Monthly Archives: May 2013

Carrefour ties joint venture to open multi-format stores in eight countries in Africa

Carrefour has set up a joint venture with a French distributor to develop a range of store formats in eight countries in West and Central Africa.

The partnership with CFAO will be owned at 55% by CFAO and 45% by Carrefour and will have exclusive distribution rights in Cameroon, Congo, Côte d’Ivoire, the Democratic Republic of the Congo, Gabon, Ghana, Nigeria and Senegal.

As the world’s second-largest retailer with a presence in over 30 countries, Carrefour said it will contribute its expertise as a multi-format retailer as well as the strength of its banner in the new venture.

CFAO, with its longstanding local presence in Africa, will bring its thorough knowledge of these markets and a deep understanding of consumer habits to the venture.

The Carrefour Group, the world’s second largest retailer and largest in Europe, operates more than 10,000 stores in more than 30 countries.

The Group operates different store formats – hypermarkets, supermarkets, convenience stores and cash & carry outlets – and processes 3bn cash transactions per year.

CFAO is leading distributor of vehicle and pharmaceuticals in Africa and the French overseas territories.

In Africa, CFAO also distributes equipment, produces and distributes consumer goods and is a provider of a number of technology-related services.

CFAO is present in 37 countries, 32 of which are in Africa and seven in the French overseas territories. In 2012, CFAO generated €3.6bn in sales.

CFAO is listed on NYSE Euronext in Paris and is a 97.8%-owned subsidiary of TTC (Japan).

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Foschini profit dented as consumers cut spending

THE Foschini Group, South Africa’s third-biggest listed clothing retailer, missed estimates with an 11% rise in full-year profit as debt-laden consumers cut back on spending.

Foschini, which also sells jewellery and furniture, said diluted headline earnings per share totalled 851.3c in the year ended March compared with 766.1c a year earlier.

The result fell short of the 859c estimated by Thomson Reuters StarMine, which gives more weight to forecasts from historically accurate analysts.

Sales rose 11% to R12.8bn.

After more than two years as investors’ darlings, South African retailers are falling out of favour as doubts creep in about the health of debt-fuelled consumer spending and views that share prices have been pushed to unjustifiably high levels.

South African industry-wide retail sales slowed 2.8% year on year in March from 3.9% in February, official data showed.

Foschini, which sells the bulk of its products on credit, said net bad debt as a percentage of its debtors’ book increased to 10.5% from 9.4% the previous year.

Due to high levels of consumer indebtedness, enhanced credit risk management practices had been implemented, the company said

The company said it planned to open 150 new stores this year.

“In line with our strategy of investing for long-term growth, we will continue to open new stores in certain of our formats. We anticipate opening in excess of 150 new stores in the year ahead which will increase trading space by approximately 6%. We believe the group is well positioned to once again produce solid results in the year ahead, although caution is warranted given the state of the consumer environment,” it said.

However, the group said economic conditions in South Africa would remain difficult with the credit environment likely to deteriorate further.

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UK to set up business centres in UAE to help SMEs

UK to set up business centres in UAE to help SMEs

The UK is to set up business centres in Abu Dhabi and Dubai in a bid to help British small and medium enterprises (SMEs) looking to set up in the UAE and was chosen as the launch market for a global business masterplan by the British government.

The UK Department of Trade and Investment (UKTI) and the British Business Groups in Abu Dhabi and Dubai have signed a Memorandum of Understanding (MoU) for the establishment of the two business centres.

The signing took place at the fourth meeting of the UK-UAE Business Council in Manchester on May 20 and was witnessed by Lord Marland of Odstock, the UK Prime Minister’s Trade Envoy and the Chairmen of the UK-UAE Business Council and Nasser Alsowaidi, Chairman of the Abu Dhabi Department of Economic Development.

The initiative is part of UK Trade and Investment Minister Lord Green’s aim to improve the competitiveness of British companies overseas and the UAE is one of 20 pilot markets taking part in the masterplan.

“Lord Green’s initiative is a great opportunity for the Government to work with business in delivering a range of services to UK companies wanting to set up in the UAE. It will create a platform for UAE and UK SMEs to work together across the Emirates to increase bilateral trade,” British Ambassador to the UAE, Dominic Jermey, told the WAM news agency.

The UK and the UAE have a shared aim to increase trade between both countries by 60 percent, from levels in 2009 up to £12bn ($18bn) by 2015.

The move is part of growing ties between the two countries. This week it was revealed both governments are also in talks to consider a proposal to waive visas for Emiratis entering the UK.

The London government is actively in talks with UAE authorities regarding a proposal to waive visas for Emiratis entering the UK, Alistair Burt, Parliamentary Undersecretary of State at the British Foreign and Commonwealth Office, told reporters at a press conference in Abu Dhabi.

“We will let people know,” Burt said when asked about a timeline for the proposal. The press conference was to mark the tenth meeting of the UK-UAE Taskforce, which was co-chaired by Dr Anwar Gargash, Minister of State for Foreign Affairs and Federal National Council Affairs.

As part of the talks, Gargash said a proposal to establish a prisoner transfer agreement between the two countries was “working well”.

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Spar International sales reach €32 billion

Spar International has reported worldwide retail sales growth of 2.8% in 2012 to €32 billion. The retail chain has operations in 34 countries with plans to expand to 36 in 2013 with supermarkets scheduled to open in Qatar and Lebanon. Spar’s global operations include 12,322 stores internationally.

Speaking at the 58th International Spar congress in Killarney last week, managing director Dr. Gordon Campbell said Spar experienced another year of continued growth, along with celebrating the 80th anniversary since its foundation. Austria is by far the largest Spar country with retail sales of €5.560 billion. South Africa is the second largest Spar country by turnover with sales in 2012 of € 4.563 billion. Italy has €3.611 billion and the United Kingdom is worth €3.149 billion. The remainder of the top twelve Spar countries have retail sales in the region of €1 billion to €1.5 billion. Spar China and Russia both surpassed the €1 billion sales barrier in 2012.

Introducing the new Spar International strategy “Growing our Future Together”, Dr. Campbell informed the congress delegates that international expansion has been a strategic goal of Spar International since its establishment in 1953. “We seek to work with local partners who have the vision and capability of providing modern food retailing in their local market and who subscribe to the Spar retailing principles.” Spar International says it will continue to work in developing markets with a key focus on Russia, China and the Middle East to expand the partner network. In each market, Spar International promotes a multi-format retail strategy of hypermarkets, supermarkets, neighbourhood stores and convenience stores.

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Dubai’s Worlds of Adventures to open in early 2014

IMG Group’s Worlds of Adventure theme park in Dubai is set to open in early 2014, a senior executive with the developer has said.

The theme park, which will be located in Dubai’s much-delayed City of Arabia development in Dubailand, will consist of four zones – the Marvel Universe, the Cartoon Network zone, the Lost Valley zone, and the IMG entertainment zone, as well as a 12-screen cinema, and external F&B and retail areas.

According to Alexander Page, vice president – marketing, Ilyas & Mustafa Galadari Group (IMG), construction is currently on track for the facility, which will consist of roller coasters, themed experiences and other attractions.

“Work is happening on two fronts. The on-site construction works have been moved forward significantly with structural columns and space frames being installed,” he told Hotelier Middle East.

“Thereafter the offsite ride manufacturing of various vendor sites is currently being done simultaneously with shipment planned in the later part of this year. So rides, the themes, the attractions and different pieces that make up the park are in different parts of the world being made and finalised,” he said.

The first phase of the theme park will be in excess of 1.5m sq ft, making it the largest indoor entertainment destination in the world. The park is designed to attract in excess of 20,000 visitors per day and ticket prices will be in line with other attractions.

“The pricing structure will be very competitive. We haven’t finalised it yet but we know what other attractions are charging. Our capacity is much higher, much larger, so we are not going to be overpriced whatsoever. We want people to come and enjoy the theme park,” said Page.

“In terms of the scale and size of it, it is very likely that you will need a full day if not much more to be able to try all the rides or the attractions so there will be day passes where people can come back within the same week, there will be annual memberships, VIP entries,” he said.

Earlier this month, plans for a dinosaur theme park were announced by IMG Group which claimed The Lost Valley will be the first of its kind in the theme park industry and will include animatronic dinosaurs and rollercoaster rides.

Spread over 270,000 square feet, the dinosaur attraction was the third to be announced in the 1.5m sq ft IMG Theme Park.

The first two zones will be designed around Marvel Comic and Cartoon Network characters, while the fourth and fifth zones will be announced in due course.

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Sports Direct expands into Austria and the Baltics

Sports Direct has announced that it is to expand internationally with the acquisition of majority stakes in two European sporting goods retailers.

The group has entered into an agreement to acquire a 51% equity stake in Sports Eybl & Sports Experts (EAG), the leading sporting goods retailer in Austria, for €10.5 million plus an agreed €30 million investment in the business.

Under the deal, Sports Direct will have the right to acquire the remaining shares in the company for €15.5 million during the next five years, while the current owners will also have the right to sell their remaining shares to Sports Direct for €5 million.

EAG’s wholly owned subsidiary, Sport Eybl & Sports Experts GmbH, operates two fascias. These include Eybl, which is marketed as Austria’s largest sports specialist, and Sports Expert which is focused on the value segment. Ebyl operates 29 stores in Austria and one in Germany while Sports Expert has 26 Austrian stores and two German outlets.

Sports Direct has also acquired 60% of Sportland International Group (SIG), the largest sporting goods retailer in the Baltic region.

SIG operates the Sportland, Sportland Outlet, Timberland, O’Neill, Nike and Nike Outlet retail chains in Estonia, Latvia and Lithuania. In the 12 month period ending 31 December 2012, SIG generated revenue of €61.6 million.

Commenting on the acquisitions, Dave Forsey, chief executive of Sports Direct, said: “The strategic investments announced today in Austria and the Baltic region represent a continuation of our previously stated European expansion plans. Expected benefits from these investments include increased scale for our international business, growing international awareness of our Group Brands and additional expertise in specialist product categories such as winter sports.”

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Shoprite opens new Swaziland store, helping job creation

Shoprite brings 150 jobs

NHLANGANO – Shoprite Checkers has added a stimulating effect to the economy of the small town of Nhlangano by availing about 150 jobs to locals.

The 150 employees will constitute staff for the retailer’s new outlet in Nhlangano as Shoprite- Checkers spreads its wings, adding to the growth of business in this burgeoning urban area.

The new store will be the second outlet in Nhlangano.

The company’s Corporate Communications Manager, Sarita van Wyk, said that it is all systems go for the opening of the new outlet, which is scheduled for June 20, 2013. “Shoprite has heard the call of consumers and will be bringing a world-class shopping experience at a lower cost to the doorsteps of the people of Nhlangano with the opening of a new Shoprite store.

“The supermarket will be located at the Zam Zam Shopping Centre along Masengula Street and will offer shoppers access to a wide range of quality products in a modern shopping environment,” she said.

Shoprite Nhlangano will cater for consumers’ daily, weekly and monthly food as well as household requirements with extensive ranges of groceries, non-foods and service departments such as a bakery, a fruit and vegetable department and a butchery.

For convenience, the store comes with a Money Market counter where many transactions can be concluded, such as airtime purchases.

A fully qualified pharmacist will also be available in the in-store pharmacy, MediRite, to attend to customers’ prescriptions, offer advice on the management of chronic medication, medication use, as well as other health related matters.

Van Wyk said all these services will make it cost-effective and timesaving to do shopping at Shoprite, since customers will get the opportunity to make use of all the services offered, under one roof.

Regarding job creation, Van Wyk said the company continuously aims to assist in creating jobs to contribute to the economy of the communities in which it trades.

In keeping with this approach, she said the new Shoprite will create employment opportunities for approximately 100 people from the surrounding area, as well as 50 more people in other contracted service related positions.

“Another contribution that Shoprite makes to the economy of Swaziland is that it procures as much stock as possible from local sources; especially fresh produce. The additional store will further boost local production,” she said.

As one of Africa’s largest food retailers, Shoprite believes that its success comes from offering all its customers well-known and trusted brands, as well as an extensive range of house brand items at the lowest possible prices.

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Dutch retail giant Spar plans to enter Lebanon

(Photo for illustrative purposes only)

Dutch supermarket chain Spar is to enter Lebanon with the opening of 10 stores over the next five years.

Spar, the world’s largest co-operative of independent food retailers and wholesalers, currently operates more than 12,000 stores across 35 countries worldwide.

The licensing agreement between Business Management Integrated (BMI) Holding and Abu Dhabi Co-operative Society will see Spar open supermarket, hypermarket and convenience store formats across the country, with the first due to launch in early 2014.

“We are very excited at the expansion and development of Spar in Lebanon and delighted to have BMI Holding on board,” said Dr Gordon Campbell, CEO of Spar International.

“We are confident that they will find excellent locations and open quality stores to provide Lebanese consumers with an exciting new customer experience,” he added.

Spar operates what it calls a ‘voluntary chain’ model, which see close co-operation of independent retailers and wholesalers underneath the Spar brand.

Earlier this year, Campbell told Reuters that Spar was seeking to open 30 stores across the Middle East by the end of 2015, including eight in Abu Dhabi and two in Qatar. It was also seeking to move into Oman and Saudi Arabia over the next three years, he added.

SPAR expects its Middle East operations to generate revenues of over $1bn in five to ten years, Campbell said. The company expects its global turnover to have hit $43bn in 2012, up 4.5 percent 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 $50bn as it expands into new markets.

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Dubai’s MAF said to eye Abraaj’s Spinneys stake

Dubai conglomerate Majid Al Futtaim (MAF) could seek to acquire a stake in regional supermarket chain Spinneys, the firm’s CEO said.
Speaking to Al Bawaba at the World Economic Forum in Jordan, MAF CEO Iyad Malas said his company was in the “early stages” of looking at deal to buy private equity firm Abraaj Group’s shareholding in Spinneys.
Abraaj currently holds the second largest stake in Spinneys, which operates supermarkets and hypermarkets in Lebanon, Qatar, Egypt and Jordan. The firm has plans to expand into other Gulf and African markets in the near future.
“The opportunities around acquisitions have been and are primarily going to be in retail, meaning supermarkets and hypermarkets,” Malas told Al Bawaba. Any deal for Abraaj’s Spinneys stake would be worth “below $500m”, he added.

Earlier this week MAF completed a $680m deal to buy out French supermarket chain Carrefour’s 25 percent shareholding in its Middle East joint venture. It is currently looking to raise at least $500m from the issue of a hybrid debt sale to finance this purchase
Malas told Reuters in an earlier interview at the World Economic Forum that MAF was eyeing capital investments from $600m and $1bn this year. The company is also said to be in talks with Egypt’s Mansour Group in regard to acquiring its chain of Metro supermarkets.
Abraaj earlier this year reportedly hired a bank to manage the sale of its majority stake in Spinneys, which was founded in Egypt in 1924 and acquired by Abraaj in 2004.
A spokesperson for Abraaj did not immediately respond to Arabian Business’s request for comment.

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Tesco Ireland appoints new chief executive

Tesco Ireland has appointed PJ Clarke as its new chief executive.
Mr Clarke, who has held a number of senior positions in the company, will succeed Tony Keohane.
Mr Keohane is to become chairman of Tesco Ireland from July, having served seven years as chief executive.
He has been chief executive since 2006, having joined the Tesco Ireland board following the acquisition of the Quinnsworth business in 1997.
“In that time, he has overseen the expansion of the company to become the leading grocery and general merchandise retailer in Ireland,” the company said in a statement announcing the appointments.
There are now over 15,000 people employed in 142 stores nationwide

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Retail in 2018 – Shop numbers, Online and the High Street full report

A GUIDE TO RETAILING IN 2018 BY THE CENTRE FOR RETAIL RESEARCH
The Centre for Retail Research published its analysis of how UK retailing will have changed by 2018 on 28 May 2013, entitled Retail Futures 2018.
Retail Futures 2018 forecasts that by 2018:
Total store numbers will fall by 22%, from 281,930 today to 220,000 in 2018.
Job losses could be around 316,000 compared to today
The share of online retail sales will rise from 12.7% (2012) to 21.5% by 2018 or the end of the decade.
There will be a further 164 major or medium-sized companies going into administration, involving the loss of 22,600 stores and 140,000 employees. Many of these companies will survive but at the cost of closing more than half their stores.
In spite of the Portas Pilots, the High Street will continue to suffer: around 41% of town centres will lose 27,638 stores in the next five years.
UK retailing has the highest proportion of online retail sales, so what happens here is being closed watched by foreign observers as Britain becomes a test bed for retail innovation.
Key catalysts for the looming retail crisis:
Consumer spending has increase by 12% since 2006 outstripped by retail operating costs (including rates) which have risen by 20%. It will be several more years until the UK returns to previous levels of growth: in fact GDP/head has not yet returned to the level it was in 2008/.
Customers are shunning the high street: their share of consumer spending has declined from 50% in 2000 to a predicted 40.2% next year.
As fewer shop in stores, online retail is set to account for 21.5% of total retail sales by 2018 from 12.7% today, the highest online retail share in the world
With such a high number of transactions carried out online, retailers with a strong web offering now need just 70 high street stores to create a national presence compared to 250 in the mid 2000’s
UK is facing a crisis. Retailing and retailers will either make clear strategic decisions that permit online retail to coexist with other retail channels in a multichannel world allowing bricks and mortar retailers to transform themselves, or, by avoiding making these decisions, multiple retailers will disappear or be so mortally wounded that a large minority of business categories become dominated purely online retailers
Much comment about retailing either sees shops as doomed (most shops will close as online takes over the majority of retail sales) or believes that online will peak, making the crisis shakeout in the industry (business as usual). In fact neither view is accurate, radical changes need to be made by retailers, town centres and the government to preserve what is best in retailing.
About the Report
Retail In 2018: Shop Numbers, Online And The High Street is a long report and is not available to download from this site. Please enquire to research@retailresearch.org if you need a copy.
Store Vacancies
Store vacancy rates across the country have increased from 5.4% in December 2008 to 14.1% in March 2013 (according to the Local Data Company), a rise of 161%. Without intervention, the vacancy rate can rise yet further, perhaps above 20%.

Store Closures
Stores are always closing – and reopening – but this time the pace of change is considerable and the total number of shops by 2018 is expected to fall by 22% over the next five years to 222,000.

‘Thriving’ and ‘decaying’ retail towns and cities
Across the country the situation varies drastically as disadvantaged retail pockets become more prominent. More towns will need some reduction of retail space because of the fall in the demand for shops. However Retail Futures 2018 predicts that more than a third of town centres (41% or 153 stores) could experience a rapid decline by 2018 if no action is taken. Just over a fifth (78 or 21%) of towns are declining in retail terms and 75 are stable but under pressure. The retail centres most vulnerable are those near low-income populations located on secondary or tertiary shopping areas.
Of course the shops in some prosperous and tourist areas will continue to do well, but Wales, the North and the Midlands can expect a much higher proportion of stores to be shuttered.
The number of high street stores is expected to fall by 19.9%, but an even greater impact will be felt by neighbourhood stores. These will decline by 34,587 (-26.2%) as a result of the declining profitability of neighbourhood shopping in many areas, the unwillingness of multiple retailers to continue operating in small neighbourhoods and the move towards perceived lower prices and better availability of stores in town centres, retail parks and internet shopping.
But it is not only the high street that is affected. Major retailers like Tesco, Wickes, ASDA and B&Q have announced dramatic reductions in opening large new stores (though convenience is still massively important) and all have plans to subdivide giant stores, leasing space to other retailers.
Regional Impacts
The destinations that do well will be those: serving a mainly prosperous hinterland; areas of growth, new housing and young families; easy-to-reach tourist areas aimed at middle-income families; and areas where unemployment is low. The best performers will be areas like London, the South East, key shopping cities like London, Birmingham, Leicester, Manchester, and Glasgow, and tourist areas like Oxford, Harrogate, and Brighton. There will be retail problem areas within otherwise thriving decent retail zones (eg Oxford) and successes in areas where we expect large percentage falls in shop numbers. But in very general terms the changes in store numbers reflect the North-south divide.
Regional store closures and vacancy rates

Online Retail
Online retailing as a percentage of all retail sales is now 12.7%. Food online sales are very low (3.7% of all food sales) so that the share of non-food is now up to 19%. This will change quickly over the next five years, although we expect all four main grocers to develop massively their food online offers so that with Waitrose and Ocado the food online share should be up to 9.5% by 2018.
Growth of online retail

These figures are estimates. It may take a year or two longer before online retail gains 21.5% of the retail market but many commentators feel that the online share will get to 25% by somewhere around 2020-2023.
The Role of Shops
Retail stores will remain an important, although smaller, part of retailing in high streets, malls and retail parks as online continues to grow. The ‘normal’ retail model needs revisiting, under the combined pressures of high costs, consumer reluctance to spend, and rapid growth of online retailing.
The Shoppers of the Future
Customers now ‘shop’ in multiple ways, checking a store’s website, visiting one or more stores, looking at product reviews, viewing the prices of competitors on a smartphone whilst standing outside a store, and choosing finally whether to buy the goods in-store or online and collect it in-store or have it delivered to a nominated address. Retailers have to make clear strategic responses to the changing patterns of how consumers shop, including: deciding the proper number, type and location of stores (and the speed of any necessary disinvestment from stores); and how to integrate fully their physical stores, the online sites and other channels such as social media coherently.
The High Street of the Future
High streets are an essential part of town centres, creating employment and vitality; the best of them bring tourists and shoppers in – developing services, leisure and entertainment markets as well as retailing. Retail Futures 2018 argues that high streets are threatened by the current changes in retail structures and shows that the town centres of 153 UK towns (41% of the total) will experience a rapid decline as a result of changing retail patterns and need to shrink to survive. Some smaller and less successful secondary and tertiary sites may disappear almost completely. Retail Futures 2018 recommends that a pump-priming fund of £320 million is required to start redeveloping these problem town centres to turn failing and empty shops into good residential accommodation, create more service/entertainment/leisure outlets, and/or provide offices, doctor’s surgeries, classrooms/meeting rooms or other facilities for which there may be a local demand. As a result of this policy perhaps 15,000 – 20,000 new homes could be created over four years.
Don’t make a transformation into a crisis
Although retail change might seem to concern only retail employees and change-averse retail businesses, the transformation will have unintended consequences for the many hundreds of £billions tied up in retail property by pension funds, investment companies, shopping centre owners and retailers themselves. The current business model is intimately involved with real estate: a significant fall in property prices caused by major falls in the demand for stores (and store profitability) will affect all property assets for many years to come. One response will be to reduce rents (and therefore the profitability of developments). It is already having a significant negative effect on many UK high streets and a detrimental impact on town centres. Action now will prevent the transformation of retailing from becoming a long-term crisis for property markets and town centres.

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New report forecasts one in five uk stores will close by 2018

A new report published by the Centre for Retail Research looks at how UK retailing will have changed by 2018. The ‘Retail Futures 2018′ report forecasts that by 2018:

Total store numbers will fall by 22%, from 281,930 today to 220,000 in 2018
Job losses could be around 316,000 compared to today
The share of online retail sales will rise from 12.7% (2012) to 21.5% by 2018 or the end of the decade
The report also found that a further 164 major or medium-sized companies could go into administration, involving the loss of 22,600 stores and 140,000 employees. It said many of these companies will survive but at the cost of closing more than half their stores.

The report said that in spite of the Portas Pilots, the high street will continue to suffer, with around 41% of town centres set to lose 27,638 stores in the next five years.

It said key catalysts for the looming retail crisis include:

Consumer spending has increased by 12% since 2006 outstripped by retail operating costs (including rates) which have risen by 20% – it will be several more years until the UK returns to previous levels of growth: in fact GDP/head has not yet returned to the level it was in 2008
Customers are shunning the high street – their share of consumer spending has declined from 50% in 2000 to a predicted 40.2% next year
As fewer shop in stores, online retail is set to account for 21.5% of total retail sales by 2018 from 12.7% today, the highest online retail share in the world
The report says retailers will either make clear strategic decisions that permit online retail to coexist with other retail channels in a multichannel world allowing bricks and mortar retailers to transform themselves, or, by avoiding making these decisions, multiple retailers will disappear or be so mortally wounded that a large minority of business categories become dominated purely online retailers.

Across the country the situation varies drastically as disadvantaged retail pockets become more prominent. More towns will need some reduction of retail space because of the fall in the demand for shops. However Retail Futures 2018 predicts that more than a third of town centres (41% or 153 stores) could experience a rapid decline by 2018 if no action is taken. Just over a fifth (78 or 21%) of towns are declining in retail terms and 75 are stable but under pressure. It said the retail centres most vulnerable are those near low-income populations located on secondary or tertiary shopping areas.

The number of high street stores is expected to fall by 19.9%, but an even greater impact will be felt by neighbourhood stores. These will decline by 34,587 (-26.2%) as a result of the declining profitability of neighbourhood shopping in many areas, the unwillingness of multiple retailers to continue operating in small neighbourhoods and the move towards perceived lower prices and better availability of stores in town centres, retail parks and internet shopping.
But it is not only the high street that is affected. Major retailers like Tesco, Wickes, ASDA and B&Q have announced dramatic reductions in opening large new stores (though convenience is still massively important) and all have plans to subdivide giant stores, leasing space to other retailers.

The High Street of the Future

High streets are an essential part of town centres, creating employment and vitality; the best of them bring tourists and shoppers in – developing services, leisure and entertainment markets as well as retailing.

Retail Futures 2018 argues that high streets are threatened by the current changes in retail structures and shows that the town centres of 153 UK towns (41% of the total) will experience a rapid decline as a result of changing retail patterns and need to shrink to survive. Some smaller and less successful secondary and tertiary sites may disappear almost completely.

Retail Futures 2018 recommends that a pump-priming fund of £320m is required to start redeveloping these problem town centres to turn failing and empty shops into good residential accommodation, create more service/entertainment/leisure outlets, and/or provide offices, doctor’s surgeries, classrooms/meeting rooms or other facilities for which there may be a local demand.

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Mr Price online shopping site goes global

Mr Price online shopping site goes global

Mr Price website MRP.co.za
Mr Price will launch its online shopping website globally on Monday, meaning shoppers from around the world will be able to buy the value fashion retailer’s apparel.

The company’s e-commerce venture first went live in South Africa last year.

“The launch of the apparel division’s online sales platform, mrp.co.za, gave customers access to the entire merchandise range via web or mobile,” Mr Price CEO Stuart Bird said last week. “Although only launched midyear, the site was the most searched retail brand on Google SA for 2012.”

The retailer group’s other chain stores, Mr Price Home and Mr Price Sport, will commence online trading later in the year.

According to Mr Price, online presence is a key enabler to enter foreign markets, especially where space is a constraint and rental costs are high.

This is especially the case in several African countries, where the sluggish pace of property development and concentrated power create a significant hurdle for expansion.

“Online allows you to avoid costly investment upfront and to test new markets,” Mr Bird said. “We have acquired the domain mrp.com so the rest of the world is going to be able to shop with us.”

According to Avior Research analyst Michael McLeod, while the group’s wider online offering supported its goal of becoming a global brand, the African shopper would be more of a pertinent target. “It’s going to help them get up into Africa. I really don’t think they’re going to have much play from a big international standpoint,” he said.

“Their price points will work very well for the African market. They’re quite adaptable; we’ve seen this in how they change with fashion.

“Their low-priced trendy clothing should suit that market well .”

Urbanisation has led to the growth of formalised retail markets that are fuelling an upsurge of consumer culture in Africa. Retail companies are targeting the continent’s mushrooming middle class.

Local retailers Woolworths, Truworths and The Foschini Group are also pushing into Africa as demand for modern goods rises. It is estimated that there are now about 50-million middle-class households across Africa, measured as those with incomes of at least $20,000 a year — about the same as in India.

Last week, Mr Price said it was reviewing six possible store sites in Nigeria and Ghana, after the success of its test shops in the regions.

Noah Capital Markets retail analyst Roger Tejwani said it would benefit Mr Price to expand into Africa. ” The problem is the lack of infrastructure. They’re going to use online to bridge that in the interim.”

Mr Price said all international orders would be South Africa for now and that shoppers could use PayPal and debit or credit card for payment.

“There are two delivery options: economy, which will be sent via a hybrid of a courier and the destination country’s respective postal service; and express, which will be a courier service.

“Economy will take about seven to 10 working days, while express will take two to three .”

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Marks & Spencer Stops New Store Openings Due to Limited Retail Demand

Marks & Spencer, one of the UK’s largest retail operations, will not open any new stores from 2016 onwards after falling high street income has had a major impact on the company’s bottom line. The company, founded in Leeds in 1884, is Britain’s largest clothing retailer, operating over 766 stores throughout the UK.

The well-known clothing firm has faced declining demand amongst retail shoppers and increased competition from other clothing brands. With 766 stores operating in the UK, it also faces the possibility of oversaturation, where its stores are simply too close to each other to produce additional revenue on a per-store basis.

Marks & Spencer is one of the world’s largest retail clothing operations, with stores in both the United Kingdom – where the company was founded – and in a variety of overseas markets such as Hong Kong and Singapore. The company also operates an online store – M&S.com – that has turned into a major asset for the company.

As one of the nation’s retail giants, Marks & Spencer’s decline could be seen as a mirror image of the issues facing Main Street commerce as a whole. One in eight of the stores in Main Street shopping areas are non-operational, indicating a major downturn in retail shopping across the entire nation.

Despite the issues facing its retail operation, Marks & Spencer remains a healthy and profitable business. The company’s online store has generated great returns and has become a major focus of the company. Marc Bolland, the company’s chief executive, confirmed that M&S.com is the company’s ‘new flagship store.’

While the company’s pre-tax profit has decreased in recent years, currently reaching £564 million, down from a peak of over £1 billion several years ago, it remains quite profitable. The downturn in clothing sales has been balanced by a slight increase in the company’s food sales and a potential expansion in its retail food business.

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House of Fraser online sales jump by 53%

House of Fraser’s flagship Oxford Street store in London. Online sales accounted for 10.9% of total sales in the year to end of January
A dramatic increase in online sales has helped House of Fraser achieve a 3.3% rise in overall turnover to £1.2bn. However, the store chain continues to struggle to make a profit.

A wider range of products and better delivery options helped boost online sales 53% and accounted for 10.9% of total sales last year, said John King, chief executive of the privately owned department store chain.

Underlying earnings for the year to end of January rose 4.3% to £61.1m. But interest charges and other costs pushed the company into a small pre-tax loss, according to analysts. Although total sales rose, nearly all the growth came online, where costs are higher.

With conditions on the high street remaining tough, House of Fraser did not open any new stores over the year and closed a small outlet, an experimental store in Liverpool designed to help shoppers pick up items ordered online.

Nick Bubb, an independent retail analyst, said: “It’s all very well growing online but, given the costs of distribution of online product, it’s hard to move profits forward if stores are seeing sales under pressure. They are running hard to stand still.”

Don McCarthy, the chairman of House of Fraser, said market conditions had been challenging. “We expect economic conditions to remain subdued and it remains difficult to assess when market conditions will improve. Nevertheless, we are confident that the group’s business model, with our premium brand positioning and strong multichannel operations, is highly relevant to changing consumer habits and are confident that the group will continue to grow and develop for the foreseeable future,” said McCarthy, who owns 20% of the retailer.

The chain, which has 60 stores, cut its debts by £6m to £157m despite ongoing investment in sites including its flagship Oxford Street shop in London.

Once part of the empire of collapsed Icelandic investment firm Baugur, House of Fraser has been the subject of takeover speculation this year. It is rumoured to have held talks on the sale of a stake in the business or stores with unnamed Qatari investors, rival department store John Lewis and Mike Ashley, the billionaire owner of Sports Direct.

Speculation over a possible sale has increased because House of Fraser’s largest investor, Landsbanki, the Icelandic bank which owns a 35% stake, has been offloading assets inherited from Baugur. Landsbanki sold the London toyshop Hamleys in September and a major stake in frozen food store Iceland last spring.

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LK Bennett appoints former Burberry executive as new merchandising director

Fashion retailer LK Bennett has appointed Sarah Thornley as merchandising director, based at the company’s headquarters in London’s Cavendish Square.

Thornley was previously at Burberry for 13 years, most recently as global director of merchandise for online and director of merchandise for Europe. Prior to this Sarah worked at luxury multi-brand and department store Harvey Nichols.

Didier Drouet, LK Bennett CEO, said: “Sarah Thornley brings with her a wealth of expertise in merchandising, particularly from a luxury perspective. We look forward to developing current opportunities and are excited about our continued UK and International expansion in our stores and online.”

LK Bennett has significant retail and wholesale presence in key international markets including North America, Europe and the Middle East and is now operating close to 170 branded locations around the world, including 114 in the UK and Ireland, as well as being online at LKBennett.com.

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Mall of Qatar set to open in 2015 pictures…

DOHA: The Mall of Qatar is scheduled to open in the third quarter of 2015, developer UrbaCon Trading & Contracting (UCC) announced yesterday. Construction on the project has been underway since 2012 and is proceeding on schedule. The Mall of Qatar is expected to welcome an estimated 20 million customers annually.
The total project cost is in excess of QR3bn and has been secured with funding from Qatar National Bank. Located at the intersection of Al Rayyan Highway and Celebration Road, the project is adjacent to Al Rayyan Sports Club and a future FIFA 2022 World Cup Stadium.

A dedicated Metro Station will be integrated into the mall, providing more access to visitors. In addition, the project will provide spacious parking for over 7,000 cars. Over 162,000 square meters of retail leasable space on three levels will make it one of Qatar’s largest shopping and entertainment destinations.

Shem Krey, Deputy Managing Director, Mall of Qatar said: “We are launching the Mall of Qatar at a time when there is clearly enormous untapped demand for quality integrated shopping, dining and entertainment facilities in the country. Our research has shown there is a significant amount of capacity that has to be met in the retail area and our Mall will be a major step in fulfilling demand. The Mall of Qatar is also geared towards helping the broader economic growth and prosperity of the country.”
Spread over a building area which is the equivalent size of 50 FIFA football pitches, the Mall will have a major hypermarket, five department stores, 20 international restaurants and an indoor streetscape with double height flagship stores from across the globe. In addition, unique children’s wear, popular price and young urban lifestyle brands will be clustered into districts creating synergy between retailers and providing the maximum in customer convenience.

A two level luxury court at the south end of the complex will have individually articulated shop fronts interspersed with indoor/ outdoor cafes and patios and a premium concierge lounge. A major luxury brand hotel is planned, as well as a signature restaurant on the outside surrounded by terraces overlooking the luxury court.
The exterior of the whole mall will be animated with storefronts, cafes and extensive landscaping to connect to customers as soon as they drive in. UrbaCon Trading and Contracting is developing, managing the design and construction of the complex and will operate the Mall for the owner.

The Mall of Qatar has been designed by internationally acclaimed architects Chapman Taylor and KEO. McARTHUR + COMPANY, the world renowned retail specialists, have been selected to market and lease the mall.

The Mall of Qatar is being introduced for the first time to the public at Cityscape Qatar from May 27 to 29 at the Doha Exhibition Centre and an Official Retailer Launch Event is planned for October this year at the Museum of Islamic Art.

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Amazon plans ‘greenhouse-style’ HQ: in pictures

US retail giant Amazon has unveiled plans for a futuristic greenhouse-style headquarters “where employees can work and socialize in a more natural, park-like setting”. Here are the company’s proposals.
The internet company revealed photos and sketches of the plan, which will be submitted to Seattle city officials, becoming the latest of the technology heavyweights to unveil a bold new headquarters plan.
“The generative idea is that a plant-rich environment has many positive qualities that are not often found in a typical office setting,” according to Amazon’s proposal.
The company revamped its original plan from a six-storey rectilinear structure to “a series of intersecting spheres with ample space for a wide range of planting material”, the document said.
“While the form of the building will be visually reminiscent of a greenhouse or conservatory, plant material will be selected for its ability to co-exist in a microclimate that also suits people.”
The plan includes 65,000 square feet (6,000 square metres) of office space and high bay spaces on five floors capable of accommodating mature trees.

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Marks & Spencer sees lowest profits in four years

Marks & Spencer’s annual profits fell to their lowest level in four years today, as food sales were offset by a slump in clothing sales.

Underlying pre-tax profits for the year were £665.2 million, a fall of 6% on a year earlier and well below City forecasts for £710 million at the beginning of the financial year, since when expectations have been revised.

It is also a far-cry from the retailer’s heyday in 2008 when it made more than £1 billion.

The results mean chief executive Marc Bolland remains under pressure to turn around the high street stalwart, particularly in the wake of an executive reshuffle and the launch of a new “turnaround” clothing range last week.

Like-for-like UK sales fell by 1% with general merchandise down 4.1% though food did better, improving by 1.7%. Overall group sales were up 1.3%, buoyed by international takings.

Mr Bolland, who took charge of the retailer in 2010, recently reshuffled his team amid an alarming slide in clothing.

Sales from the division were down 2.4% in the year but had been as much as 5% lower at the start of the period until the company took “decisive action”.

The company said the new fashion team, led by John Dixon, the head of general merchandise brought over from M&S Food, and style director Belinda Earl, the former Debenhams and Jaeger boss, was “reinvigorating” its ranges.

Today it announced yet another change at the top, as Steven Sharp, executive director of marketing, has retired after nine years to be replaced by Patrick Bousquet-Chavanne, formerly of Estee Lauder.

M&S said: “The improvement in product will take time to come through, but our customers will start to see the benefits of the changes from this summer.”

Last week’s launch of the retailer’s new fashion range, available in stores from this summer, is being seen as the litmus test of the new regime and a key moment in Mr Bolland’s attempts to turn around the fortunes of M&S.

Announcing today’s results, Mr Bolland said M&S had made “strong progress” in some areas while chairman Robert Swannell said the retailer was “building longer term foundations”.

M&S also said its sales had been affected by the squeeze on household conditions as well as unseasonable weather. But revenues were up from £8.87 billion to £8.95 billion.

Shares were up nearly 2% on the results, as the profits fall had been widely expected by markets.

Mr Bolland told BBC Radio 4’s Today programme: “It’s been not good enough but still we have got the largest business in the UK by far.”

He said quality “has certainly been good and better than competitors”, but the retailer was now aiming “to bring something that really delights and surprises the customer so we can do better than we have done before”.

“Secondly, it’s about style. We can bring improved style, more trends to customers than we have done so far and where we have done that in our womenswear it has really helped.”

Shop rates “should be frozen”

Business rates should be frozen for two years to give threatened high streets “breathing space” to deal with the rise of internet shopping, think-tank Policy Exchange has said. However, it added that if traditional retailers failed to take the chance to reinvent themselves some shopping centres might have to be allowed to die.

Figures released yesterday showed shop vacancies have surged to a new high of 11.9% as high-profile retail failures knock holes in shopping centres.

High streets have been “vastly outperforming” shopping centres and out-of-town retail parks, boosted by a 5% increase in evening drinkers, diners and clubbers.

The think-tank said a four-fold increase in online purchases since 2006 was the main factor behind the growing number of boarded-up shops.

Head of housing and planning Alex Morton said: “We believe that there is a case for a two-year freeze on business rates.

“But this only makes sense in the context of giving breathing space for further changes to retail policy to bring it into the 21st century.

“Policy needs to give high streets the best chance to reinvent or renew themselves but it should primarily focus on removing barriers to consumer choice that push up the cost of living, and must not assume all high streets can or should remain as shopping centres.”

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Spinneys to roll out online shopping this year

Spinneys to roll out online shopping this year

Food retail chain Spinneys will roll out online shopping in territories across the Middle East this year, the company’s CEO told Arabian Business.

The Beirut-based grocer, founded in 1924, will introduce online retail services in Lebanon, Qatar, Jordan and Egypt to complement its expansion in retail outlets, Michael Wright said.

The functionality will allow customers to compile grocery lists via the internet that can then arranged to be delivered to the buyer’s home, or collected in-store later at the shopper’s convenience.

“We’re going to launch it in Lebanon in May, with the intention of rolling it out to all the other countries,” Wright said in an interview in Dubai. “Because we have a lot more resources in Lebanon, we trial everything in Lebanon and then roll it out to the other countries from there. It will be before the end of the year in all the other countries.”

Spinneys, which saw more than 20 percent growth to almost $1bn in revenue last year, also has a major presence in the UAE, although this is operated by a local franchise partner.

Wright said that the way online retail is implemented by Spinneys will be tailored to each country market it has a presence in.

In Qatar, Spinneys will target customers with “more affluence”, he explained, and will deliver items directly from the store to shoppers’ front doors.

“The infrastructure in Qatar is as such that we can easily make large deliveries and have a much shorter delivery time with a fewer number of customers.”

In other markets the firm will target higher volumes of lower value deliveries, but use a system of hubs to shorten delivery times.

“In Egypt, we’ll have to have hub-and-spoke, so we’ll take the product into sub areas [because] you can’t send the truck backwards and forwards in the high traffic,” Wright said.

The Spinneys chief said that the company was still pushing ahead with investments in traditional retail real estate over the coming 12 months.

The company plans to open two new outlets in Qatar and a further two in Lebanon at a total cost of $30m, as well as new stores in Egypt, which will mainly come online in 2015.

Wright said that Spinneys, which does not own its own stores but leases them from local partners, will finance its expansion through cash reserves and bank borrowing.

Wright said that Spinneys success going forward would rely on striking a fine balance between offline and online retail models. “Part of it is the offering inside the shop, it’s the loyalty, how we tailor the promotions to the individual consumer and then deliver it to them when they wish to have it delivered,” he said.

“It dovetails into the whole way we’re changing our business.”

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Tesco “looking for JV partner in China”

Tesco is reportedly looking for a partner in China, a market the UK retail giant has been in for almost a decade but where it has slowed expansion in recent months.

The Financial Times yesterday (19 May) reported Tesco, which has operated in China since 2004, wanted to form a joint venture to continue expanding in the country while using fewer resources.

The FT cited three anonymous sources. Tesco has declined to comment. “We have refused to comment and we have nothing further to add,” the UK’s largest retailer said when contacted by just-food today.

When Tesco reported its annual results last month, the company said it had taken “a more measured approach to our growth in China” in the last year.

Tesco, which is present in 12 markets, has over 130 stores in eastern China. Two years ago, Tesco raised CNY725m in a bond issue in Hong King to fund its expansion in China. “China is an important market for us and represents a great growth opportunity,” CFO Laurie McIlwee then said. A month later, a senior executive was quoted as saying Tesco planned to open 25 stores a year in China.

Since then, Tesco has become more cautious about its prospects in China. In the 12 months to 23 February, Tesco opened 12 outlets and closed five others as part of a focus on three regions in the country. Over the year, Tesco’s like-for-like sales fell 1.1%

“We still see an excess amount of new space being opened in the market – ahead of customer demand – and we have moderated our pace of development accordingly,” it said.

Tesco insisted China remains “a strategically important market” for the company. This year, it plans to launch an online grocery service in Shanghai.

However, Tesco appears to want to divert more resources to other markets in Asia. “In line with our efforts to move to a more sustainable balance of growth and returns, we have adopted a new approach to capital allocation between our international markets. As such, we intend to commit a greater proportion of our capital investment to Korea, Thailand and Malaysia where we have strong positions and significant potential for further growth,” Tesco said when it published its annual results last month.

“In our European businesses, we will concentrate on holding our current market positions and improving returns. In our less mature markets – China, Turkey and India – we will focus our efforts on establishing and then pursuing a profitable approach to growth.”

Reflecting on the FT report today, Shore Capital analyst Clive Black said the market would support Tesco teaming up with a local player in China.

“The story is not confirmed but if an appropriate partner could be found it may be welcome news, helping local insight in a market that pure Western plays struggle to effectively penetrate in our view. Such a move would also assist the group’s drive to better capital discipline and we believe would be welcomed by the market,” Black said.

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Giorgio Armani enjoys sales boost after opening 104 new shops

Giorgio Armani at the Emporio Armani spring/summer 2013 collection in Milan. Photograph: Stefano Rellandini/Reuters
While many firms based in southern Europe are finding business tough, the designer label Giorgio Armani is continuing to thrive.

Sales at Armani’s fashion house rose 16% to €2bn in 2012, faster than a year earlier thanks to growth in all geographical regions and after the opening of 104 new shops worldwide, taking the total to more than 2,200. Sales in China slowed slightly but still rose nearly 40%, and operating profits climbed 20% to €340m.

The Milan-based luxury goods maker, which counts movie and music stars including Cate Blanchett, Adele and George Clooney among its customers, is sitting on a €565m cash pile, giving it ample firepower to make acquisitions. But the designer has ruled out a spending spree: “To become the head of a conglomerate would mean destabilising a very delicate balance,” he said. “Personally, I have always linked good liquidity to concepts such as independence and solidity.”

Armani, 77, does not have an obvious heir to his empire. He said he had planned for his succession but declined to give details. “I would like to reassure you. Everything is under control,” Armani said. “I have been planning the ‘after-me’ phase for years. I have a trusted working group that will be able to safely manage the transition when the moment comes.

“Pragmatism is one of my strengths. Do you think I could fail to address a crucial issue such as my succession?”

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Laura Ashley to pay shareholders special dividend

The company said it will pay the special interim dividend of 0.5p per share to “show our appreciation to the shareholders for their continued support”.

The dividend will mean a pay-out for the Malaysian investors that control around 60pc of the company. This includes the MUI Group, the conglomerate which rescued Laura Ashley in 1998 and holds 34pc, and Bonham Industries, the investment vehicle of chairman Dr Khoo Kay Peng, which holds 25pc.

Laura Ashley founded the company with her husband Bernard, later Sir Bernard Ashley, in 1953 when they began making headsquares, tablemats and napkins out of fabric they had dyed and printed themselves in the kitchen of their Pimlico flat.

Mrs Ashley had been inspired to start printing fabric after visiting a Women’s Institute exhibition at the Victoria and Albert Museum on handicrafts.

Mrs Ashley and Sir Bernard, who quit his job as a stockbroker in the City to support his wife’s fledging operations, began to focus on producing scarves for retailers.

The growing popularity of Laura Ashley’s floral prints led to the couple leaving London and setting up in the mining heartland of Wales, where Mrs Ashley was originally from.

Laura Ashley set up its base in the former railway station at Carno in Powys, where it grew into a national and then global fashion brand.

Mrs Ashley developed the company’s products – including a move from casualwear into social dresses in 1966 – while Sir Bernard developed the business.

Laura Ashley opened its first shop in 1968 and grew into 450 around the world by the end of the 1980s, including sites in cities such as Tokyo and San Francisco.

However, in 1985, Laura Ashley died after falling down the stairs while celebrating her 60th birthday.

Two months after her death, Sir Bernard successfully floated Laura Ashley with it valued at £200m, but the company ran into turmoil in the 1990s without its eponymous co-founder.

In 1998, MUI Group invested in Laura Ashley with the retailer teetering on the brink of collapse and its Welsh factories closing.

Since then, Laura Ashley has been rebuilt. In the last year, it posted a 9pc increase in annual pre–tax profit to £20.1m with sales in the UK grew 3.1pc to £263m.

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Burberry profits up 14% as Chinese sales surge

Luxury fashion label Burberry has today reported a 14 per cent rise in adjusted pre-tax profit to £428 million as strong sales in its Chinese operations drove growth.

Total revenue saw an eight per cent uplift to £2 billion for the year ended March 31st 2013, though the group was detrimentally impacted by costs relating to the strategic ending of its fragrance and beauty licensing agreement.

Retail revenue jumped 12 per cent over the year while LFLs rose five per cent as retail now accounts for 71 per cent of total revenue, up three per cent on 2012.

Average retail selling space jumped by 13 per cent though the group conceded that “retail trading was uneven” during the year.

Nearly 90 per cent of Asia Pacific sales came from retail as China and Hong Kong both saw double-digit growth over the year and its Chinese division accounted for 14 per cent of total sales.

Upgrading its Chinese and flagship markets store portfolio is a key focus for the label as the Chinese appetite for all things luxury remains strong and a net seven stores were opened in the region, including two in Hong Kong.

In Europe, total sales increased six per cent as LFL store sales were “broadly unchanged” for the majority of the year after a strong start to the first quarter.

New European store openings were mainly in flagship markets such as London, Milan and Rome, taking the total to 23 mainline stores opened during the year.

Applauding “an exceptional year for Burberry”, Anusha Couttigane, Fashion Consultant at analyst firm Conlumino, said: “These results are undoubtedly due to considerable space expansion over the year: the company opened no fewer than 45 new locations, 23 of them mainline stores.

“This was underpinned by extended formats in the London flagships at Regent Street and Knightsbridge, demonstrating an enduring commitment to the home market.

“And, despite plans to close up to 25 branches across the board in 2014, another 35 openings are expected, of which eight are planned for China, including three flagship stores in Shanghai.

“The company has also focussed on building its online presence.

“In the UK, this has been reinforced by its sustained Acoustic campaign, which highlights Burberry’s increasing interaction with the emergent music scene.

“Burberry’s apparent disparate approaches in the UK and Asia in fact denote very careful consideration of the cultural tides in each of its markets.”

However, profits over the first half of the new year are expected to be lower than last year, the group warned, after issuing a shock profit warning last September amid disappointing sales.

Wholesale sales dipped one per cent over the year as the label reduced this arm of the business in favour of a focus on its retail operations, rationalising its wholesale accounts, particularly in Europe.

Excluding Beauty, Burberry expects a 10 per cent decrease in underlying wholesale sales in the six months to September 30th 2013, despite increasing its net franchise stores by eight over its current full year.

Nonetheless, Burberry CEO Angela Ahrendts, commented: “Finishing the year with a strong retail performance both online and offline, Burberry achieved record revenue and profit in 2012/13.

“Looking ahead, although the macro environment remains uncertain, Burberry is well positioned with opportunity by channel, region and product.

“With the integration of Beauty in April, we have added another exciting growth platform.

“Our brand momentum, proven strategies and closely connected global team provide confidence in Burberry’s future performance.”

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UK: Tesco plots overseas expansion for F&F

Supermarket retailer Tesco is to expand its F&F clothing brand into new markets across the Middle East and Central Asia, with plans to open more than 50 franchise stores over the next five years.

The UK’s largest retailer said it will work with existing franchise partner Al Hokair to open stores in Kazakhstan and Georgia, Armenia and Azerbaijan. Up to six stores are planned this year, with the first one due to open in the Kazakh capital, Astana, next month.

In the Middle East, F&F will work with Dubai-based Al Futtaim to open stores, starting from this autumn. The new stores will take the same format as the first franchise store that opened in Saudi Arabia last May.

“We’ve had a strong year and our combination of good quality and contemporary design appeals to customers across the world,” said F&F chief executive Jason Tarry. “I’m excited to see F&F moving into these new markets, where there is an established and growing retail industry.

“Franchising enables us to combine the strength of the F&F brand with the local knowledge and expertise of our partners.

“This announcement builds on the success of the first franchise stores and demonstrates our commitment to growing the brand internationally through this model – I’m confident these new deals will accelerate our growth.”

F&F clothing is sold in 12 countries, including the Czech Republic, Poland and Saudi Arabia. In the UK, F&F sales increased by 9% to more than GBP1bn (US$1.52bn) over the last year.

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Dubai retailer unveils $12,250 gold iPhone

Luxury smartphone retailer Givori this week launched its new 2013 collection, which included an Italian handcrafted, 19 karat gold iPhone which retails at AED45,000 ($12,251) and is adorned with alligator skin, diamonds and gemstones.

As part of Givori’s Charlotte Spring/Summer 2013 Collection it has signed an agreement with Dubai’s Damas Jewellery to sell the upmarket iPhone in Damas Les Exclusives boutiques across the Gulf.

Customised and 100 percent hand-crafted in Italy, the Charlotte iPhones retail for AED 45,000 and is limited to fifty individually numbered pieces worldwide.

“Givori’s beautiful products are perfect for Damas,” said Josh Morar, Brand Director, Damas, which will initially stock Givori at its Burj Al Arab Hotel, Dubai Mall and Wafi branches, before extending the partnership across the region.

“We are delighted to announce our new partnership with Damas, which is an explicit recognition that Givori products are not just luxury smartphones – they are unique pieces of jewellery in their own right,” said Stephanie Holden, General Manager at Givori.

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UAE economic growth accelerates to 4.4% in 2012

Economic growth in the United Arab Emirates accelerated to 4.4 percent in inflation-adjusted terms in 2012 from a downwardly revised 3.9 percent the previous year as activity picked up across all sectors, its statistics office said on Sunday.
“One of the most important factors is the role played by good and stable oil prices in general over the last year,” the National Bureau of Statistics in the OPEC member said in a data commentary.
“All economic activities saw positive improvement in their growth rates in 2012, which has positively reflected on the value of the country’s GDP (gross domestic product),” it said.
Oil prices averaged $112 per barrel last year, up from $109 in 2011, the office said, adding that the non-oil sector share on the Gulf country’s real GDP was estimated at 67.3 percent in 2012.

Analysts polled by Reuters in April forecast GDP growth in the UAE, the second largest Arab economy after Saudi Arabia, to slow to 3.3 percent this year.

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Shop vacancies up as high streets outperform shopping centres

Shop vacancies have surged to a new high of 11.9% as retail failures including Comet and Jessops impacted shopping centres.

The percentage of empty UK shops in April worsened from 10.9% in January and was the highest rate since the British Retail Consortium/Springboard survey began in 2011.

High streets have been “vastly outperforming” shopping centres and out-of-town retail parks, boosted by a 5% increase in evening drinkers, diners and clubbers.

BRC director general Helen Dickinson said: “It’s a major concern that the vacancy rate has reached a record high, driven by increases in almost every part of the UK, with some regions like the South West seeing a significant leap in empty shop numbers.”

She added: “The unsettled weather at the start of the month seems to have created pent-up demand, which brought many of us out to shop when more spring-like weather finally made an appearance.”

High street footfall was up 3.4%, the strongest performance since December 2011, but shopping centre visitors fell 3%.

Diane Wehrle, retail insights director at Springboard, said: “This disparity is partly due to the fact that many of the high-profile retail failures – reflected in the increased vacancy rate – have been located in malls, creating holes in their retail frontages which have adversely affected their attractiveness to shoppers.

“The resilience of high streets is also likely to be a function of their diversity, as they have an offer that spans more than just retail.”

Local growth minister Mark Prisk said: “We’re determined to do all we can to support communities up and down the country working to breathe new life into their high streets.

“That’s why we’re changing planning restrictions so landlords can alter how empty shops are used for up to two years, making it easier for start-up businesses to set up in the high street, why we’ve backed a practical toolkit to help communities set up pop-up shops in vacant premises to help increase footfall, and why we’ve doubled small business rate relief with over half a million businesses expected to benefit.

“And going forward, we’ve brought together leading retailers, civic leaders and trade organisations in a Future High Streets Forum to help high streets adapt and change to the challenges they face.”

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Court awards Dunnes Stores 50% cut in rent

A Circuit Civil Court has cut the rent paid by Dunnes Stores on the retail floor space of its George’s Street, Dublin, head office by 35%. In cutting the rent the retail chain pays to Layden Properties George’s Street Ltd, Judge Jacqueline Linnane said the rental for basement storage, offices and ancillary space would also be cut by 50%.

Dunnes Stores operates 10,500sq ft of retail floor space in the 125-year-old listed building it also uses as a head office. Judge Linnane said: “The economy is in recession, there is a high rate of unemployment and there has been a fall in retail sales and a decline in consumer spending.”

The review reduces the pre-existing rate for the retail area of €50 per square foot by 35% to €32.50 per square foot. Ancillary office and storage areas, amounting to 54% of overall 23,000sq ft space, were cut by 50% from €15 to €7.50 and from €10 to €5 respectively.

Judge Linnane said that when reviewed previously by the court in 2006, the rent amounted to €693,000 a year. Experts for Dunnes told the court that the rent should be around €225,600 per year, while the landlord’s experts claimed that it should be €717,000 per annum.

Earlier this month, the High Court approved reinvestment plans for B&Q and Pamela Scott – saving 777 full and part-time jobs at 20 locations across Ireland – after the stores had been placed into examinership.

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PopUp Britain to open first shopping centre outlet

StartUp Britain has selected The Mall in Camberley as the first shopping centre in the UK to host a PopUp Britain outlet.

PopUp Camberley will open in June with a mixture of home-grown and visiting retail start-ups, giving them their first taste of the high street.

The pop-up shop will remain open for six weeks and every two weeks six new retailers will take space at the outlet.

Mark Bourgeois, managing director for The Mall owner Capital & Regional, said: “The retail landscape is changing, traditional lease lengths are getting shorter and the provision of pop-up stores are becoming increasingly popular as landlords work to ensure they are best using their space and meeting evolving customer demands.

“The aims of PopUp Britain chime with our own annual campaign ‘The Retail Factor’ which is designed to support budding retail entrepreneurs. We hope that by providing these businesses with a chance to occupy a unit in a centre with strong footfall it will allow them to grow their business by building their customer base and brand awareness.”

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Spar Group South Africa profit rises 12% as liquor sales gain

Spar Group Ltd. (SPP), a South African food and liquor retailer, said first-half profit climbed 12 percent as higher prices countered slower consumer spending.

Net income in the six months through March rose to R589.2 million ($64 million) from 523.8 million rand a year earlier, the Pinetown-based company said in statement today. Sales increased 9.5 percent to 24 billion rand. The company declared an interim dividend of R1.79 a share, 16 percent more than a year earlier.

Tops, Spar’s liquor unit, “continued to be the stand-out performer,” the company said. Spar added 25 Tops stores to bring the chain’s total to 561 outlets.

The central bank has kept the benchmark repurchase rate at 5 percent since a surprise cut in July, concerned that a weaker rand and rising gasoline prices will push inflation above its 3 percent to 6 percent target.

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Dubai’s Landmark Group plans 10 new hotels

Dubai retail giant Landmark Group will open more than ten new hotels under its mid-market Citymax brand over the next four to five years.

Landmark, owned by billionaire Mickey Jagtiani, currently operates a trio of three-star properties in Dubai and Sharjah.

According to the CEO of Landmark’s hospitality division, the new hotels will be across the UAE and in other GCC countries including Saudi Arabia, Bahrain and Qatar.

“We have a plan of expanding to about ten to 15 properties in the next four to five years,” Praveen Bhatnagar told Arabian Business.

“Currently we’re operating at 90 percent-plus occupancy. That’s given us the confidence of expanding and looking for more opportunities in the GCC region.”

He added that there were “a couple of negotiations that are happening” for new hotels in the UAE, with the first new property due to open within the six months. Within the UAE, Landmark plans to open properties in Fujairah, Ras Al Khaimah and Abu Dhabi and would seek to take advantage of package tourism to the emirates.

Bhatnagar said that some of the properties would be owned and operated by Landmark, while others would be run as joint ventures, depending on local regulations.

He added that the company was also seeking opportunities to convert existing properties to the Citymax brand. “Generally when it comes to freehold properties we’d like to develop and own the property ourselves.”

Landmark established Citymax in 2008 to serve the mid-market hospitality sector in Dubai, which Bhatnagar said is currently underserved. “Midmarket hotels usually make up 34 percent to 35 percent of the inventory, but in the GCC it is much lower – it’s in the range of about 11 percent to 12 percent,” he said.

As part of Dubai’s plan to broaden its appeal as a global tourism destination, officials in the emirate say they are seeking to attract 20m visitors per year by 2020.

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Four things South African retailers need to do better online

For a long time, people thought about online retailing in South Africa in terms of questions like “Is it a feasible model for the country?” But that kind of thinking is several years out of date. Online retailing is a real and growing trend, and the question now is, how do online retailers keep the growth coming?

There is plenty of evidence that online retailing is gaining traction in South Africa. A recent survey of 600 South African mobile phone users by marketing firm Jana found that two-thirds of South Africans reported shopping online at least some of the time (see chart). The MasterCard Worldwide Online Shopping Survey reported that the proportion of South Africans internet users shopping online grew to 58% in 2012, up from 53% in 2010 and 44% in 2009. A similar survey of internet users by the Digital Media and Marketing Association (DMMA) found that 52% of respondents reported shopping online, and that people who had spent at least 5 years using the internet were 50% more likely to do so, which is important because it means that the number of online shoppers will grow as more South African internet users spend longer online.

Although more than half of internet users shop online, online sales currently account for less than 1% of retail sales in South Africa, but they’re growing very rapidly – according to supermarket.co.za, online retail is growing at about 30% a year, compared to around 6% for traditional brick-and-mortar retailing. Indeed, Takealot.com predicts that online retailing in SA, currently worth about R2,5bn, could grow to account for 3-6% of total retail sales over the next few years, making the industry worth between R30bn and R60bn. The opportunity is thus significant.

Given that online retailing is a big opportunity, what can retailers do to boost their online sales? Looking over the research, the main issue is increasing internet penetration and growing the pool of shoppers, which isn’t something retailers can do – government needs to address this urgently if SA is going to grow economically. There are, however, four things online retailers can do to grow sales.

1. Make mobile work

Many, many South Africans access the internet over their mobile phones – according to the DMMA, the figure is 39% – and this group is set to grow as smartphone usage spreads. Designing a good mobile retail site is a challenge (Zando’s smartphone mobile site is pretty good), but getting this right can dramatically increase the potential pool of internet shoppers in South Africa, and boost sales.

2. Better delivery times

According to Jana, 38% of South Africans report that the biggest obstacle to online shopping is delivery times. This is in large part a reflection on the parlous state of South Africa’s road and postal infrastructure, and beyond the control of online retailers. However, they can use various tactics to improve the situation. In particular, they can use the data they collect about their clients to identify where most of their shoppers are, and work to locate warehouses closer to them (since most shoppers are probably in Joburg and Cape Town this should be easy enough – Amazon in the UK offers same day delivery to its London shoppers). Parcel tracking systems, smarter delivery vehicles (like the little Takealot three wheelers), and better inventory management could all help to speed up delivery, and encourage online shoppers.

3. Emphasise online security

South Africans are still anxious about the security of their online information. Happily, South Africa has a sophisticated banking system and there are plenty of online security tools that can be used to reassure shoppers that their data are safe. Perhaps the most important thing is education – sites should explain their security procedures, guarantee refunds if data are compromised, and use social media to improve their reputations by allowing shoppers to share their stories with friends and show that online shopping is safe.

4. Make the experience easy and intuitive

Globally, the secret to e-retail success has been making sites easy to navigate and intuitive to use. For clothing retailers, providing detail on sizing is crucial, while all sites should include customer reviews that allow people to share impressions of products and build confidence in the online experience. Recommendation systems (Amazon has patented its clever recommendation system which can certainly read me like a book) based on the large amounts of data online retailers can collect can help personalise the shopping experience, and give users a sense of relationship with the online retailer. Good integration with social networking sites helps here. Luckily for South African retailers, there are many successful sites around the world that they can look to for inspiration on best practice.

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Tea shop, Tea Monkey, opens concession in Mothercare store and plans more

New high street tea shop, Tea Monkey, is launching a concession in Mothercare’s Leeds store – it will be the brand’s third site.

Tea Monkey, set up in 2011 by Tracey Bovingdon, has tea shops in Bath and Milton Keynes and is talks to open more sites this year. According to Tea Monkey, its tie up with Mothercare will provide a child-friendly cafe, complementing the retailer’s customer experience by providing families with a haven to relax in and refuel while out shopping.

Relaxing environment
The Leeds Mothercare Tea Monkey cafe will open this weekend (18-19 May 2013). The event will feature a host of children’s entertainment with cupcakes being given out by Tea Monkey’s mascot and Tea Monkey infusers being given away to the first 100 customers through the door.

Bovingdon said the partnership was a natural one as both companies have similar values in terms of aiming to provide accessible and appealing facilities for families while providing their customers with the highest level of service and quality products. The signature Tea Monkey iPads, mounted on the wall in every store, will have games to keep the kids entertained as parents enjoy their well-deserved cuppa.

Tea Monkey offers a range of tea blends as well as herbal and wellness teas and it’s not just tea, the brand serves award winning coffee, hot chocolate, a freshly prepared and funky kids food range and gluten free options, accommodating for everyone’s needs including a wide selection of products for pregnant ladies to enjoy too.

Bovingdon said: “I am delighted to partner with Mothercare to provide an enhanced all round customer experience. As a mother of two, I understand what demands are put on parents and by uniting our brands under one roof, we can provide parents with the opportunity to take some time out with their children to refuel during a busy day shopping.

“We are a nation of tea drinkers and as somebody who loves tea I wanted to provide people with an ethical brand of cafes to quench the British thirst. I hope that this partnership with Mothercare will be the first of many in the retail sector, working with brands that match our values.”

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Rent cut for Dunnes Stores space in Dublin

Rent cut for Dunnes Stores space in Dublin

Dunnes Stores operates 10,500 sq ft of retail floor space in the 125-year-old listed building it also uses as a head office.

A Circuit Civil Court yesterday cut the rent paid by Dunnes Stores on the retail floor space of its George’s Street, Dublin, head office by 35 per cent.

In cutting the rent the retail chain pays to Layden Properties George’s Street Ltd, Judge Jacqueline Linnane said the rental for basement storage, offices and ancillary space would also be cut by 50 per cent.

Head office
Dunnes Stores operates 10,500sq ft of retail floor space in the 125-year-old listed building it also uses as a head office.

The judge said: “The economy is in recession, there is a high rate of unemployment and there has been a fall in retail sales and a decline in consumer spending.”

The review reduces the pre-existing rate for the retail area of €50 per square foot by 35 per cent to €32.50 per square foot.

Ancillary office and storage areas, amounting to 54 per cent of overall 23,000sq ft space, was cut by 50 per cent from €15 to €7.50 and from €10 to €5 respectively.

Hugh O’Neill SC, counsel for Dunnes Stores, and John O’Donnell SC, for the landlord, were granted leave to mention the matter in the next law term following consideration of the judgment.

Review
Judge Linnane said that when reviewed previously by the court in 2006 the rent amounted to €693,000 a year. Experts for Dunnes had told the court that the rent should total €225,600 per annum as against an estimated total of €717,000 by experts for the landlord.

The judge said an outside-of-premises market survey on behalf of the landlord suggested that, on an estimated turnover and profit potential, Dunnes could afford a rent of between €696,000 and €1,228,640 per annum.

Judge Linnane said the survey, over a period earlier this year, had been based on the number of people entering and leaving the premises, with frontage and access from both George’s Street and Exchequer Street, and whether they left carrying a plastic bag or not.

Since the last review date there had been a decline in rental values as shown by new lettings and rent reviews determined by the court.

No figure of the overall new rent was given in court.

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REDTAG opens new store at Serafi Mega Mall

JEDDAH – REDTAG, the region’s leading value fashion, lifestyle and home ware retailer opened its 20th store at Serafi Mega Mall in western region last week.
Commenting on the opening of the new REDTAG Showroom, Shehbaz Shaikh, Country Manager of REDTAG, said: “The new showroom, which is our 67th in the Kingdom, consolidates our position as a leading retailer of fashion, lifestyle and home-ware products to the mid-market segment.”
The showroom will offer a wide range of apparel and accessories for men, women, children and infants as well as home ware. Value-driven customers with active and demanding lifestyles will be delighted to know that REDTAG refreshes its collections frequently to ensure that each store always offers the latest international trends in fashion and home ware – at the most affordable prices.
“Customers visiting the new REDTAG showroom will find the same value elements that they have come to expect and appreciate in our brand,” said Shaikh.
Ernest J. Hosking, CEO of the REDTAG Group said, ‘By opening our 67th REDTAG store in the Kingdom, we have taken a significant step forward in our plan to position REDTAG as a fashion retailer who makes the shortlist of any price-sensitive shopper in KSA. REDTAG is already a force to be reckoned with in Bahrain, Kuwait, Qatar, UAE and Jordan. We want the brand to achieve the same stature in KSA during 2012.
Shoppers at Serafi Mega Mall REDTAG store can expect to pick up the latest fashion wear at affordable prices. They can also expect to see new collections in the store regularly and frequently.”
Being a value-focused retailer offering a range of fashions for the entire family for budget-conscious shoppers, the REDTAG brand offers the latest in fashion and accessories for men, women, children, Infants and newborns.

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McDonald’s to Hire 75,000 China Staff on Store, McCafe Expansion

McDonald’s Corp. (MCD), the world’s largest restaurant chain, said it plans to hire 75,000 new employees in China this year as the company accelerates store expansion in the world’s most populous country.

The new hiring represents an increase of as much as 83 percent of the Oak Brook, Illinois-based company’s workforce in the Asian nation. McDonald’s has more than 90,000 employees in China currently, the company said in e-mailed statement today.

Restaurant chains such as McDonald’s and Burger King Worldwide Inc. (BKW) are accelerating store openings in China as rising incomes and busy lifestyles boost demand for quick meals in the world’s second-largest economy. China’s chained fast-food industry will probably expand 14 percent to 115.1 billion yuan ($18.7 billion) this year from 2012, according to researcher Euromonitor International.

McDonald’s plans to increase the number of outlets on the mainland by 300 to 2,000 this year. The Big Mac seller opened 256 stores in the Asian nation in 2012.

The new positions announced today will consist mostly of store staff and 2,000 jobs will be for coffee baristas at its McCafe outlets, the company said. The number of McCafes will increase by 45 percent this year to 750, it said.

McDonald’s had a 15.6 percent share of China’s 86.9 billion yuan fast-food industry as of 2011, according to the most recent figures by London-based Euromonitor. It trails the 39 percent share for Yum! Brands Inc. (YUM), the operator of KFC and Pizza Hut restaurants, according to Euromonitor.

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John Lewis to open new department store in Oxford

John Lewis has announced plans to open a new flexible format department store in Oxford which will create 500 jobs.

The new 100,000 sq ft store in the city’s Westgate Centre will extend over three floors and will include a cafe and a dedicated customer collection entrance situated in the basement of the shopping centre’s car park.

With a target opening date of 2017, the store will sell a range of fashion, home and consumer electronic products with computer terminals in-store allowing shoppers to browse the wider John Lewis online offer and to order for home delivery or next day collection at the shop.

Andy Street, managing director, John Lewis, said: “Oxford has long been a sought after location for us and we’re delighted to be able to expand our reach to customers across the region for the first time, providing them with more convenient access to our inspiring products and great service. We’re looking forward to becoming part of the local community.”

Councillor Bob Price, leader of Oxford City Council, added: “We are delighted to welcome John Lewis to Oxford as the anchor tenant of the redeveloped Westgate Centre. This will confirm Oxford as one of the leading retail destinations in the UK and significantly contribute to the long-term vitality and viability of the city centre.”

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m&s in talks over first limerick store

Marks & Spencer is in talks to anchor a €50 million shopping centre in Limerick city. The Irish Times reports sources in the M&S camp said they had been offered extremely attractive terms to anchor the Parkway Valley shopping centre which was abandoned five years ago when Liam Carroll’s Zoe Group collapsed. M&S originally planned to open their first Limerick store at the Crescent but the move was blocked by both Limerick County Council and An Bord Pleanala. If it goes ahead, this would be the retailer’s first store in Limerick.

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Waitrose bags England cricket team sponsorship deal

Waitrose has signed a three-year deal with the England & Wales Cricket Board to become the new team sponsor of England Cricket from next year.

As part of the sponsorship deal, the Waitrose logo will feature on all England teams’ playing and training wear from the Investec Test Series against Sri Lanka in May 2014 and the prestigious home Series against India in 2014 and Australia in 2015. The sponsorship period will also cover the ICC World Cup in Australia and New Zealand in 2015, the ICC T20 World Cup and Women’s World Cup in India in 2016, and the 2016 tour of South Africa.

ECB chief executive David Collier said: “We are delighted to welcome Waitrose as the new sole sponsor of our England teams. The organisation begins their relationship with the sport with one of our marquee partnerships, and as a brand with a rich history synonymous with quality, they are a perfect fit for the ECB and our values.

“The partnership will allow us to engage further with a mass, family audience which will inevitably help us achieve our aim of inspiring the nation to play, attend and follow more cricket.”

Rupert Thomas, marketing director of Waitrose, added: “Millions of people play and watch cricket in the UK and at the heart of the game is the cricket tea which of course Waitrose is perfectly placed to provide. We look forward to developing this exciting relationship and bringing benefits to our customers, the Partners who work at Waitrose and the wider community.”

As part of the agreement, Waitrose will benefit from a range of rights and assets which will include advertising in international cricket grounds, team image rights, ticketing, hospitality and access to England players for commercial and marketing purposes. The agreement also includes a community and recreational project for the sport.

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UAE’s Namshi plans to expand into Lebanon

UAE e-commerce firm Namshi will expand into Lebanon within the next month after receiving $13m in fresh investment.
The web company, which specialises in fashion and lifestyle retail, announced the additional funding from growth equity firm Summit Partners on Monday. The investment follows prior capital injections of more than $20m from the likes of JP Morgan Chase, Blakeney Management and Investment AB Kinnevik.
The cash will be used to open a new logistics centre in Dubai, which will allow Namshi to run its own distribution network, rather than rely on third party delivery providers such as Aramex.
“We were about to launch Lebanon right before the warehouse move, but we decided to hold off until that was done, so we see ourselves launching in Lebanon in the next month or so,” co-founder and managing director Hosam Arab told Arabian Business via telephone.

Arab added that Namshi, which was founded in 2011 offers more than 550 brands, could then seek expansion into additional geographies in the Middle East and North Africa. “Then as we learn from that we will be open to additional markets as well,” he said.
Arab said that the company was in talks with investors for additional funding, but would not specify how much these deals were likely to be worth or when they would be concluded. “We’re currently speaking to a few, both regionally and globally. We’re open to additional funds. We will only taking on funds that are required,” he added.
E-commerce sales in the Middle East are thought to be worth as much as $11bn per year, according to Jordanian consultancy Arab Advisors Group.

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Tim Hortons plans 100 Saudi outlets by 2018

Tim Hortons, Canada’s largest restaurant chain, has signed a new deal to open 100 stores in Saudi Arabia over the next five years, on top of the 120 it is planning in the Gulf by 2016, as drooping demand in its home markets put increased emphasis on its growth overseas.

As part of its Q1 2013 results, the chain announced a franchise deal with Apparel FZCO to open as many as 100 restaurants in Saudi Arabia in the next five years.

That is on top of the deal the company signed with Apparel in 2011 to open up to 120 locations in several Arab states, including Qatar, Kuwait, the UAE, Oman and Bahrain.

“These are the type of deals they should be doing – these royalty deals, where they don’t take on any of the risk and get all the reward,” Barry Schwartz, a portfolio manager at Baskin Financial, which owns about 130,000 Tim Hortons shares, told Reuters. “This is the type of structure they should follow in the US.”

The firm currently has a total of 27 restaurants in the Middle East, with a total of 20 locations planned in 2013.

“Development in Saudi Arabia will be managed by Apparel and will focus on major urban markets, with opportunity for development beyond the initial 100 targeted locations. We continue to assess additional international markets for development in various regions of the world as part of our international strategy,” the firm said in its quarterly report.

Shares of Tim Hortons, which boasts that it sells eight of every 10 cups of coffee sold in Canada, fell more than 2.5 percent after the company posted its first decline in established store sales since its 2006 initial public offering.

The company, under pressure from hedge fund Highfields Capital to boost shareholder returns, said it is considering the Boston-based fund’s key demands. But any change will await its new CEO, Nestle veteran Marc Caira, a 59-year-old Canadian.

Highfields wants the chain to take on new debt to buy back shares and believes that Tim Hortons’ US returns do not justify further investment there. It also wants the company to enter into less capital-intensive franchise deals in the US or scrap its US expansion plans, according to documents seen by Reuters.

Interim CEO Paul House said Tims won’t pull back from the US market, but is studying a plan to work with well-funded franchisees who could operate multiple locations there.

The company said tough conditions in the first quarter led to heightened competition and drove sales down at established stores by 0.5 percent in the US and 0.3 percent in Canada.

Named after the hockey player who founded the brand in 1964, Tim Hortons is something of an institution in Canada with more than 4,071 outlets worldwide. In its home market the brand has a 40 percent market share of all quick service restaurants and serves up to two billion cups of coffee every year.

The UAE is home to an estimated 27,000 Canadian expatriates and the Gulf state is Canada’s largest trade partner in the Middle East and North Africa region.

The first UAE branch of Tim Hortons in Downtown Dubai was mobbed by Canadians before it even opened last month.

“I went there when it first opened and there were these queues coming out the door and they were all Canadians so it’s actually bringing all of these Canadians together. It even tastes the same, it tastes like home,” said Canadian expat Heather Chuter.

“I think it’s reminiscent of routine for us, it’s a part of a daily routine so you go in the morning, or for lunch, it’s something that joints people together,” said Canadian Nicole Rogers. “It really is something people go quite crazy for; there was even one in Kandahar at the military base,” she added.

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Nicole Kidman is the new face of Jimmy Choo

Hollywood actress Nicole Kidman will appear in Jimmy Choo’s autumn 2013 advertising campaign

The campaign marks the first season that Sandra Choi has been sole creative director of the luxury footwear and accessories brand.

“I’m such a great admirer and feel enormously honoured to be working with Nicole Kidman,” said Choi in a statement released today. “Nicole is one of the finest actresses in the world, who I knew could convey the empowered glamour of the brand. But she is also so nuanced and refined; she brings an attitude of defiance, strength, sensuality and elegance.

The ads, shot by Mikael Jansson, will appear in August issues and are said to have a “cinematic feel that hints at the power and seduction of the Jimmy Choo woman.”

“I’ve always loved fashion, and often use it as a way to get into character,” added Kidman. “There is a lot of complexity, mystery and femininity to the Jimmy Choo woman.” The 45-year-old Australian, who has previously appeared in campaigns for Chanel No.5 and Omega watches, has just finished filming the Grace Kelly biopic Grace Of Monaco , which will hit screens early next year. This week, she’ll begin her tenure as a member of the main competition grand jury at the 2013 Cannes Film Festival.

Though they usually stick to casting well-known models (such as Kylie’s beau Andreas Valencoso and Raquel Zimmerman), it’s not the first time Choo has employed star power – in 2006 the company enlisted legendary musician and Quincy Jones and model and actress Molly Sims.

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Ireland plunges down the rankings for rents to 40th

An unprecedented drop in rents has seen Ireland plunge to 40th in the rankings of the most expensive markets for retailers to lease space.

Dublin was the 15th most expensive place in the world to rent retail space at the height of the boom but is now the 40th, according to a new survey by CBRE.

“The report highlights the improvement in competitiveness since the peak of the market. Open market rents are down more than 50pc from 2007 which is a real positive for Ireland and will be instrumental in attracting new overseas retailers,” said Michael Harrington of CBRE in Dublin.

Falling property prices mean that even with lower rents the yield for new property investors is improving, according to the report.

Retail yields improved by around 0.25pc this year to about 5.75pc. Prime yields on shopping centres are currently in the order of 7.75pc, according to the data.

The main beneficiaries of falling rents are tenants signing new leases; however, a spate of high-profile examinerships of retailers including HMV, B&Q and Pamela Scott has seen retail chains secure big rent reductions as part of their court-approved rescues.

Outside of examinership, retailers are also winning rent reductions from the National Asset Management Agency (NAMA) in cases where the state agency is either their landlord or lender to a landlord in shopping centres and city centre premises.

Property sources say NAMA is more likely than other property players to cut rents, though it typically reduces rents on a temporary basis without giving up its legal right to benefit from boom-era leases in future.

CBRE said 12 retail investment transactions of more than €1m in value have been signed in the past six months as well as a number of smaller deals.

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J.C. Penney’s Latest Ad: “You’ve Come Back to Us…Thank You” (watch)

view the ad here

J.C. Penney is continuing its manners campaign with a new ad thanking customers as it works to recover from a $4.3 billion drop in revenue last year. The new spot, uploaded to YouTube last night, follows an ad released earlier this month apologizing to customers for a disastrous year of changes.
The department-store chain, which fired former Apple retail chief Ron Johnson as CEO last month and replaced him with predecessor Myron Ullman, last week said that sales in the first quarter slid 16%, following a 20% drop last year.
J.C. Penney in the new ad flatters and appreciates customers, saying:
“At J.C. Penney, we never stop being amazed by you. How you work so hard without looking like you do. How you make every dollar stretch so far and keep your family so close. So we brought back the things you like about J.C. Penney, gave you new things to explore and now, we’re happy to say, you’ve come back to us. We’re speechless, except for two little words. Thank you.”
More than 1,000 people have “liked” the spot on the retailer’s Facebook page.
J.C. Penney’s “thank you” might be slightly premature — there’s still a lot of work for the retailer to do to regain the 25% in sales that evaporated in 2012 under Johnson. Johnson alienated the retailer’s core customers by taking away sales and coupons, slashing print ads and reducing the selection of mainstay J.C. Penney brands such as St. John’s Bay.
The company will report full results for the quarter on May 16, when management may provide more insight as to whether this thank-you is merited.

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New £7m Skelton Asda store to open this summer

UK: New £7m Skelton Asda store to open this summer

Asda will open its controversial multi-million-pound store in East Cleveland this summer, the retail giant has confirmed.

The retailer is creating more than 150 new jobs at the £7m 25,000 square foot supermarket in Skelton.

The supermarket is to open at 10am on Monday, June 10.

Plans to build the store were approved by Redcar and Cleveland Council in September 2011.

A meeting at Belmont House, Guisborough, heard the authority had received 171 letters – as well as a petition signed by 514 people – against the proposed store.

There had also been 106 letters and a petition signed by 944 people in support.

Supermarket rival the Co-operative then announced that it was seeking a judicial review into the planning consent granted to the development.

The Co-op, which has a store in the village, submitted papers – but refused to say why it had launched the legal challenge.

But the bid was later thrown out at the High Court as the Co-op was told its action was “totally without merit”.

As described above, the plans for the new store split local residents – with hundreds opposed but others demonstrating at the site in favour of the scheme.

Goods at the new store will include fresh, frozen and local produce, an in-store bakery and a fresh pizza counter, as well as Asda’s range of own label brands.

Asda’s clothing brand, George, will have its own 4,000 square foot department in store.

The store will also have a cafe, an unmanned petrol station – like the Portrack Lane store – home shopping services and a 300-space car park for customers.

Asda’s new Click and Collect service will also be available.

Store manager Neil Cameron said: “We’re feeling very positive about the creation of new jobs for local people and are all excited to be linking up with our new colleagues.

“We think customers are going to be delighted with the new store.

“We hope they will be bowled over by the range and can expect the same great value and savings as they find in our larger stores.

“We are all champing at the bit to get the doors open and welcome our new customers through the door.

“Local residents can also look forward to the launch of our Skelton Community Life initiative, which we’ll be announcing in the very near future.”

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Google Is Planning Stores Just For Google Glass

Google is planning retail stores to sell its internet-connected glasses, Google Glass, we’ve heard second-hand from a source.
Our source tells us he knows someone that is working at Google to develop the Glass stores. This person apparently meets with Sergey Brin to plot out the stores.

When briefed on this story, Google said, “we don’t plan to comment on rumor or speculation.”

Previous reports said Google was developing its own stores, just like Apple and Microsoft have retail operations. Those earlier reports said Google was going to sell all sorts of stuff.

Our source indicated that Google was looking to create stores specifically for Glass. These Glass stores would put the Glass brand front and center. They would help customers get set up with Glass.

This is a second-hand source, so treat it with some skepticism. It could be someone over-talking their role in Google’s overall retail plans. Or, it could be someone blabbing about an early-stage idea that’s being kicked around in Google.

However, we think there’s a good chance it’s real. We trust the person we talked to. And the more you look at how Google is rolling out Glass, the more it makes sense.

Glass, if you haven’t see it, is one piece of glass over the right eye. It sends status updates from your phone to the Glass, which is projected out in front of you.

There is a thin metal frame that supports the device like glasses. Over the right ear is a touch pad that lets you control the device. It’s also voice controlled.

Glass has to be customized to fit on each person’s head. Otherwise, it’s difficult to clearly see the Glass display. It’s also hard for Glass to understand you if it’s not properly fitted to your skull, because it uses bone-induction.

Glass is a totally new technology, therefore there is a steep learning curve. We had Glass in the office, and people struggled to figure it out on their own when trying it on.

Google seems to realize people need Glass training.

Right now it’s sending out Glass to developers as part of its “Explorer” program. Developers pay $1,500 for Glass. They then test Glass, and build applications, helping Google figure out how Glass is really going to work.

When those developers pick up their Glass, Google employees walk the developers through the Glass experience. We have photos of the whole thing. It looks a lot like a retail operation.
Why go with just Glass stores? Why not do other Google hardware at the stores? Our speculation would be that it’s good to have focus.

Glass-only means hiring Glass specialists. It also means it doesn’t need huge retail spaces since it’s only selling one thing.

Assuming our source is correct, it appears that Google is going all-in on Glass. Not only is it manufacturing Glass, it’s also going do specialized retail, something Google has no previous experience with.

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Marks & Spencer opens automated warehouse for online sales

‘E-commerce has become the cuckoo in the business nest,’ said Laura Wade-Gery, director of multi-channel and e-commerce.
Marks & Spencer is promising huge improvements to the way it serves online shoppers after opening a fully automated 900,000 sq ft warehouse in Castle Donington on Wednesday that will be able to handle 1m orders a day.

The retailer, which sells just 15% of its clothing and homewares online, compared with about 35% at major rival Next, admitted that its current systems were ageing and inefficient.

Laura Wade-Gery, director of multi-channel and e-commerce, said: “E-commerce has become the cuckoo in the business nest.

“It has outgrown our business infrastructure. Our delivery proposition and availability is not as good as customers would like.”

Sales online have been increasing by 22%, but M&S is still behind competitors partly because its website is run with Amazon, which has restricted the UK store’s ability to sell overseas.

M&S has been building its own website, which will launch next year, and it hopes its new distribution centre in the Midlands will help ramp up sales.

After more than 20 years of under-investment, M&S is now aiming to launch a “market-leading proposition” in the way it delivers online purchases to shoppers, according to Wade-Gery. A first step will be an option, available within the next 12 months, to order goods late at night via its large stores for delivery the next day, before moving to same-day delivery.

The new warehouse will help make that happen by cutting by 70% the time it takes to move products from UK ports to stores and improving the availability of popular items both in stores and online.

The centre is currently handling just a few hundred orders a day, but by next year it will be dealing with 1m items daily, with 1,200 people working at the site during peak periods.

Marc Bolland, the chief executive, said: “We need to be agile and flexible as this world is changing.”

The company is in the middle of a £1bn programme to improve ageing IT and distribution systems that began life in 2009. The changes will also reduce the amount of stock the company needs to hold by a third and help it to cut costs by using just three distribution centres rather than more than 50 warehouses at present.

Analysts say M&S faces a risky period over the next few years as it builds the Castle Donington facility to full capacity, adds clothing to an existing centre in Bradford, and sets up a new distribution centre in the south-east.

The chain also has to urgently improveits clothing ranges as underlying sales of clothing and homewares have fallen for the last seven quarters.

Bolland, said he was feeling “confident” ahead of M&S’s launch of its key autumm/winter clothing ranges to the fashion press next week.

He denied that M&S was losing key staff, despite the departure of Janie Schaffer, head of lingerie and beauty, after just three months in the business, and the exit of two other senior womenswear executives in recent weeks. The company announced yesterday that it had swiftly hired a replacement for Shaffer – recruiting Jo Jenkins, currently product director of womenswear at Next.

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Selfridges to launch world’s first shop drive-thru

London department store Selfridges is to launch a new service allowing customers to order goods online then simply ‘drive-thru’ to collect them without even having to exit their cars

The words ‘drive-thru’ usually conjure up images of McDonalds, but swish London department store Selfridges is hoping to change that with the introduction of a new service dubbed the same thing. The shop, however, won’t be offering fast food, but fast fashion.

The service, which has been dubbed the first of its kind, will enable customers to order items via Selfridges.com, and then collect them without having to leave their cars
The Evening Standard reports that a drive-thru reception is currently under construction on Edwards Mews, which sits to the rear of the large department store on Oxford Street, where customers will wait while their order is collected and brought to their vehicle by a member of staff.

“There will be a dedicated area providing the level of service you would expect from Selfridges,” said Simon Forster, the company’s multi-channel director. “It will not just be the first drive-thru service, it will be the best.”

The new service is expected to be up and running by January 2014, and other innovations such as a text message service that ensures deliveries to home addresses are made only when someone is in to receive them are also set to be launched.

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Target opens pop-up dollhouse in Grand Central Station

New York — Target isn’t letting any grass grow under its feet when it comes to the suddenly hot category of home goods and home furnishings. The discounter has installed a giant, two-story dollhouse — some 21 ft. high and occupying some 1,500 sq. ft. of space, smack in the middle of Vanderbuilt Hall in New York City’s Grand Central Station.

The temporary installation is designed to promote Target’s new Threshold brand and is completely furnished and accessorized with furniture, decor, and housewares from the collection. It even includes an outdoor area, complete with patio tables, lounging tables and green turf.

The house carries about two dozen products shoppers can purchase by using their smartphones to scan a QR code. The retailer will later ship the product.

Workers built the temporary installation, which is made up of interlocking panels, in Queens and then moved the structure to Grand Central.

Target’s latest pop-up comes weeks before J.C. Penney Co. is set to make a splash of its own, with the opening of its multiple branded in-store home shops.

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