Monthly Archives: January 2013
HMV has announced 190 job losses according to a statement issued by its administrators Deloitte on Thursday.
However, Deloitte said that it remained optimistic about the UK entertainment products retailer’s future prospects. The global advisory firm is currently seeking a buyer for all or parts of the business.
Deloitte added that HMV retail outlets continue to trade as normal with no redundancies having been made across the chain of shops.
“We have been very pleased with the level of interest in the business as a going concern. I remain hopeful we will be able to secure a future for a restructured business,” said Nick Edwards, a joint administrator, on behalf of Deloitte.
On 22 January, restructuring firm Hilco acquired HMV’s debt from lenders Lloyds Bank and Royal Bank of Scotland. Deloitte said it was working closely with Hilco as it seeks “a positive outcome for the business.”
Hilco’s name has been touted around since HMV went into administration on 15 January. Hilco has form with HMV. In 2011, it acquired HMV Canada from the parent company for £2 million.
LONDON, January 31, 2013 — /PRNewswire/ —
John Lewis department stores has appointed Mark Lewis as Online Director. He will join the John Lewis Management Board (JLMB), reporting to Managing Director Andy Street.
Mark will take up the position on 4 March, joining from Collect+ where he has been CEO. Prior to this he spent six years at eBay in roles including UK Managing Director and European Marketplaces Director.
Andy Street, Managing Director, John Lewis, said:
“Mark is ideally placed to continue the growth and development of our online business. He brings insight and experience of the retail sector, and will be driving further innovation across both our website and omni-channel offer. We are all keen to welcome him when he joins in March.”
Mark Lewis said:
“I’m delighted and honoured to be joining John Lewis. In the rapidly changing retail environment I believe the John Lewis proposition and partnership model provide genuine and enduring advantages and I look forward to playing a part in writing the next chapter of the business.”
Mark will take on the leadership of the online team and assume responsibility for profitability and development of the retailer’s online channel. He will also lead the omni-channel development team, working closely with his JLMB colleagues.
Notes to Editors:
The John Lewis Partnership – The John Lewis Partnership operates 39 John Lewis shops across the UK (30 department stores and nine John Lewis at home), johnlewis.com and 288 Waitrose supermarkets. The business has annual gross sales of over £8.7bn. It is the UK’s largest example of worker co-ownership where all 81,000 staff are Partners in the business.
John Lewis – John Lewis, ‘Britain’s favourite electricals retailer 2012’* and ‘Best Multichannel Retailer 2012’**, typically stocks more than 350,000 separate lines in its department stores. The website stocks over 200,000 products focused on the best of fashion, beauty, home and giftware and electrical items including online exclusives. johnlewis.com is consistently ranked one of the top online shopping destinations in the UK. (http://www.johnlewis.com). John Lewis Insurance offers a range of comprehensive insurance products – home, car, wedding and event, travel and pet insurance and life cover – delivering the usual values of expertise, trust and customer service expected from the John Lewis brand.
Kingfisher, the FTSE 100 retail giant, said it had applied through the courts to put its nine large stores in the Republic of Ireland into examinership, a process similar to going into administration in the UK.
The group said that its losses in Ireland can no longer be sustained and that “in order to have a reasonable prospect of survival” it needs to close four of its stores and exit the relevant leases. Its appointed examiner, accountants PwC, will have the power to renegotiate contracts.
Kingfisher’s Irish stores, which currently employ around 690 people in total, have been badly hit by the country’s economic downturn, in particular the fall in consumer spending in the housing sector.
A weak housing market means that spending on home improvements tends to plummet, signalling pain for DIY retailers. While Kingfisher does not split out figures for its Irish business from the UK numbers, the Irish arm turned loss-making two years ago, while the UK stores have continued to stay in profit.
The company is understood to have already tried to reduce costs in terms of cutting staff hours and its marketing spend, and has spoken to its landlords about revising its rents – but with no real success.
Brian Mooney, chairman of B&Q Ireland, said: “The management team is hopeful that a sustainable business can emerge from the examinership process, based on a restructuring of the company.
“Our colleagues have been briefed on today’s development, and understand that the company’s objective in seeking the appointment of an examiner is to try to protect jobs and retain competition and consumer choice in the market. However, we cannot anticipate the outcome of this process which is subject to the examiner’s recommendations.”
Two stores have already been named for closure – Athlone and Waterford – in the papers Kingfisher supplied to court. If all four shut, it would be likely that around half the workforce go.
Kingfisher operates 1,000 around the world under various banners. Its shares fell 4.2, or 1.5pc, to 269.7p.
Pick n Pay, has developed two new stand-alone retail centres situated in Chatsworth, Kwazulu Natal and in Roodepoort, Johannesburg.
Pick n Pay, has developed two new stand-alone retail centres situated in Chatsworth, Kwazulu Natal and in Roodepoort, Johannesburg.
Both the Chatsworth Centre and Little Falls meet growing consumer demands for easy and quick access to retail centres in both metropolitan and outlying areas.
According to Marc Edwards, Managing Director of Spire Property Management, who handled the tenant leasing for these two new centres, there is an emerging retail trend towards stand-alone centres such as the Chatsworth Centre and Little Falls.
“Our view is that a number of similar shopping centres, where the main food retailer occupies the majority of the space with 8-10 complimentary line shops, will grow throughout South Africa. Shopping centres such as these allow consumers easy access to convenience stores with ample parking allowing for a quick visit or a longer, monthly shop.”
The development of these stand-alone centres is in line with Pick n Pay’s strategy to develop new retail channels and sites, thereby growing their national foot print and providing greater convenience for their customers.
“For the tenants in these Pick n Pay developed centres there are clear benefits,” says Edwards. “The biggest benefit being the location to the Pick n Pay store and access to the foot traffic generated by Pick n Pay. Another benefit is the tenant exposure, due to the layout of these centres. There are no “tucked away” spaces of “dead” retail areas which you may find in larger shopping centres.
Little Falls, an 8,800m2 centre which houses a Pick n Pay, Pick n Pay liquor, Pick n Pay Thyme restaurant and Pick n Pay clothing store, along with seven additional line shops and two ATMs, is the second new concept Pick n Pay centre, building on the popularity of the flagship Pick n Pay on Nicol in Hurlingham. These upmarket ‘green’ stores feature exceptional fresh foods, more imported lines than any other Pick n Pay and specialist ranges unique to these flagship stores, with additional features such as a wine boutique and cheese room within the Pick n Pay.
Spire Property Management was awarded the management contract to handle all aspects of tenant leasing for the Chatsworth Centre and Little Falls and worked closely with
Pick n Pay on all aspects of the leasing project, including initial area and tenant analyses, lease reporting, lease negotiations and finalisation and assistance with the tenant
installation and co-ordination process,” explains Edwards.
“We began the leasing process by ascertaining the ideal tenant mix and comparing this to neighbouring competition. The small size of the Pick n Pay centres and the limited
number of line shops available also meant that the tenant mix had to be chosen carefully to provide the best possible variety for consumers.”
The tenant mix for both is based on “destination” and “convenience” type shops to make these small convenience centres an all-in-one shopping experience. The line shops have been chosen to complement the Pick n Pay and affiliated stores without detracting from them.
“The reputation of Pick n Pay, being a popular and ethical competitor with a substantial national footprint, made the leasing easier in terms of interest received from other tenants and the procurement of a favourable tenant mix. The thorough market research performed by Pick n Pay in determining the feasibility of the centre allowed for the market demand to be evaluated and targeted accordingly, making the ease of letting that much more pronounced,” concludes Edwards.
British retailer Phase Eight will open seven stores in the UAE as it moves to boosts its international presence, the UK’s Retail Week reported.
The womenswear retailer, which opened its first overseas store last year in Switzerland, will initially concentrate on stores in Dubai, said a spokesperson.
“International growth is a key focus for Phase Eight over the next few years, and we recognise a significant opportunity to build our presence globally, through a multi-channel and multi-format approach,” a Phase Eight spokeswoman said.
“The pace of expansion has been ambitious but a resounding success.
“The four standalone stores in Switzerland have performed above expectations, demonstrating the success of our brand across different markets, ages and cultures,” she added.
Dubai is enjoying a retail and tourism boom with passenger traffic passing through its airport rising 13.2 percent to 57.6m passengers last year, overtaking Hong Kong International Airport to become the third busiest airport in the world.
Real estate prices have started to increase and GDP rose 4.3 percent last year, according to preliminary estimates.
The retail market has been boosted by shoppers from Russia, China and the Gulf. Emaar, owner of the world’s biggest shopping mall, said the number of visitors to Dubai Mall in 2012 increased by almost half a million people to 5.2m while the number of brands sold in its stores increased 25 percent.
Mothercare said that Mothercare Australia has been placed into administration after attempts to sell the business in the face of falling sales failed.
The UK company had already booked a £10.6m provision to write off its remaining investment in Mothercare Australia, which accounted for 7pc, or around £50m a year, of its international sales.
The British business owned 23pc of Mothercare Australia and a spokesman said it was “not appropriate” for it to comment further on the administration.
Sanjay Vidyarthi, analyst at Espirito Santo, said the Australian joint-venture was “loss-making”, adding: “Mothercare is not guiding to any material change in international profit guidance, suggesting that the franchise income was minimal.”
Shares in Mothercare fell by 3, or 1pc, to 326p.
The retailer, which owns Early Learning Centre, is also battling challenging conditions on UK high streets and reported a 5.9pc fall in like-for-like sales for the run-up to Christmas.
It emerged on Wednesday that Mike Logue, Mothercare’s UK boss, has been made redundant.
It is understood that Simon Calver, the former boss of LoveFilm who joined Mothercare as chief executive last year, wants to take direct control of the UK business and has clashed with Mr Logue in recent months.
Mr Logue had only worked for Mothercare for 18 months. He previously ran Asda’s homewear business Asda Living and video games retailer Gamestation.
Mothercare said the departure of Mr Logue was due to a “restructuring of senior management”.
Investcorp eyeing Italy luxury brands
Investcorp, one of the Middle East’s largest private equity firms, is on the lookout for Italian luxury and retail brands that want to expand internationally.
“We have spent a lot of time talking to the owners of some very well-known Italian brands and are always on the lookout for interesting brands with the potential to internationalise,” Hazem Ben-Gacem, head of corporate investments, Europe, said.
Ben-Gacem also told Reuters he was not too concerned about next month’s election in Italy.
“Italy has always had political risks. What we would like, however, is a stable environment where investors and businesses have clarity and confidence in the government’s intention.”
The Bahrain-based firm, which has stakes in French group PPR’s Gucci unit and US group Tiffany & Co, had US$11.5bn in assets under management as of end-June.
Italian luxury brands such as Giorgio Armani, Roberto Cavalli, Missoni, and Ermenegildo Zegna have been reluctant to sell and are still controlled by their founding families.
The need to expand internationally to counter the downturn in home markets has prompted firms such as Prada and Versace and to seek outside investors.
The strong performance of luxury brands has made them a target for cash-rich buyers seeking recognition as well as returns.
Economic uncertainty weighed on purchases of European brands last year. The number of acquisitions of western European brands by emerging market investors slowed 5 percent to 326 in 2012, according to Thomson Reuters data.
“I know that the common perception is doom and disappointment,” Ben-Gacem said. “Europe is a very complicated beast. But it is one where fortunes do change and we conduct our business in a logical and structural manner.”
Ben-Gacem said Investcorp would be more active in the region as the economy recovered and would continue to invest on a long-term basis.
In November, it bought Danish luxury retailer Georg Jensen for US$140m from Axcel Capital Partners.
In Italy, the company invested in Gucci in the 1990s and in the Riva yachting brand, part of Ferretti, in 1985.
It currently co-owns Italian firm N&W Global Vending, maker of snack vending machines, which it bought in 2008.
Investcorp said this month it would announce a new deal in early February, adding it would be an international company.
Hennes & Mauritz AB (HMB), Europe’s second-largest clothing retailer, reported a third straight drop in fourth-quarter profit as European consumers reined in clothing spending and the company invested in new stores.
Net income slid 1.3 percent to 5.29 billion kronor ($83 million) in the three months ended Nov. 30, Stockholm-based H&M said in a statement today. That beat the 5.2 billion-kronor average estimate of 16 analysts compiled by Bloomberg.
“H&M continues to stand strong in a challenging clothing market which in many countries has been even more challenging in 2012 compared to 2011,” Chief Executive Officer Karl-Johan Persson said in a statement today.
The profit drop halts a revival at the fashion retailer, which had reported earnings growth in each of the last three quarters after five consecutive declines. H&M makes most of its revenue from the euro-area, where governments are cutting spending and the jobless rate is at a record 11.8 percent as the economy continues to suffer from the sovereign-debt crisis.
“In the near-term, we believe continued subdued performance in some of H&M’s key western European markets will lead to muted like-for-like sales growth, limiting the company’s ability to expand margins,” Jamie Merriman, an analyst at Sanford C. Bernstein, said in a Jan. 23 note. “Over the medium- term, we see rising competitive pressure in the value apparel segment as well as rising input cost inflation in Asia.”
While H&M’s sales in the quarter including VAT gained 9 percent at local currency rates, the gross margin narrowed to 61.6 percent of sales from 61.9 percent as the retailer invested in new brands and its stores.
H&M fell 0.3 percent to 234.90 kronor in Stockholm trading yesterday. The stock has risen 4.6 percent in 2013, having largely stagnated over the previous two years.
“A rebound from current sales trends, optimism regarding a significant improvement in the profitability of the business, as well as the attractive prospects for continued growth long-term, is nearly fully reflected in the share price,” Richard Jaffe, an analyst at Stifel Nicolaus & Co. in New York, said in a Jan. 28 note. First-quarter results may be held back by “uncertainty regarding the economic outlook in the E.U. and U.S.”
H&M, which sold a collection by fashion house Maison Martin Margiela in November, said fourth-quarter same-store sales were unchanged. Comparable December sales dropped 2 percent, the retailer said.
The dividend for the year was unchanged at 9.50 kronor a share. The retailer plans to open about 325 stores this year.
The world’s largest online retailer on Tuesday night reported record sales in the final quarter of 2012, as more consumers did their shopping on the internet.
International sales, which includes the UK, jumped 20pc to a record $9.09bn (£5.8bn). That helped drive Amazon’s total sales in the quarter to $21.3bn, up 23pc from 2011.
“The market is underestimating the long-term international sales opportunity,” said Scott Devitt, an analyst at Morgan Stanley. January has already proved to be one of the most brutal months on record for British retailers, with HMV, DVD rental chain Blockbuster and camera group Jessops all collapsing into administration.
All three traditional brick and mortar retailers could not cope with competition from Amazon, and analysts say their failure will only feed the US company’s growth in Britain.
“The failure of high street players will just drive more people to Amazon,” said Neil Saunders at retail analysis firm Conlumino. “Now that Jessops has gone, if you want a camera, you’re more likely to go to Amazon.”
Amazon shares surged in after-hours trading in New York after the retailer’s operating profits of $405m comfortably beat a forecast the company gave Wall Street in October. The shares climbed 8pc to $282, as investors were cheered that the Seattle-based company is making money despite the billions of pounds it is investing in new warehouses. Mr Saunders said Amazon will continue to grow its share of consumer spending in the UK this year, heaping pressure on traditional retailers.
Amazon, which was founded by Jeff Bezos in 1994 as a bookseller, said that sales of electronic books surged 70pc, while sales of physical books saw their weakest growth in the company’s history. “We’re now seeing the transistion we’ve been expecting,” Mr Bezos said of the shift in book sales. Morgan Stanley estimates that by 2016 Amazon will have almost a quarter of an global online shopping market that will be worth $1 trillion.
While popular with shoppers, Amazon’s muscle in Britain is controversial due to the relatively small amount of UK corporation tax it pays. The company has paid just £2.3m in corporation tax over the past three years despite making £7.1bn in sales. David Cameron said last week that the public had had enough of companies that sell in the UK but use “ complex tax arrangements abroad to squeeze their tax bill”.
More than a dozen big shopping malls have sprung up in Doha and its outskirts over the past 10 years, and many more are on their way.
At least nine new shopping centres costing a whopping QR20bn are planned in the next three years, according to some reports.
The UAE-based Al Futtaim Group has announced plans to open Doha Festival City, its first shopping mall in Qatar, which is expected to cost QR6bn. Ezdan is planning three malls in Gharrafa, Al Wakra and Wukair under its new arm, Ezdan Mall Company, which will be launched soon.
The North Gate Mall, a luxury shopping facility in Khairtiyat, Marina Mall, Doha Mall in Mesaimeer and Tawar Mall are among the other projects in the pipeline.
Al Meera Consumer Goods, a leading Qatari company that runs a chain of shopping facilities across the country, has embarked on an ambitious expansion plan which includes opening of several new shopping malls.
Many of the existing Al Meera outlets are being expanded with a modern design.
Over the past decade, the opening of several shopping malls and hypermarkets has vastly changed the shopping scenario in Qatar. The traditional souqs and the multitude of neighbourhood stores that once dominated the market have lost their attraction with the arrival of big shopping centres that offer customers “everything under one roof”.
Following rapid urbanisation, the traditional souqs have become near extinct, with the renovated Souq Waqif and some remnants of the old souq being the only survivors. A number of neighbourhood stores in residential areas are also being closed down in accordance with a new rule that seeks their abolition.
“To facilitate our future expansion plans in the country, we are going for the shopping mall concept, which might be differentiated into two types: community and neighbourhood ones,” said Al Meera’s Deputy Chief Executive Officer, Dr Mohammed Al Qahtani, while unveiling the company’s expansion plans recently.
“Essentially, the community model can be described as a large-scale supermarket that, in addition to traditional groceries, will include additional services such as banks, food court, laundromats and so forth. The neighbourhood model is a convenience store catering to the immediate vicinity with groceries and basic services such as dry cleaners and pharmacies. Using this model, 2013 will see more Al Meera outlets opening throughout the country,” Al Qahtani said.
Al Meera has community and neighbourhood shopping centres covering more than 60,000 square metres already under development and most of them are expected to open in the next three years, he added.
The new facilities will be located in Al Laqtafia, Al Dakira, Al Wajba, Jeryan Njema, Muraikh, Azizia, Rawdad Al Qadeem, Muaither, Rawdad Al Hamama, and Al Wakra.
The state-backed Barwa Real Estate company has come out with an innovative shopping concept that was first introduced in the sprawling Barwa Village in Al Wakra. The Village offers a modern alternative to the traditional souqs and accommodated a number of shops relocated from the Meshaireb-Share Kahraba area where the Msheireb project is under way.
The eight-kilometre Barwa Commercial Avenue, which is nearing completion on the Abu Hamour-Industrial Area road, is one of the largest and longest shopping facilities in the world, offering a mix of commercial and residential space.
Looking at the burgeoning shopping malls and commercial complexes, one would wonder if there was scope for more such facilities, especially when many of the existing ones have failed to attract enough customers and are struggling to make profits.
Businessmen and consumers have varying opinions on this issue.
“I am in favour of opening more shopping malls. We need Al Meera to open big shopping malls and hypermarkets instead of competing with small supermarkets because they can cater to the low- and middle-income segments with relatively low prices,” leading Qatari businessman Ahmed Khalaf told The Peninsula.
He said he was against closing down stores in residential areas since they were providing an important service to the community.
“I visit a shopping mall two or three times a month, but I go to my neighbourhood grocery many times a day. I can also place orders to them by telephone and they will be functioning until midnight, while most shopping malls close earlier,” he added.
He said there was scope for more shopping malls in Qatar if they were located properly.
“Why are so many new shopping malls concentrated in some areas like Al Shamal road while important locations like Al Wakra do not have a single shopping mall or hotel?” Khalaf asked.
He said the location of new shopping malls should be based on the requirements of various localities rather than the interest of investors.
Mohammed Altaf, regional director of Lulu Hypermarket Group, said location was a vital factor in the success of a shopping facility but more important was how the facility was managed.
“Shopping malls will continue to flourish in Qatar and there is nothing unusual about it. But the success and survival of such facilities depends a lot on how efficiently there are managed and operated,” said Altaf.
He said there was no real competition between neighbourhood stores and big shopping malls because they provide services that were totally different in nature.
“The concept of shopping malls first gained popularity in the US, and then spread to the Far Eastern countries. In some European countries, commercial streets featuring branded products are more popular than malls. The extreme weather conditions in the Gulf is the main factor behind the popularity of shopping malls in this region, because they can provide all goods under one roof, along with recreational facilities for children and ample parking space,” said Altaf.
Mohamed Kateeb, Advertising and Marketing Manager at Carrefour, said, “It’s good if more malls and hypermarkets are coming. Of course, there will be more competition, but that challenge is good for business. It would be even better if new brands are being introduced, so people will have a better choice.”
Firoz Mohideen, General Manager of Hyatt Plaza, said good planning was necessary before establishing a new mall.
“We could see many malls coming up. But the authorities should ensure that they are properly distributed according to the population. At the end of the day, we should not be having just many buildings; they should be built according to the requirements of the country,” said Mohideen.
He said there was enough room for more shopping malls.
“They (the existing malls) are fully crowded during the weekends, and it shows the need for more malls. But the authorities should decide how many malls and what kind of malls we need. There is also high demand for retail space that is still in short supply,” he added.
Many residents The Peninsula spoke to said that for a lot of people, malls are a place to hang around rather than do shopping.
“There are not many places to go to in Doha, so people are forced to go to malls. But big malls are not found in all areas. We live in Al Wakra, and there are no malls there. And if you look at the existing malls, only the very popular ones are full and have all facilities. There are some with many closed shops, so just having many malls is not going to help you,” said Rajani Ranjoth, a housewife.
Aysha Ali, a Qatari youngster, argued against opening more malls with similar goods and facilities.
“Shopping malls are the most popular places in Doha. It’s good more of them are coming, so the places will not be too crowded. But shopping malls should be different from one another not only in facilities like restaurants and play areas, but also in things they sell. If the same things are going to be sold at the same price everywhere, it may not make a big difference,”
Anna Niclas, a European expatriate working in Doha for the last two years, said, “Here malls are popular because people have no other places to go. Malls have become places to hang around. Malls are overcrowded during weekends. If more malls are coming up, it could ease the crowding.
“In other countries, people go to malls to buy things, but here it is more to hang out and dine. When more malls are built there will be more choice, it gives the opportunity to get many things under one roof. Now more brands are being introduced in Qatar, so maybe it will be a good opportunity for the shoppers to have better choice.”
Mohamed Yousef, an Arab expatriate living in Doha with his family for over five years, said, “It’s true many new malls and hypermarkets have opened, and some are coming up. But not all of them provide a real shopping opportunity. There are some places where only the food court and the play area for children are crowded, not the shops.”
Despite the popularity of shopping malls, a number of citizens still opt to travel to neighbouring countries for shopping on a regular basis.
Asked about this, Abdullah Al Jafri, a Qatari consumer activist, said, “This is mainly because of the low prices there and the availability of some special items that cannot be found in the local market. Many Qataris travel to Ahsa and other border cities in Saudi Arabia to buy wedding items.”
Male and female retail employees in Saudi Arabia will be forcibly separated by a partition while working, according to the official Saudi Press Agency.
The strict guidelines contained in a memorandum of understanding between the Ministry of Labour and the Commission for Promotion of Virtue and Prevention of Vice (CPVPV), the kingdom’s religious police, states that the partition must be at least 160cm high and that retailers have 30 days to install them before risking punishment.
Saudi women have only recently been allowed to join the workforce, and only in restricted roles such as salespeople in lingerie and cosmetic stores or in government-run, all-female factories.
The Saudi Ministry of Labour has pushed to further open up the workforce to women, with the unemployment rate among Saudi females reaching 36 percent according to the Central Department of Statistics and Information. Saudi women account for only 7 percent of citizens employed by private companies.
Religious conservatives have put up a strong resistance, claiming that mixing genders at the workplace would lead to the Westernisation of Saudi society.
In December, CPVPV chief Abdul-Latif Al Alsheikh criticised the Ministry of Labour for failing to maintain a “good, clean environment” for women working at retail stores.
According to the Saudi Press Agency, this public criticism probably prompted the ministry to seek a compromise in order to continue implementing its policy to employ more women.
Saudi Arabia is one of the most conservative societies in the Middle East, employing strict gender segregation across much of everyday life.
Minister of Labour Adel Fakeih last year said resistance by religious conservatives was making it difficult to implement the ministry’s women employment policy, but he denied allegations of Westernising society. “We want to open a whole new world for women, and at the same time will be in tune with our culture with how we’d like our families to continue to be,” he told the Washington Post in November. “We don’t want necessarily to copy a Western lifestyle.”
Linked in Group: National Retail Federation
Subject: NRF Forecasts 3.4% Increase in Retail Sales for 2013
The National Retail Federation released its 2013 economic forecast today, projecting retail industry sales (which exclude automobiles, gas stations, and restaurants) will increase 3.4 percent*, slightly less than the preliminary 4.2 percent growth seen in 2012. The subdued forecast comes on the heels of a holiday season that went head-to-head with Washington’s political wrangling over fiscal concerns, shifting consumers’ spending plans downward. In the end, holiday sales in 2012 grew 3.0 percent.
Shop.org, NRF’s digital division, expects online sales in 2013 to grow between 9.0 and 12.0%. Online sales in 2012 during the months of November and December last year grew 11.1 percent.
“What we witnessed during the holiday season is an indication of what we are likely to see in 2013. Consumers read troubling economic headlines every day and look at their bottom lines at the end of the month, and they don’t like what they see,” NRF President and CEO Matthew Shay said. “Pushing fiscal policy decisions down the road will lead to even greater uncertainty, and will continue to impact consumers’ desire and ability to spend on discretionary items. The administration and congress need to pursue and enact policies that lead to growth and economic expansion, or it could be another challenging year for retailers and consumers alike.”
“Retailers will compensate for the drag on household spending this year by managing inventories and focusing on providing value for their shoppers through unique promotions in stores and online and exclusive product lines,” continued Shay.
A number of factors contributed to NRF’s 2013 economic forecast, including:
• Employment: The labor market continues its modest recovery but 2013 is not expected to result in meaningful acceleration in growth. As of December 2012, the unemployment rate has held steady for the last two months at 7.9 percent. Retailers on average employed 150,000 more workers in 2012, and the industry remains one of the biggest employers in the world.
• Income growth: Consumers are constrained by modest growth in income, and recent legislation passed in January increased payroll taxes for millions of workers, further limiting and Americans spending decisions.
• Housing: NRF expects the housing sector to continue to improve and the fundamentals for growth to see continued gains in 2013.
• Inflation: Price pressures continue to be contained. NRF expects the Consumer Price Index to increase 1.9 percent in 2013, below the 2.1 percent increase in 2012.
• Consumer confidence: Current consumer attitudes are likely weighed down because of the handling of the fiscal cliff and the increase in payroll taxes. We expect confidence to improve as the pace of the recovery accelerates in the second half of 2013.
“While it’s too early to know the full effect of higher payroll taxes, there’s no question that many consumers will feel some kind of impact from the change in their paychecks,” said NRF Chief Economist Jack Kleinhenz. “That said, consumers have in the past shown a resiliency in the face of uncertainty, and we expect those impacted to adjust to smaller budgets by trading down or simply cutting back on certain items. Overall we foresee some improvements in the second half of the year should the outlook for job creation and income growth improve.”
* Retail industry sales according to NRF include most traditional retail categories including auto parts and accessories stores, non-store categories, discounters, department stores, grocery stores, and specialty stores, and exclude sales at automotive dealers, gas stations, and restaurants.
Posted By Steven Glover
M&S has 14 stores in China, including one on the upmarket West Nanjing Road in Shanghai, and has identified the country as a key overseas market for growth.
However, it is understood that sales at the company’s stores in China have been up to 30pc lower than internal targets set by executives.
M&S declined to comment on its internal targets in China, but claimed the stores are “trading well”.
Earlier this month, the 129-year-old retailer warned it had suffered a 3.8pc fall in like-for-like sales in the run-up to Christmas in the UK, which was well below City expectations.
M&S was forced to issue the sales figures the evening before they were scheduled after the key sales figures were leaked.
In the Christmas trading update, M&S said international sales rose 4.1pc.
The company did not break down sales for individual countries, but said its performance had been impacted by currency movements and “macro-economic weakness” in Ireland and Greece.
Marc Bolland, chief executive, said M&S’s key international markets of India and China “continued to trade well”.
When Mr Bolland took charge of M&S in 2010 he set out a three-year strategy to develop the retailer into an “international multi-channel retailer”.
Shares in the company fell by 2.7, or 1pc, to 381.6p on Monday.
Lavazza Espression appoints Cushman & Wakefield to advise on UK expansion
Lavazza Espression, a new and innovative coffee shop concept from Italian brand Lavazza, has appointed property consultant Cushman & Wakefield to advise on its expansion across the UK.
Launched in 2007, Lavazza Espression is a new coffee shop concept from Italy’s number one coffee brand where customers can enjoy the brand’s legendary coffee with quality Italian food and a broad selection of over 40 non-alcoholic and alcoholic beverages in a fresh and contemporary space.
Lavazza Espression’s only current standalone store can be found at Trafford Centre, Manchester but it will shortly open in Westfield Derby, Trinity Leeds, London and Newbury. Lavazza is looking to roll out the concept across the UK and has appointed Cushman & Wakefield to search for units in up to 400 new locations in the next 10 years.
Specifically, 50 stores are planned to open in Greater London in the next three years. Lavazza will open its first shop in the Capital on Villiers Street in April and on Cannon Street in June.
Cushman & Wakefield will help Catalyst Retail, the UK and Ireland’s master franchisee for Lavazza Espression, to secure prime high footfall locations on high streets, regional shopping centres and tourist destinations. Units of 1,400 to 2,000 sq ft are being sought with a preference for single level units and ideally corner locations. Small units will be considered in Central London.
Cushman & Wakefield partner Matt Ilingworth said: “Lavazza Espression is a new and exciting concept which will give UK customers a real taste and experience of Italy on their doorstep. The concept really offers something unique among other coffee brands and we see it becoming a favourite on our high street and in shopping centres throughout the UK.”
Zee Report::Fashion news M·A·C Launches Flagship on the Champs-Élysées
The Champs-Élysées in Paris is one of the most famous streets in the world and the most valuable retail artery in Europe. Come February 2013, M·A·C Cosmetics joins the legion of luxury retail and fashion names lining this exclusive strip with the opening of the brand’s third global flagship location following the success of Times Square and Fifth Avenue, New York.
“As a trendsetting brand, we have been waiting for just the right opportunities to present themselves in these fashion capitals,” says Karen Buglisi, Global Brand President, M·A·C Cosmetics. “We anticipate these to be high volume doors for the brand, due to the large number of visitors they attract from around the world. Each year, approximately 167 million people travel to the Champs-Élysées.” Business expansion model aside (the fact that the 128 stores housed on the Champs-Élysées generate a sales turnover of 1 billion euro per year is hard to contest), as a branding strategy, M·A·C’s decision to invest in the Champs-Élysées is specific: in a move far ahead of the creative and commercial curve of its competitors, the Champs-Élysées flagship demonstrates M·A·C’s ability to react and respond to trends in consumerism in a manner unrivalled by any other cosmetics brand.
Firstly, Paris is internationally synonymous with style and creativity, drawing a multicultural audience impressionable to the city’s fashion capital heritage. Every season, between the fashion capitals of New York, London, Milan and Paris, M·A·C supports over 200 shows, from emerging to established designers. Living and breathing fashion and trend is an inherent part of M·A·C’s DNA. Opening a distinctive, prominent and impressive flagship store in the fashion capital of the world only strengthens the brand’s fashion message and trend authority. Indeed, “our global flagship strategy supports the idea that M·A·C behaves more like a luxury fashion brand, but captures a much larger audience as a result of our commitment to creating products that appeal to All Ages, All Races and All Sexes,” explains Buglisi.
Secondly, the Champs-Élysées, particularly for the French, represents the quintessential celebration location and global focus for the city. No other locale in Paris can match the visibility, traffic and prestige of an address on the Champs-Élysées. “No makeup brand is more global and more equipped to cater to such a diverse and important audience than M·A·C,” adds Buglisi. “This new flagship store will make an incredibly strong, very exciting brand statement.” Hence the 362m2 (total space) store, which M·A·C has developed over two floors at 78 Champs-Élysées.
In respect of design, the Champs-Élysées flagship is unique. “There’s a look and feel to M·A·C’s design aesthetics but the cultural and spatial context of every M·A·C store is always thought about sensitively. We don’t ever want to be ‘cookie cutter’,” explains James Gager, Senior Vice President, M·A·C Cosmetics. “Despite being in Paris, we did not want to evoke anything particularly cultural with the store design. The focus was on giving the structure a sense of magnificence, working with the fact that architecture in Paris is innovative and risk taking,” he explains. “Which is why we decided to make this amazing shell within the store,” explains Gager of ‘the dome’ – a cascade of black mirrors which plays with the grandeur of the double-height space. The dome “reflects and refracts the graphic and colour-saturated LED animations projected in the store, fragmenting their shades and shape. The idea is that they generate a visual interest at street level which captures the imagination and draws people inside,” he explains. “The rest of the store design is very simple, but with the dome we wanted to gain attention in an appropriate way, to create real ‘wow’ factor. M·A·C is a very theatrical brand and we wanted to reflect that.”
“Consumers in such high traffic destinations as the Champs-Élysées demand spectacle and a level of elevated aesthetics. We therefore strive to create unique spaces that individually feel important, inspirational and striking,” continues Gager. “It’s about creating a memorable architectural experience as much as a memorable M·A·C experience.”
Always mindful of the brand’s founding principal – All Ages, All Races, All Sexes – over 30 makeup Artists will be working at the Champs-Élysées with an international profile, relevant to a mix of consumers via language, experience and background. The presence of so many Artists is demonstrative of the fact that M·A·C is, first and foremost, an artistry-led brand.
“We don’t have ‘beauty consultants’…we have Makeup Artists,” confirms Gordon Espinet, Senior Vice President, Artist Training and Development, M·A·C Cosmetics. “What makes the M·A·C experience so unique is that we have extreme diversity in the people who work with us. However, irrespective of age, language, culture, background or ethnicity, they are all genuinely passionate and talented makeup artists who have an innate desire and ability to positively connect with consumers and constantly rethink the potentials of makeup.”
Vital to this point is M·A·C’s ethos of internally promoting and retraining its Artists, which equates to an extremely low turnover rate. “We educate our Artists and certify them,” explains Buglisi. “The Artist behind the counter is our first customer: if you can convince them and inspire them, they will share that with customers. Hence, what we can offer to the consumer feels different from what the consumer gets from another brand that has a higher rate of turnover.”
Speaking to the fact that the Champs-Élysées recruits consumers from all over the world, the product offering at the flagship has an equally multicultural relevancy. In addition to the full M·A·C range (over 1200 SKUs including new colour collections and M·A·C store-only exclusive collections), additional product collections with a global appeal, previously only available to specific M·A·C markets, are also a compelling offering.
With 360-degree consumer engagement via the ultimate in high-touch and high-tech retailing in mind, the M·A·C Champs-Élysées flagship features innovative retail experiences such as the first Lash Bar in France (the full selection of lashes are displayed and back-lit on a vertical surface at worktop height, enticing customers to play with their picks of lash looks) where all lash-essential accessories and products are readily to hand.
The 12 makeup stations (eight in a central hub on the ground floor, two more in the VIP area and in the private makeup area) have a bespoke feel with professional lighting and fully adjustable seating, while the continual animation around collections makes for an immediate and tangible way to step in and experience the brand. The focus is clearly on attracting customers in and inviting them to stay. “We are trying to be more cognizant of the customer who wants to play for a while,” says Gager.
The Champs-Élysées flagship will also serve as an industry event space. Key functions include the flagship forming an ‘industry hub’ for editorial broadcasting activity, filming and VIP appointments, hosting PR events for bloggers and makeup applications for local and global media during Paris Fashion Week, in addition to serving as a venue for Masterclasses and M·A·C’s seasonal Trend Presentations.
In keeping with the brand’s strong alignment, and support of, the industry as a whole, the store will tune in to M·A·C’s strong relationships and involvement with French cinema and film festivals by participating in related events on the Champs-Élysées via in-store animation, premiere parties and makeup appointments. With many of Paris’s famous nightclubs nearby, local French socialites will also be invited in for pre-party makeup applications, complete with an in-store DJ on occasion.
“What we have created with the Champs-Élysées’s store – as with our other flagships – is a unique and special retail experience,” concludes Gager. “Addressing the shopper is the best way for the brand to evolve. As our flagships demonstrate, as our customers evolve, so will we. We are a brand that always likes to keep moving.”
Marks & Spencer (M&S) has announced it is to open a two-day Oxfam pop-up ‘Shwop Shop’ at its flagship Marble Arch store on Thursday.
M&S said the Shwop Shop will be a one-of-a-kind secondhand store that will sell the best items donated to the retailer’s sustainable fashion initiative, Shwopping, from the public and famous faces from popular culture. To enter the Shwop Shop, visitors will have to ‘shwop’ – hand over an unwanted item of clothing, using old or unused clothes as their ticket to the exclusive sale.
Items from Gary Barlow, Alexa Chung, Caroline Flack, Daisy Lowe, David Gandy, Rosie Huntington-Whiteley, Gemma Cairney, Plan B, Lauren Laverne, Pixie Lott and Joanna Lumley will be on sale at the store.
M&S head of Plan A Delivery Adam Elman said: “The Shwop Shop is a celebration of Shwopping. Fashion influencers, designers, stylists, thought-leaders and visionaries have given their sign of approval by donating their unwanted items and we hope this will inspire a new generation of shwoppers who see fashion and sustainability as one. The aim is to change people’s attitudes towards clothes recycling and give unwanted garments a future.”
The celebrity shop will be staffed by a host of famous faces throughout the two days including Shwopping ambassador Joanna Lumley, who said: “By opening your hearts, minds and your wardrobe and going shwopping, you can not only bag an outfit worn on the red carpet or to a glitzy awards evening, but help the environment too.
“Fashion with a conscience, it is perfect isn’t it? By shwopping all we want you to do is give your unwanted items stuffed in the back of your wardrobe a future. Simply bring an old item back every time you buy a new outfit, shwop and shop! Come to the Shwop Shop, shwop and shop and leave with a smile – the world will then feel a better place!”
Shwop Shop will open from 10.30am – 9pm on Thursday 24th & 9am – 9pm on Friday 25th January 2013. Address: Ground Floor, Marks & Spencer Marble Arch, 458 Oxford Street, London W1C 1AP.
Jan 28 (Reuters) – Irish retail sales fell 1 percent in December, their sharpest annualised fall in five months, as weak car sales dashed hopes of a Christmas boost to the struggling economy.
The weak festive period highlights the country’s dependence on exports by multinationals to provide economic growth as high unemployment and austerity weigh on the domestic economy.
“It doesn’t augur well for 2013,” said Alan McQuaid, chief economist at Merrion Stockbrokers. “It looks like another tough year ahead and the main driver will again by exports rather than domestic demand.”
If car sales, which fell 22 percent, are stripped out, sales volumes were up by a modest 0.8 percent on a year earlier.
A hike in car sales in December 2011 as people avoided a year-end value-added tax hike appears to have contributed to the relative weakness a year later.
Strong sales at department stores, which were up 6.5 percent on the year, and electrical goods up 4.1 percent prompted some retailers to predict one of the best Christmas period’s in years.
But other areas proved weak including furniture, down 10.5 percent on the year, and clothes which saw volumes fall 2.6 percent.
Retail sales were 1.1 percent down over the whole year compared to 2011, in line with the average forecast of economists polled by Reuters .
“This is a poor outcome given anecdotal evidence of aggressive discounting by retailers through December,” said Conall MacCoille, Chief Economist at Davy Stockbrokers.
“Excluding the exceptionally weak 2010, December’s retail sales volume figures were the worst since 2002,” he said.
Retail volumes were adjusted up to 1.2 percent month-on-month in November from a provisional reading of 1.1 percent. They fell 0.2 percent on an annualised basis in November, compared to a provisional estimate of a 0.5 percent fall.
* Aims for $1 billion Middle East revenues in 5-10 years
* Looking at UAE, Qatar, Lebanon, Saudi and Oman
* Partnering with Abu Dhabi Cooperative Society
ABU DHABI, Jan 27 (Reuters) – Dutch food retailer SPAR International plans to enter the Middle East, aiming to have 30 stores in the region by the end of 2015, its managing director said on Sunday.
The company, which says it has over 12,000 stores worldwide, will have eight stores in Abu Dhabi, two in Qatar and one in Lebanon by the end of this year, Gordon Campbell told Reuters.
SPAR plans to expand further in the United Arab Emirates and is also looking at entering Oman and Saudi Arabia over the next three years, he added.
“Our focus will be on a range of fresh foods and the convenience of food to go and food to stay, with a seating area in the compact stores,” he said.
The UAE, where expatriates far outnumber local citizens, already has international retailers such as Carrefour and Geant as well as locally developed brands such as Lulu, so competition is intense. But Campbell said there was still room for growth.
“Wherever we go, they say the market is saturated. The reality is the food market is evolving always with new ideas and concepts,” he said.
SPAR’s unique selling point will be its convenience stores and large supermarkets of around 1,800 square metres; other retailers in the region have focused on hypermarkets with sizes of around 10,000 square metres, Campbell said.
The Dutch firm is partnering with Abu Dhabi Cooperative Society , a local retailer, for its Middle East entry and expansion.
SPAR expects its Middle East operations to generate revenues of over $1 billion in five to ten years, Campbell said. The company expects its global turnover to have hit $43 billion in 2012, up 4.5 per cent over the prior year, he added.
Austria and Norway are its biggest European markets in terms of revenue while Australia, South Africa and China are major markets. By the end of 2015, SPAR projects turnover will hit $50 billion as it expands into new markets.
Saudi-based consumer electronics retailer eXtra has posted sales of more than SR3bn ($800m) in 2012, 22.5 percent higher than the previous year.
The company, also known as United Electronics Company, said the improvement in performance was due to increased sales across all of its stores which grew from 24 to 29 branches in 2012.
The retailer said its net profit for the year reached SR158.6m, an increase of 20.1 percent compared to 2011.
Total sales for the fourth quarter of 2012 were SR964m, an increase of 33.2 percent, driven in part by steady growth in sales across product categories, eXtra said in a statement.
It added that net profit for the fourth quarter stood at SAR58m, an increase of 41 percent compared to the same period in 2011.
On January 3, eXtra expanded its presence with the launch of operations in Bahrain, its first store outside of Saudi Arabia.
This was followed with the opening of eXtra’s first store in Oman.
Abdullah Abdulatif Al Fozan, chairman, United Electronics Company, said: “As the results demonstrate, 2012 proved to be an outstanding year for eXtra as it further consolidated its market leadership position in the electronics retail space in the kingdom.
“Our network expansion strategy, coupled with our strong ability to meet the burgeoning customer demands, has enabled eXtra to continue to lead the kingdom’s consumer electronics sector.
“As we expand our operations in other GCC states, we are confident that 2013 will prove to be yet another successful year that will mark the next phase of the growth journey for Extra. For 2013, we anticipate to register growth in sales and profit of approximately 20 percent.”
Last month, the company said that subject to regulatory approval, the company will increase its capital by six million shares, raising the company’s current capital from SR240m ($64m) to SR300m.
Wall Street is forecasting that Amazon enjoyed larger than ever revenues of $22bn for the December quarter. Photograph: Sarah Lee for the Guardian
Record Christmas takings have swollen Amazon’s cash pile to as much as $9bn (£5.7bn), the online retailer is expected to declare on Tuesday in results that will inflame the debate over its tax contributions around the world.
In just 13 weeks, Amazon’s savings, which are held in cash and investments, have ballooned to between $7bn and $9bn, from $5.2bn in September, say analysts. The group’s performance helped topple a number of its UK high street competitors, with the camera shop Jessops and music store HMV going into administration earlier this month.
The UK generates an estimated 10% of Amazon’s revenues, pushing the proportion of the cash pile collected in the British Isles to an estimated $900m.
The retailer is under fire for paying low levels of corporation tax in the UK and other markets. With politicians across Europe casting about for ways to restore public finances, the sums are eye-catching. The issue will be forefront this week as parliament’s influential public accounts committee resumes its inquiry into tax avoidance by taking evidence on Thursday from the four largest accounting firms.
In the sights of many MPs are the major US companies that use a complex web of offshore havens to minimise their tax payments. Filings by Apple have revealed it is putting $1bn a week beyond the reach of the UK and US tax authorities. The iPhone maker has amassed $11bn in offshore havens in the last three months of 2012 and shielded $94bn from tax authorities around the world, mostly since 2005 when iPhone sales took off.
Wall Street is forecasting that Amazon enjoyed larger than ever revenues of $22bn for the December quarter. The retailer continued to win market share from high street retailers over the festive season, according to RJ Hottovy, an analyst at the US broker Morningstar who puts Amazon’s reserves at between $7bn and $8bn.
“Governments are looking to corporations more and more and re-evaluating what the appropriate tax balance should be,” said Hottovy. “It’s a very real risk for the company, but Amazon, given they have low costs and a sizeable cash position, will be well protected.”
The broker Sanford C Bernstein forecast $8.5bn in December, but says the total may have altered because the company has increased its debt. Debt payments can be offset against profits to minimise tax bills. Recent acquisitions may also have eaten into cash.
Morgan Stanley calculates $9bn in savings, with $6.8bn in cash and the balance in short-term investments such as shares, government debt and corporate bonds.
At the last count, more than $3bn was held in foreign currencies, including euros, sterling, Japanese yen and Chinese yuan.
In three years from 2009 to 2011, Amazon earned more than £7bn in the UK but paid just £2.3m in corporation tax, despite employing 15,000 people in the country, thanks to a scheme which drives sales through a European head office in Luxembourg.
Its most recent published earnings are for 2011, when the UK generated £3.35bn in sales, around a tenth of its $48bn in worldwide sales.
Amazon said in its latest filings that it is already being pursued for unpaid tax by the US and French governments. It faces $1.5bn in additional federal taxes over a seven-year period, beginning in 2005, at a time when company accounts show it began to amass large amounts of cash in Luxembourg. Amazon did not respond to requests for comment.
Like Google, Starbucks and other multinationals, Amazon and Apple legally funnel revenues out of countries such as the UK and France through payments to subsidiaries, typically in the form of loans or royalties for intangibles such as use of the brand or technology developed in-house.
France served notice in September for unpaid tax totalling $252m, including interest and penalties, for the years from 2006 to 2010. As to the UK, and a number of other countries, Amazon’s filings state it is or may be subject to investigations going back as far as 2003.
Prem Sikka, professor of accounting at Essex Business School, said HM Revenue and Customs could claw back some of Amazon’s savings by checking whether payments between its companies for items such as royalties were set at a fair price.
“Part of the reason for these cash piles is that companies have participated in complex structures and avoidance schemes to shelter profits from UK corporate tax, and there is no reason why HMRC cannot investigate this. HMRC is perfectly entitled to challenge the basis of any calculation.”
He warned against leaving aggressive tax schemes unchecked: “If you erode the tax base you can’t have any form of effective government. We have allowed a very deep tax avoidance industry to become established and once an industry is established it becomes very difficult to get rid of it.”
A new AED1bn (US$272m) retail, residential and hotel development launched on Abu Dhabi’s Al Maryah Island is forecast to be completed in early 2017, it was announced on Sunday.
Sowwah Central will be a mixed use development featuring a 214,000 sqm shopping centre and adjoining hotel and residential towers on Al Maryah Island, Abu Dhabi.
The project is set to open in spring 2017 and will be connected to 51,000 sqm shopping and dining project The Galleria at Sowwah Square, both of which are being developed by UAE-based Gulf Related.
The Galleria, which will feature brands such as Louis Vuitton, Cartier, Prada, Gucci and Bulgari when it opens in August 2013, today announced the addition of 48 more fashion brands to its portfolio, including Dior, Fendi, Burberry, Ralph Lauren, Tag Heuer, Jimmy Choo and Diane von Furstenberg.
Its 25 food and beverage outlets will also include an Armani Caffé and licenced waterfront restaurants and cafes. Sowwah Central will be anchored by two international department stores, with both Gulf Related Al Maryah retail projects containing a combined total of over 500 retail, leisure, dining and entertainment options.
Gulf Related has worked on a number of high profile American projects, including the Time Warner Center in New York, CityPlace in West Palm Beach and Manhattan’s Hudson Yards, the largest private development in the USA.
Sowwah Central and The Galleria will be part of the first phase of a larger 1.5m sqm masterplan being developed by Mubadala Real Estate & Infrastructure (MREI) and which will also include four commercial towers, Abu Dhabi Securities Exchange (ADX), Rosewood Hotel and Four Seasons Hotel, the Cleveland Clinic Abu Dhabi and 15,000 parking spaces.
Gulf Related is a partnership between asset management firm Gulf Capital and Related Companies, one of the US’s largest private real estate development and investment firms.
Earlier this month, Abu Dhabi announced it was planning to spend AED330bn (US$89.9bn) on large scale infrastructure and housing projects.
At the same time, real estate agents Jones Lang LaSalle forecast that all four major real estate sectors in the UAE capital are set to see growth in 2013.
LINGERIE giant Victoria’s Secret has bared all and unwrapped its first UK airport Beauty and Accessories store at Stansted this week.
Located in the international departure lounge, the store gives passengers access to tax-free savings on an assortment of its beauty and body care products, fragrances and make-up kits.
Also on offer is the American firm’s collection of chic branded accessories, including cosmetic cases, bags, wallets, passport covers and phone cases, as well as a range of underwear.
Head of in-terminal commercial for Stansted Airport, Zoe Farmer, said: “Departure lounge shopping for many of our customers is part of their overall airport experience, and so we’re delighted to add one of the world’s most well-known brands, Victoria’s Secret, to the list of international stores at London Stansted and we hope passengers enjoy their range of fabulous products.”
MILAN – Italy’s luxury shoemaker Tod’s said on Wednesday sales rose 7.8 percent in 2012 to 963.1 million euros ($1.28 billion), helped by a good performance in Greater China.
The results were roughly in line with a Thomson Reuters Starmine forecast for average sales of 966 million euros.
The maker of leather loafers has boosted its international footprint to reduce exposure to recession-hit Italy, where sales dropped 14.5 percent in the period.
“I am confident about 2012 group’s net results, which I believe will be higher than the outstanding level reached the previous year,” Tod’s Chairman and CEO Diego Della Valle said.
Sales in Greater China accounted for about 19 percent of overall revenues in the year, the company said.
Sales in North America rose 31 percent while those in Asia and the rest of the world were up 48.7 percent.
Luxury stocks, including world number one and domestic peer Salvatore Ferragamo, have rallied since the start of the year on hopes of demand recovery in China but concerns remain about a deep slowdown in southern Europe.
Coach Inc. (COH) plunged the most in more than five months after the largest U.S. luxury handbag maker reported fiscal second-quarter profit that trailed analysts’ estimates, hurt by lower demand in North America.
Coach Inc. fell to $53.50 at 7:25 a.m. in New York. Photographer: Mauricio Piffer/Bloomberg
Coach fell 14 percent to $51.92 at 9:42 a.m. in New York, after earlier dropping as much as 17 percent for the biggest intraday decline since July 31. The shares dropped 9.1 percent last year compared with a 25 percent gain in the Standard & Poor’s 500 Retail Index.
Chief Executive Officer Lew Frankfort said the company had a “challenging” holiday season amid economic pressure on consumers and increased competition in the women’s handbag category. Sales at stores open at least a year in North America dropped 2 percent in the quarter. Coach also said sales at U.S. department stores were “modestly below” the previous year.
“The 2 percent decline in comparable sales is disappointing along with weakness in the wholesale division,” Corinna Freedman, an analyst with Wedbush Inc., said in a phone interview today. “We saw greater competitive threats, and at Coach’s price points under $300, their consumer is probably being squeezed by the economy.”
Net income rose 1.5 percent to $352.8 million, or $1.23 a share, in the three months ended Dec. 29, from $347.5 million, or $1.18, a year earlier, New York-based Coach said today in a statement. Analysts projected $1.28, the average of estimates compiled by Bloomberg.
Freedman, who is based in New York and rates the shares neutral, had estimated a 4 percent increase in North American comparable sales while David Schick, an analyst at Stifel Financial Corp, had projected a gain of 3 percent.
Total revenue in the quarter increased 3.8 percent to $1.5 billion, trailing the $1.6 billion average of analysts’ estimates compiled by Bloomberg.
Coach has faced increased competition from Michael Kors Holdings Ltd. (KORS), Ralph Lauren Corp. (RL) and Fifth & Pacific Cos.’s Kate Spade brand, among others, as more apparel and accessories companies have sought to profit from the lucrative U.S. handbag market that Coach has dominated for more than a decade.
In the previous the quarter, Coach introduced its Legacy line, inspired by its archives of classic leather goods, which it called its most significant product debut since 2001.
“The Legacy line was probably not the comparable sales driver that Coach had planned or hoped,” Freedman said.
Coach maintained its prices to protect the brand as promotional activity increased, Frankfort said in the statement. Gross margin, the share of sales left after subtracting the cost of goods sold, was little changed at 72.2 percent. Analysts estimated 72.4 percent, on average.
Clicks CEO David Kneale. Picture: FINANCIAL MAIL
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JSE-listed companies: Clicks
CLICKS Group increased sales by 11.7% to R5.97bn in the 18 weeks to December 30 2012, a figure analysts called ‘reasonable’ given the muted consumer spending environment.
The company’s CE David Kneale said on Wednesday: “The trend of consumers delaying their purchases until closer to Christmas continued while consumers were increasingly value conscious this festive season.”
The Clicks chain grew turnover by 8%, with dispensary sales growing by 9% and front shop sales by 7.6%. Comparable sales grew by 5.3% with selling price inflation of 2.6%, the company said.
Avior Research analyst Michael McLeod said: “11.7% is reasonable, but the Clicks retail chain coming out with just 8% is a bit slower. The turnover number is being pushed up by UPD (the group’s pharmaceutical wholesaler) with 20.3%, but again UPD carries much lower margins than the Clicks retail chain, so that obviously makes a difference.”
Absa Investments analyst Chris Gilmour said that while the results “were not anything to get too excited about, they were not bad”.
“The fact that you’ve got selling price inflation of 2.6% and comparable sales growth of 5.3% means you have 2.7% real, organic growth and that’s the figure one has to concentrate on — which, in this kind of tight market is not bad, it’s reasonable,” Mr Gilmour said.
The group’s Musica division increased same stores sales by 8.2%, in a declining CD and DVD market, where consumers are shifting their spending from physical to digital formats.
Turnover was affected by the closure of a further seven stores during the period and total sales increased by 1.0%.
According to PricewaterhouseCoopers (PwC), spending on physical music formats is expected to decline at a 10.0% compound annual rate to R746m in 2016 from R1.3bn in 2011.
“I maintain that Musica is a dinosaur company. I just see Musica as being a long-term problem for them and I think they have to do something about it at some point in time,” Mr Gilmour said.
The Body Shop, which Clicks manages under a franchise arrangement through standalone stores and capsule ranges within Clicks stores, surprised with solid sales growth of 10.2% and in comparable stores by 6.8%.
“They are progressively putting more and more Body Shop customers into Clicks stores … this figure could also be the Lipstick Index effect,” Mr Gilmour said.
Used to describe increased sales of cosmetics during the recession, the Lipstick Index is a term coined by Leonard Lauder, chairman of the board of Estee Lauder. Speculation around the fashionable financial barometer is that women substitute beauty products such as lipstick for more expensive purchases such as dresses and shoes in times of economic distress. Clicks Group’s UPD wholesale pharmacy business increased turnover by 20.3%.
“UPD has always been a great operation, its the great unsung hero within Clicks. It keeps on producing the goods every year,” Mr Gilmour said.
ZURICH – Luxury goods group Richemont, maker of Cartier jewellery, gave a cautious outlook on Monday after slowing wholesale demand for its pricey products pushed sales growth in the last quarter below forecasts.
Sales rose 5 percent at constant exchange rates in the three months to end-December to 2.862 billion euros ($3.8 billion), missing forecasts for a 7.6 percent rise in a Reuters poll as the previously booming Asia-Pacific region reported no growth.
“At this stage, it is unclear how business patterns may develop and how the business in the Asia Pacific region will evolve in the near future,” Richemont said in a statement.
Richemont said the rate of wholesale growth fell in the quarter to just 2 percent from 8 percent in the April to September period due to caution by retailers in Hong Kong and mainland China and a less favourable environment.
Boutique openings helped maintain retail sales growth at 9 percent, from 15 percent in the first half, while strong jewellery sales also helped.
The maker of IWC and Lange & Soehne watches said sales growth in the Americas accelerated to 13 percent from 4 percent in the first half, with both retail and wholesale doing well, but sales growth slipped to 9 percent in Europe from 19 percent.
Spar has announced it is to include Amazon Lockers in a number of stores, allowing customers to retrieve Amazon parcels at a local Spar store. The Lockers are currently located in nine Spar stores with further Lockers planned to be added in the future.
The initiative lets Amazon customers choose their Locker option and location when ordering online. They then receive a secure pick-up code via email which they use to open the Locker and retrieve their parcel.
The nine Blakemore Retail Spar stores offering Amazon Lockers are: Fosse Road, Bocking Lane, Upton, Birmingham University, Bannerbrook, Broomhill, Grantham, Burbage and St. Albans.
Spar UK retail development controller Barry Wallis said: “This is a highly innovative move from Spar UK, showing our commitment to launching the latest technologies that provide the best possible convenience to shoppers.
“Online sales are growing with more than half of the UK population now shopping online. In recent months, we have introduced mobile phone charging units, free WiFi and mobile marketing apps instore for our customers. This is the next step in making our stores even more service-friendly.”
A shopper at an Ikea superstore. The Swedish firm open 11 new outlets in nine countries in 2012. Photograph: David Sillitoe
Demand in emerging markets for Ikea’s flatpack furniture has helped the Scandinavian company post an 8% increase in profits in 2012.
Worldwide sales last year increased 9.5% to €27bn (£22.6bn) with profits up 8% to €3.2bn (£2.7bn), thanks to strong sales particularly in new markets including China, Russia and Poland.
Prices were cut by an average of 0.8%, despite raw materials and transport costs increasing, but sales increased following 11 new store openings in nine countries and a 21.8% increase in website visits. In the UK a £30m investment in stores saw like-for-like sales rise 6.5%.
Chief executive Mikael Ohlsson said: “The Ikea business idea is more relevant than ever. People around the world are more value conscious and appreciate beautifully designed and functional home furnishing solutions at affordable prices.”
He revealed the company aims to double sales by 2020, spending up to £12.6bn on expansion. This includes more than £1bn on opening around 25 stores in India.
Ohlsson said recently, however, that the speed at which Ikea can open new stores has slowed in the past few years.
He said: “What some years ago took two to three years now takes four to six years, and we also see that there’s a lot of hidden obstacles in different markets … that’s holding us back. We are planning to increase the establishment speed, but we see that the process to go through all the administrative procedures is taking longer and longer.”
Indian authorities liberalised retail rules in the country last month allowing foreigners to own 100% of Indian subsidiaries, allowing Ikea to enter the market.
The surprise arrival of Sir Stuart Rose as chairman of Ocado was welcomed by investors as a major vote of confidence in the future of the online grocery retailer, sending its shares up by more than 6pc.
Analysts are sceptical that Sir Stuart Rose, who left Marks & Spencer in 2010, will turn around a struggling Ocado
Ocado is yet to make a profit since it was founded in 2000 and is under growing pressure as traditional supermarkets such as Tesco ramp up their online operations. It has slso been the subject of takeover rumours from Marks & Spencer and Wm Morrison.
However, investors took the appointment of the former chief executive of Marks & Spencer as an endorsement of Ocado’s prospects.
Sir Stuart said he was “very impressed at the impact and progress Ocado has made to date”. He added: “As retail goes through a fundamental shift into the digital world, I believe Ocado’s model and the high standards of customer service it provides will see it emerge as a powerful online player.”
The role at Ocado is Sir Stuart’s first job as a chairman or chief executive of a listed company since leaving M&S in 2010, where he infuriated institutional investors by combining the chairman and chief executive roles.
But, despite the breach of corporate governance best practice at M&S, Sir Stuart’s arrival at Ocado was applauded by shareholders.
Fidelity, which owns 12pc of Ocado and is one of the company’s biggest five shareholders, said the appointment is “encouraging”.
Tom Ewing, portfolio manager of the Fidelity UK growth fund, said: “It boosts the retail experience at the top of Ocado whilst demonstrating that key participants in the industry are waking up to the fact that people increasingly, and inexorably, want to shop for their food online.
“We are delighted with the progress at Ocado over recent months.”
Ocado’s share price rose 5.95 – or 6pc – to 101p. This followed a 5pc rise last Friday and a 9pc rise on Monday. However, shares in the company are still almost 50pc lower in value that its float price of 180pc in 2010.
Sir Stuart will become chairman on May 10 at the company’s annual meeting. He will replace Lord Grade, the former BBC and ITV chairman, who is retiring.
Tim Steiner, Ocado’s chief executive, said the company will benefit from Sir Stuart’s “extensive retail experience and counsel”.
Abu Dhabi’s Tourism Development and Investment Company (TDIC), has announced a joint venture partnership with L Real Estate to develop ‘The District’ in Saadiyat island’s Cultural District, a retail complex sponsored by Louis Vuitton – Moët Hennessy.
The development will cover an area on the island of 168,000m2, while the structure will comprise three levels, all above ground. The gross floor area of the project will be 258,000m2 and the total built up area 370,000m2, delivering 168,000m2 of leasable space and 550 plus units.
The project, which will be equipped with one of the largest planned outdoor high-street’s in the region, is being centrally positioned within the cultural district to interlink all three of Saadiyat’ three upcoming museums.
HE Sheikh Sultan bin Tahnoon Al Nahyan, TDIC chairman, said: “TDIC’s iconic cultural institutions, upscale residential communities and distinctive leisure facilities, is truly reflective of Abu Dhabi’s wider economic strategy of transforming the emirate into a vibrant international destination.
“This new retail destination ideally sits among Saadiyat’s inspiring museums, and will be a sought-after location for Abu Dhabi’s communities and visitors when it opens by 2017.”
The detailed design work for the project will start in 2013, while construction is due to commence in 2014, with completion expected in 2017, to coincide with the opening of the Guggenheim museum.
Construction of Dubai developer Majid Al Futtaim (MAF) Properties’ Mall of Egypt will finally begin next month, but will be a year behind schedule by the time it is expected to open.
Despite political and social unrest, MAF Holding CEO Iyad Malas on Tuesday said he was confident in the Cairo market and the company would persist with the project.
Malas said sales in the company’s two existing malls in Egypt, in Alexandria and Maadi, rose 24 percent last year compared to 2011, during the height of political disturbances.
Egypt was trying to attract new investment and entice those who left the country to return, he said.
MAF Properties had secured US$450m worth of financing to fund Mall of Egypt from a consortium of banks led by National Bank of Egypt and Banque Misr.
“There is clearly support for Egypt… internationally,” Malas said. “They have to focus on the key issues with unemployment; all that needs investment in growth.”
The Mall of Egypt will be built on 399,400 sqm of land outside Cairo and will include North Africa’s first manmade indoor ski resort, similar to MAF Properties’ Ski Dubai in Mall of the Emirates, about 380 retail outlets, a Carrefour hypermarket, 17-screen cinema complex and an amusement park.
The US$400m construction contract has been awarded to a 50/50 joint venture between Orascom Construction and BESIX Group.
The project will represent a total investment of EGP4.9bn (US$800m) and will lead to the creation of 9,000 jobs during the construction phase and 7,000 once the mall has opened.
However, the mall is now not expected to open until late 2015, about a year beyond its original opening date of October 2014.
Malas also said MAF Properties was considering entering the Abu Dhabi and Riyadh markets and was already scouting for potential development locations.
“[We’re] looking at building potential shopping malls in both those cities,” Malas said. “We’re looking for land at the right price, at the right location, etc.” Such malls would be at least 150,000 sqm, Malas said.
The company may also expand the hypermarket Carrefour, of which MAF Retail owns a 75 percent interest, into Abu Dhabi. “That’s clearly a good option,” Malas said.
MAF Properties said it is also planning to expand into Georgia, Kazakhstan, Armenia and Azerbaijan in the near future, starting with Georgia as early as this year.
In 2013, MAF Properties is also due to open its first mall in Lebanon in April. It is already fully tenanted.
Malas said a second mall was planned for the new Beirut Waterfront project, with construction to possibly start this year.
The new shopping mall plans were revealed during an announcement of MAF Holding’s 2012 full-year results today.
The company, the largest private shopping mall developer in the Middle East, said its revenue grew 10 percent last year compared to 2011, to AED21.6bn.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 7 percent to AED3bn. Excluding currency depreciation in Iran, EBITDA grew 9 percent.
The company said its balance sheet remained strong with total assets valued at more than AED38bn, with AED7bn debt.
MAF Properties contributed about 65 percent of MAF Holding’s EBITDA, with revenue increasing 15 percent to AED3.2bn. The company’s malls saw about 147m visitors during 2012.
MAF Retail, which operates the Carrefour franchise, saw 8 percent growth in revenue, rising to AED17.8bn, contributing 31 percent of the group’s EBITDA.
MAF Ventures, which operates the group’s leisure and entertainment facilities, increased its revenue 11 percent to AED806m.
Truworths International (TRU) advised on Friday that it expects both basic earnings and headline earnings per share for the first 26 weeks of the 2013 financial year will be between 16% and 20% higher relative to the corresponding period in the 2012 financial year.
In the 26 week period from 2 July until 30 December 2012‚ group retail sales increased by 14.8% to R5.5 billion. Comparable store retail sales grew by 9.8%‚ trading space increased by 8.1% relative to the prior corresponding period-end and product inflation averaged 3%.
At the end of the 26 week period the group´s gross trade receivables had increased by 15.8% to R4.5 billion relative to the prior period-end. Credit sales contributed 72% to retail sales compared with 73% in the prior period.
As anticipated by management‚ the credit environment has become more challenging with consumer delinquency levels increasing nationally‚ the retailer said.
The group’s interim result will be released on or about Wednesday‚ 20 February 2013.
* EBITDA rises 7 pct to 3 billion dirhams
* MAF separates Iran business
* In talks to buy UAE fast food chain
By Matt Smith
DUBAI, Jan 22 (Reuters) – Dubai’s Majid Al Futtaim (MAF) expects to bid for the supermarket arm of Egypt’s Mansour Group in the first quarter, MAF’s chief executive said, after it posted a 10 percent rise in annual revenue.
Mansour Group, also the largest distributor of General Motors cars in Egypt, aims to sell supermarket chain Metro and discount grocery store Kheir Zaman. Sources told Reuters in December that the deal was valued at $200 million to $300 million.
“We’re still in the due diligence phase, which we expect to be for another month or so,” Iyad Malas, chief executive of Majid Al Futtaim Holding , told Reuters. “At which time, we would hopefully make an offer that would be subject to negotiations and then would either conclude a transaction or not.”
The discussions signal growing appetite by Gulf-based firms to expand their presence in the most populous Arab state at a time when valuations are low due to political strife in Egypt.
Metro is the country’s largest supermarket chain with more than 40 outlets in 10 cities. Kheir Zaman has over 2,000 employees and 30 stores throughout the country.
Unlisted MAF , which reported a 10 percent rise in annual revenue to 21.6 billion dirhams ($5.9 billion) on Tuesday, entered Egypt in 2000 and it owns two shopping malls, plus 14 hypermarkets and supermarkets.
“We continue to believe that Egypt has a large consumer base that is attractive,” said Malas, adding the country provided 5-9 percent of the company’s revenue in 2012.
In Cairo, MAF will start building its Mall of Egypt project in the first quarter and also plans to expand its Maadi City Centre mall and develop land it owns near the city’s airport.
The family-owned group is the sole franchisee of French hypermarket chain Carrefour in the Middle East and owns 11 shopping malls and 11 hotels in the Middle East and North Africa.
MAF separated its Iran operations from the group in late 2012, with ownership passing directly to MAF’s family shareholders.
“We’ve been fully compliant in terms of sanctions. However, we felt there was always a risk, given our issuance and access to the bond market, there could be some investors who were nervous about having Iran in MAF Holding,” said Malas.
MAF issued a $400 million sukuk, or Islamic bond, in February 2012, plus a $500 million conventional bond in July.
Iran provided about 4 percent of group revenue last year following the devaluation of the rial.
The United Arab Emirates accounted for about half of MAF’s revenue in 2012 and the company is in talks to acquire a UAE fast food chain, Malas said, declining to give further details.
“We are speaking to someone already,” he said.
Saudi Arabia, Qatar and Bahrain also each provided 5-9 percent of MAF’s revenue last year, with the company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) up 7 percent to 3 billion dirhams.
Revenue from its property division, which includes its malls and hotels, rose 15 percent of 3.2 billion dirhams in 2012, with EBITDA at 2 billion dirhams, the company said in a statement.
MAF’s lower-margin retail arm had revenue of 17.8 billion dirhams in 2012, up 8 percent, and EBITDA of 937 million dirhams. ($1 = 3.6730 UAE dirhams)
Clothing retailer The Foschini Group (TFG) said on Friday group sales for the nine months to December increased by 11.4% from a year earlier‚ with same store sales growth of 5.6%.
Christmas trading was mixed across merchandise categories with group sales growth for December (December 2 to December 29) of 10.5% and same store growth of 4.7%.
Growths in the various merchandise categories for the nine months to December were as follows: clothing 12.5% (same store growth 6.1%); homeware 18.9% (same store growth 11.8%); cosmetics 11.4% (same store growth 8.0%); jewellery 7.6% (same store growth 3.6%) and cellphones 2.3% (same store growth -1.4%). Merchandise inflation for the period averaged 5.5%.
The company said sales post Christmas for the period December 30 to January 17 had been strong across all merchandise categories with group sales increasing by 19.8% and same store growth of 12.9%.
India’s overseas investment board approved furniture retailer IKEA’s proposal to open outlets in the country, bringing the Swedish chain closer to becoming the first major foreign retailer to set up its own stores.
The Foreign Investment Promotion Board cleared the Swedish furniture retailer’s proposal, Commerce Minister Anand Sharma said in a statement today. The revised approval comes after the board last year barred Ikea from operating cafes and restricted the kind of items it could sell at stores.
The approval means Ikea may gain access to a retail market that the Associated Chambers of Commerce & Industry of India and Yes Bank Ltd. (YES) predict will double to 47 trillion rupees ($874 billion) in 2017. The world’s largest furniture maker still needs approval from the Indian Cabinet to proceed with its plan to invest as much as 1.5 billion euros ($2 billion) to set up stores.
“We consider this as a very positive development,’’ Juvencio Maeztu, Ikea’s manager for India, said in an e- mailed statement. ‘‘We are now waiting for approval from the Cabinet and subsequently a notification so that we can initiate the process of establishing IKEA stores in the country.”
The government’s approval for Ikea is “overall very good for the retail sector,” Bharat Chhoda, retail analyst at ICICI Direct, said before the decision was announced. “This kind of steadfastness showed by the government, probably it’ll be very positive for the entire sector, showing that the government is looking to fast-track” such proposals.
Prime Minister Manmohan Singh’s government last January passed regulations that allowed single-brand companies such as Ikea to open outlets without local partners.
The government in September allowed foreign multi-brand retailers such as Wal-Mart Stores Inc. (WMT) and Carrefour SA (CA) to own as much as 51 percent of retail outlets. A similar decision was suspended in 2011 due to political opposition that paralyzed parliament.
“The government is committed to play a constructive role in encouraging foreign direct investment, especially in areas which create jobs and provide technological advancement,” Sharma said in the statement. “Ikea has a business model which integrates” small- and medium-sized enterprises and the domestic industry, he said.
Pavers Ltd., a British footwear retailer, was the first foreign single-brand retailer to get government approval for full ownership.
Large outlets constitute a small chunk of India’s retail market, which is dominated by small grocery stores. These shops, known as kirana, often sell goods on credit, and account for 68 percent of the total value of groceries sold in the country, according to the report by the Associated Chambers of Commerce and Industry of India and Yes Bank.
IKEA, controlled by Swedish billionaire Ingvar Kamprad, has 338 stores in 40 countries, operated by the company as well as its franchisees, according to the group’s website. More than half the retailer’s revenue comes from stores in Europe, its annual report shows. The company has 28 stores in Asia, according to the report.
The company plans to invest as much as 1.5 billion euros to open 25 stores in India, according to a government statement in June. India’s rules require foreign-owned retail companies to locally source at least 30 percent of the value of goods sold.
India’s furniture market is dominated by small, unorganized players who could be the worst-affected when Ikea sets up its stores, Arun Kejriwal, director at Kejriwal Research & Investment Services Pvt., said in an interview ahead of the ministry’s decision.
“Furniture in India is a fairly disorganized product, you hardly have any national players,” Kejriwal said. Ikea’s wide portfolio of relatively cheap products will pull customers from the smaller retail outlets in cities, he said.
Foreign investors still face a maze of regulations in India’s retail market. They will also be required to invest a minimum of $100 million, with half being used to build facilities such as manufacturing, distribution and warehouses within the first three years of their foray, India’s Department of Industrial Policy & Promotion said in September.
Kingfisher has confirmed that Euan Sutherland, chief operating officer, will be leaving the board of the company at the end of the month. However, he will officially remain an employee until he resigns in March to become Group CEO of The Co-operative Group.
Mr Sutherland joined Kingfisher in 2008 as CEO, Kingfisher UK & Ireland. He was appointed group chief operating officer in February 2012 and joined the Kingfisher main board in October 2012.
SCOTTISH clothing giant Edinburgh Woollen Mill (EWM) has helped once troubled chain Peacocks regain its strength after buying the group out of administration.
EWM stepped in to save 6,000 retail jobs after agreeing to buy Peacocks for an unclosed sum after the company called in administrators in January.
Over the past 12 months it is understood EWM has taken on more than 1,000 additional staff at Peacocks and opened 45 stores across the UK.
Retail experts say EWM has saved Peacocks, which runs a store on Oxford Street in Swansea, by going back to basics.
The news comes as administrators Deloitte continue to search for a buyer for troubled chains HMV and Blockbuster which both went into administration this week.
At the time it collapsed under its original ownership Peacocks had 611 stores and 49 concessions across Britain employing around 9,100 people.
Shortly after buying the business out of administration EWM chairman and chief executive Philip Day said: “As you can imagine, there will be a considerable amount of work to undertake over the next few months to stabilise the situation, turn this business around, get the supply chain moving again and excite the customers with great products.”
High street banking giants Barclays and Santander agreed to help EWM with funding for the acquisitions of Peacocks
Donnybrook Fair’s tax charge for the year ending in January 2012 was reduced to just €2,034, on pretax profits of €442,734, as a result of allowances arising from the opening of a new outlet in Stillorgan, Co Dublin, during the year.
Donnybrook Fair, the retail business owned by Joe and Mary Doyle, made a pretax profit of €442,734 in the year to the end of January 2012, according to accounts just filed.
The pretax profit is similar to that made the previous year though the tax charge was reduced, to just €2,034, as a result of allowances arising from the opening of a new outlet in Stillorgan, Co Dublin, during the year.
Turnover from the group was €22.39 million, up from the previous year’s €21.79 million.
Donnybrook Fair has a convenience store, restaurant and cookery school in Donnybrook, and convenience stores on Baggot Street, Dublin, in Stillorgan, Co Dublin, and in Greystones, Co Wicklow.
Satisfied with performance
Mr Doyle said he considered the outcome for the year to be “not too bad” given the economic climate. He was satisfied with the performance of all the group’s various activities.
In the accounts the directors express their thanks to the staff and suppliers for their efforts in what was a challenging year.
The group did not pay a dividend. It had accumulated profits at year’s end of €1.27 million.
The group employed an average of 227 staff during the year, up from 177 the previous year. This included two directors. Total staff costs were €5.1 million, up from €4.48 million. Directors’ remuneration, including pension contributions, were €40,098.
Speaking to The Irish Times, Mr Doyle noted that while other companies had been cutting their staff numbers, his group had been actively increasing its staff.
“We are very proud of the fact that we are able to offer such high levels of employment during this difficult time. Our ratio of staff numbers to sales is much higher than you would see in the large multinationals, due to our unending focus on quality produce and customer service.”
He said that in an economic downturn it often seems easier to cut costs. However, he felt that cutting costs meant compromising on quality.
Hermes International SCA Chief Executive Officer Patrick Thomas said the company had a “fantastic” end to 2012, echoing rival Salvatore Ferragamo SpA and suggesting demand for luxury leather goods remains strong.
Last year was “very good,” Thomas said late yesterday before the Paris-based company men’s fashion show in the French capital. Thomas also said that he will retire in January 2014.
Hermes, whose Birkin handbags sell for prices starting at about 5,500 euros ($7,300), raised its target for 2012 revenue growth to more than 13 percent because of surging demand in Asia. Ferragamo CEO Michele Norsa said Jan. 13 that he was “positive” for 2013 after sales at the Florence, Italy-based shoemaker showed a “positive trend” in the fourth quarter.
IRELAND’S richest sportsman Rory McIlroy has invested some of his burgeoning wealth in a tax-driven deal to build a €25m Hilton Hotel in Sheffield, England.
McIlroy is a backer of the West Bar BPRA limited partnership, which is funding the deal. He is joined in the investment by Ireland goalkeeper Keiren Westwood, who has been warming the bench at Sunderland FC for several months.
Advisory documents for the scheme indicate that backers of the 142-bed hotel scheme could net returns of up to 23 per cent over the next eight years. The minimum investment was €120,000 for each backer.
McIlroy signed a 10-year, €190m sponsorship deal with Nike last week, smashing any previous Irish records for endorsements.
The golfer has some diverse investments ranging from a small stake in the luxury yacht and speedboat maker Sunseeker, which was bought in a €30m deal by Irish private equity group FL Partners in 2010.
South African retailer Mr Price falls more than 2 percent, stretching its rout into the ninth straight session, dragging down other retailers on growing worries the sector is priced for more than it can deliver.
Mr Price, which reported a 10 percent quarterly sales growth on Thursday that failed to impress investors, is down 2.14 percent at 118.65 rand, bringing losses so far this year to nearly 16 percent.
Retailers have been investor favourites for more than a year in a rally that many analysts say has pushed shares to unjustifiable levels.
Shoprite, Africa’s top grocer, is down 1.83 percent to 182.61 rand and rival Woolworths is off 1.96 percent at 62.62 rand.
U.S. footwear maker K-Swiss Inc said it has agreed to be acquired by South Korean retailer E-Land World Ltd for $4.75 per share in cash in a deal valued at about $170 million.
The offer price is a 49 percent premium to K-Swiss’ closing stock price of $3.19 Wednesday on the Nasdaq.
The deal requires the approval of 80 percent of K-Swiss’ outstanding voting power. Certain Class A and Class B stockholders, who collectively hold about 75 percent of the voting power, have executed agreements to vote in favor of and support the transaction, K-Swiss said.
E-Land will use existing resources and credit facilities to fund the acquisition and will not need additional external financing for this transaction, according to a company statement.
E-Land, a privately-owned retailing group, has added outlets, leisure holdings and upmarket brands such as bags and wallet maker Mandarina Duck in a series of acquisitions since 2009.
Last year, it joined a consortium that bid for, but failed to acquire, the U.S. Major League Los Angeles Dodgers baseball franchise.
FRANKFURT – Hugo Boss has extended the contract of chief executive Claus-Dietrich Lahrs, he told German business daily Handelsblatt in an interview published on Thursday.
“I received a new five-year contract just before Christmas,” Lahrs was quoted as saying.
Under Lahrs, Hugo Boss has increased the number of collections it offers each year and shortened development times to better follow the model of fast-fashion retailers such as Spanish group Inditex’s Zara.
It is also making a push to become more of a retailer, rather than just selling stock to wholesale partners.
About 14,000 staff at Dunnes Stores are to receive a 3 per cent pay increase. The move represents the first pay rise for staff at the retailer since December 2007.
The trade union Mandate said the company did not attend a hearing at the Labour Court yesterday but informed its 14,000 personnel that it would be increasing pay by 3 per cent.
Mandate had sought a 3 per cent pay rise for staff in the company. The union’s assistant general secretary, Gerry Light, said most retail companies had emerged intact from the crisis and had remained highly profitable.
He said industry sources estimated that Dunnes Stores was generating sales in the region of €3.8 billion annually and was “achieving significant profits – due in large part to the efforts of their staff”.
“Since early 2011 Mandate trade union has sought to engage with retail employers to put in place pay arrangements that reflect their workers’ contribution to that success. The vast majority of employers have engaged with us and through negotiation, we have been able to put in place a variety of agreements that reflect the economic and trading conditions being experienced by those companies.”
Mr Light said that as a result of this process – and with Dunnes’ concession of the union’s pay claim yesterday – more than two-thirds of Mandate’s 45,000 members will have received pay increases by 2013 ranging from 1.5 per to 3 per cent. He said while he welcomed the company’s concession of the 3 per cent pay claim, he was disappointed at Dunnes Stores’ continuing failure to respect their staff’s right to be represented by a trade union.
“Unlike many of the other major retailers – who are still extremely successful – Dunnes refuses to engage with their staff’s union of choice and didn’t even attend the Labour Court today,” he said.
He described the company’s attitude in its dealings with its staff, their union and the Labour Court as dismissive.
“The company persists in being high-handed in its dealings with their workers . . . and the institutions of the State. They might learn from some of their competitors that treating people with respect is in a business asset, not a liability.”
Carrefour SA said revenues rose 0.8 percent to 22.85 billion euros, or $30.26 billion, in the fourth quarter of 2012, supported by robust activity in South America and its food sales.
The world’s second-largest retailer behind Wal-Mart Stores Inc. said the period had confirmed an improvement in consumption in France, its largest market, although it had continued to see pressure in Southern European markets.
On a constant-currency basis and excluding gas, like-for-like revenues grew 0.4 percent during the period. This included a 0.8 percent decline in France, a 3.9 percent drop in the rest of Europe, an 11.2 percent rise in Latin America and a 3.9 percent fall in Asia.
For the 12-month period, the French retailer said its revenues grew 1 percent to 86.56 billion euros, or $114.31 billion, with emerging markets, particularly Latin America, performing well.
It added that it expects its 2012 recurring operating income to conform with the current median consensus, which stands at around 2.07 billion euros, or $2.73 billion.
All dollar rates are calculated at average exchange rates for the period concerned.
Childrenswear retailer Mothercare has said that its transformation and growth plan is “on track” despite seeing a further drop in UK sales over the third quarter to January 12th.
Despite continued double-digit growth in international sales and a store closure programme targeting loss-making stores, the UK division continued to struggle, with a 5.9% fall in like-for-like sales in the 13 weeks to January 12th. In the same period, international underlying sales rose 14.8%.
Whilst the international business opened a net 31 stores during the quarter, and now operates from 1,129 stores across 61 countries, 11 stores (eight Early Learning Centre and three Mothercare) were closed in the UK during the quarter. This means the UK business now operates from 269 stores compared to 311 stores at the beginning of the year. As a result, reflecting the ongoing closure of loss making stores, total UK sales were down 12.9% during Q3.
Simon Calver, chief executive of Mothercare plc, summarised: “We have made solid progress during Q3, despite a challenging consumer backdrop for the UK and Eurozone. International continues to see double-digit growth and in the UK we have made further progress closing loss-making stores. The transition to our new online platform has passed the test of peak trading with Direct in Home growing at double-digit rates during December. Our work towards delivering improved value, choice and service for our customers continues to make an impact and I am very encouraged by the new ranges and innovative product ready to go into stores for spring/summer 2013.”
EE is the latest high street retailer to announce store closures, with the 4G network confirming it is to close 78 of its near 700 UK high street shops .
Just three months after the network giant merged its Orange and T-Mobile stores to a single, EE rebranded entity, the UK’s only 4G provider has said that its decision has been based on customer numbers, store leases and proximity of other EE stores, not financial struggles.
Amid job loss fears following recent administrator enforced cuts at Jessops, HMC and Blockbuster, the new network has promised not to make any redundancies, choosing instead to relocate employees to nearby stores.
Considering that EE used to be two separate networks with a store for each, the closures are probably an administrative move that reduces high street overcrowding.
Speaking to the Financial Times, an EE spokesperson said: “where we have stores in very close proximity with each other – in some places they are just a door away – we have decided to consolidate. This makes commercial sense and will also help us manage the high levels of demand in our stores and improve the customer experience.”
It’s not all bad news for EE as it is actually opening four more stores in brand new locations, so it seems that these store closures are not a sign that the network is struggling.
Following the recent announcements of high-street retailer HMV and film and game retail chain Blockbuster filing for administration this week, the news of EE’s store closures is another blow for the struggling British high street, which is suffering from fierce internet competition.
The Lisney Review 2012 & Outlook 2013, which I hope you will find interesting and informative.
The last 12 months have remained challenging for the property market but, in a general sense, there now appears to be greater transactional activity, particularly over the past four months. From our point of view, we have witnessed increases in both the volume and value of residential sales. During the year, we also returned to the auction market for non-distressed residential property where our success rate was in excess of 90%. The commercial markets have improved too with the value of investment sales completed during 2012 up 240% on 2011 and an increased focus on Ireland from our overseas investors. As we prepare for the next 12 months, we expect these positive trends to continue.
Woolworths profit to soar, shares
Johannesburg – Shares of Woolworths Holdings [JSE:WHL] surged more than 4% on Wednesday after the retailer said it expects first-half profits to rise by as much as 24%.
Woolworths, one of the best performers on Johannesburg’s Top 40 – (Tradeable) [JSE:J200] index in 2012, said it expects to post an increase of 18% to 24% in headline earnings per share for the 26 weeks to December 23, lifted by double-digit sales growth.
Shares of the company are up 4.6% at R66.20 at 07:22 GMT.