging, in our view,” said Investec Securities analyst Bethany Hocking, referring in particular to what she sees as excessive promotions in clothing.
“We don’t see acceptable returns on 2.4 billion pounds ($3.9 billion) of capex FY13-15 and we expect bid spec, which has driven the shares higher, to die down.”
Analysts expect M&S to post on Tuesday a pretax profit before one off items of 250-305 million pounds ($402-491 million) for the six months to September 29, with a consensus of 280 million pounds, according to a company poll of 10 analysts, down from 315 million pounds in the same period last year.
General merchandise sales from its British stores open over a year are tipped to have fallen 2.5 percent in the second quarter, having slumped 6.8 percent in the first quarter.
Food sales are seen 1.5 percent higher, accelerating from growth of 0.6 percent in the previous quarter.
Key will be M&S’ outlook for Christmas, the busiest trading period of the year. The firm will be looking for an improvement on Christmas 2011 when unusually mild weather hit clothing sales.
British retailers are generally finding the going tough as consumers hold back spending in the face of inflation, meagre wage increases and government austerity measures.
British retail sales picked up more than forecast in October, a survey showed on Tuesday. However, one published on Wednesday said UK consumer confidence fell to its lowest in six months in October, highlighting the fragility of any recovery from recession.
Next week will shine more light on the strength of consumer spending.
On Thursday Britain’s No. 4 grocer Wm Morrison Supermarkets is expected to report that sales at stores open at least a year, excluding petrol, fell 2 percent in its third quarter, according to a company poll of analysts, having fallen 0.9 percent in the first half.
On Wednesday British luxury fashion brand Burberry , which issued a shock profit warning in September, is expected to post a first-half adjusted pretax profit of 167 million pounds, according to a company compiled consensus.
This compares to the 162 million pounds adjusted pretax profit it posted in the same period a year ago.
Primark-owner Associated British Foods will post its year-end results on Tuesday, with SuperGroup , the company behind the Superdry fashion brand, publishing an update on second-quarter trading on Thursday.
Abu Dhabi: Virgin Megastore, the regional entertainment, gadget and electronics store, opened its second outlet in Abu Dhabi on Thursday, making it the store’s 14th in Middle East and Gulf region.
The new store, located at Al Wahda Mall’s recently opened extension, offers a diverse and exclusive collection of music, movies, books, multimedia and accessories, Red Box merchandise and stationery. The first store, currently located at Abu Dhabi Mall, was opened in 2001.
Nisreen Shocair, President of Virgin Megastore Middle East and North Africa told Gulf News that it took the company this long to open its second outlet in the capital because it was difficult to find the right location and secure the space needed. “A lot of it had to do with the right development,” she said.
However, Virgin will be accelerating its growth in the capital, Shocair said, adding that there will be at least two new outlets opened within the next two years. The management is also looking at Al Ain for potential store openings.
Shocair said that a lot of the growth comes along with the growth in the real estate market and the new developments that are coming online in Abu Dhabi. “We’re not community based. If you’re in food and beverage, you can be anywhere. But we can’t do that. We have to remain a destination.”
The store will also look into organising events such as book signings or album launches especially with Arabic content.
“There’s a lot of interest in Abu Dhabi and Arabic content tends to do better in here.”
Shocair said that the growth has been “astronomical” for the store. “I would say we’ve doubled in size and in revenue if you compared 2008 to now .”
PVH Corp has agreed to buy apparel firm Warnaco Group Inc for about $2.9 billion, in a deal to bring all Calvin Klein clothing under its control.
Though PVH owns the Calvin Klein brand, underwear and jeans are controlled by Warnaco.
Warnaco’s Calvin Klein businesses will be moved to PVH and run by Tom Murry, chief executive of Calvin Klein following the cash and stock deal.
“Having direct global control of the two largest apparel categories for Calvin Klein — jeans and underwear — will allow us to unlock additional growth potential of this powerful designer brand,” PVH Chief Executive Emanuel Chirico said in a statement on Wednesday.
PVH, which also owns the Tommy Hilfiger brand, is offering Warnaco shareholders $51.75 in cash and 0.1822 of a share of PVH common stock for each Warnaco share.
Based on PVH’s last closing stock price, the per share value of the deal is $68.43, a 34 percent premium over the last closing price of Warnaco common stock.
PVH said it has commitments for $4.33 billion in financing from Barclays, BofA Merrill Lynch and Citigroup Global Markets Inc.
Selfridges is set to open what it claims to be the largest men’s shoe department in the world. As part of the company’s ongoing ‘Menswear Masterplan’, the 1,400 sq m space will feature more than 250 brands, bespoke brand boutiques and a made-to-order shoe salon.
Designed by Belgian architect Vincent van Duysen, the space is heavily inspired by the concept of residential interiors. Wooden parquet floors, dramatic oak panels, natural stone cladding and treated walls in a warm bone shade form the visual framework of the department, while each individual area has its own unique handwriting. Some of the store’s windows have also been opened up to allow more light into the space.
The department – now twice the size – features two new salons; one dedicated entirely to driving shoes and a new suite to house a luxury service for made-to-order footwear. The interior of the driving shoe salon is inspired by the bodywork of vintage Ferraris and features chrome detailing, leather seating and circular fixtures throughout to echo car wheels. Meanwhile, the design of the made-to-order salon looks to oriental living rooms for inspiration and uses low, relaxed seating layouts and partial screening to create intimacy for private clients.
David Walker-Smith, director of menswear at Selfridges, comments: ‘The new space is one of the cornerstones of our Menswear Masterplan – the ongoing development of men’s fashion at Selfridges. Our chief consideration when curating the space has been the idea of shopping by category. This is something we’ve observed our male clients doing more and more, so it feels like a natural progression to build the department around accommodating that shopping pattern. Our aim is to truly amaze our customers, and take ownership of core categories within our business by offering the very best international brands within bespoke retail environments.’
The department opens on Tuesday 6 November with a dedicated boutique for Christian Louboutin’s men’s collection due to open in February 2013.
Ikea has cut the price of home delivery from £35 to £15-£25. Photograph: Action Press/Rex Features
Ikea sales are booming in the UK as price cuts, cheaper home deliveries and a bigger online product range helped the world’s largest furniture retailer grab a larger market share.
The Swedish company said a £30m investment in its 18 UK stores and website had paid off, with like-for-like sales in the UK and Ireland climbing 6.3% to £1.2bn in the year to 31 August – the biggest increase in six years. It bounced back from a 3% drop in sales the year before when hard-up households put home makeovers on the back burner. Some 41 million people came through its doors in the past year, including more affluent shoppers looking for affordable furniture.
Ikea bucked the trend of falling big-ticket sales – the UK market as a whole was down 2.2% – and increased market share by 0.4% to 6.8%. Online like-for-like sales leapt 25% after a further 1,500 products were made available, taking the total on its website to 6,000 (out of Ikea’s 9,500-strong product range).
Carole Reddish, acting manager for the UK and Ireland, said the company had done more than 500 home visits in the past year and redesigned its shop floor displays, in particular bedrooms, to reflect people’s changing living situation. More grown-up children are coming back home after backpacking or university to live with their parents because they cannot afford to rent or buy their own home.
“You need a grown-up space rather than the teenage space that you left,” said Reddish. “Families are staying together longer or moving back together. More people are taking care of their [elderly] parents. We’re also living in very small spaces. We have a lot of stuff and don’t know where to put it.”
Like-for-like sales of bedrooms climbed 16.7%, after Ikea lowered the price of its most popular bedroom storage range, Pax. Prices were reduced by 0.6% overall, following a 5% reduction the year before. Ikea invested £4.7m in slashing the cost of home deliveries from an average of £35 to £15-£25. New in-store “pick and delivery” and “furniture take back” services were also launched.
As it celebrates its 25th anniversary in the UK, the company has sought to brighten up its functional stores by introducing workshops on how to personalise furniture and accessories, canapé-making classes ahead of Christmas and sampling from its Swedish food market.
Reddish said it was about “bringing theatre to the shopping experience”. The retailer also plans to introduce Wi-Fi.
Ikea has won planning permission from West Berkshire Council to build its 19th UK store in Reading – and aims to double the current number of outlets. It has revamped its Warrington store with a £1m new market hall, where smaller items are sold, and will roll out the new market halls to Manchester, London and the rest of its UK shops. The company did not release profit figures.
M&S is gearing up its multichannel and international expansion plans with the upcoming roll out of their online presence in four more European countries.
New websites will be launched in Germany, Spain, Belgium and Austria on 19 November. Although M&S currently retails to 80 countries through the international delivery option on their existing UK site, these four countries are the most popular delivery destinations.
The dedicated e-commerce platforms will provide a country specific customer experience, including local language, payment and delivery options. In addition, they will feature more than 15,000 M&S products, including kidswear, womenswear, menswear and a selection of homeware.
Earlier this year the British retail giant also re-entered the French market with local website and a flagship store on the Champs Elysee. They further plan to be operational in 10 international markets by the end of May 2013.
M&S is engaging in confident expansion plans to “grow its business and take its customer engagement in these markets to another level”.
Chief Executive of M&S, Marc Bolland, commented: “This is us moving forward with our plan to transform M&S from traditional British retailer to a leading international, multi-channel retailer. M&S is a brand that’s synonymous with British quality, style and value and this move enables us to extend the reach of our brand to more new markets.”
DUBAI: The USD 1 billion replica of the Taj Mahal that the developers are planning to build in Dubai will be four times bigger than the original monument.
The replica — Taj Arabia — will include one million sq ft of retail space besides a 300-room hotel.
According to Link Global, the company behind the project, there are plans to build a replica of the Taj Mahal in Dubai’s USD 36.5 billion FalconBSE -2.52 % City of Wonders — a multi-purpose project being developed in Dubai.
When complete, Taj Arabia will be four times the size of India’s architectural marvel in Agra, according to reports.
Link Global is also in talks with international hotel operators to manage the 300-room hotel.
“We are already negotiating with three or four (hotel) operators; we want to bring the best in. They are all international… one of them is not yet here (in the UAE) but is quite big,” the company’s Director Arun Mehra told Arabian Business.
The Dubai-based firm said it has been inundated with requests from jewellers and retailers wanting to rent retail space in the development.
“Around the Taj, we have wedding and romance as a theme … The gold and jewellery business in Dubai is multiplying every year so it will be jewellery retailers. We’ve had a huge response from the big players in jewellery wanting the prime spots,” he said.
The project is slated for completion in 2014. The infrastructure work for the project is almost complete with construction work on ground expected to begin in the first quarter of 2014.
Mehra said the project is unlikely to affect livelihoods of those living in Agra.
“The criticism is coming from a very small population around the Taj. It’s not going to affect their livelihoods with people coming to see the Dubai one instead of the original,” he said.