Monthly Archives: July 2013
Retail revenue increased 18% on underlying basis to GBP339m
Comparable store sales increased 13%
Growth driven by strong spring/summer collection
Burberry has recorded a jump in first quarter retail revenue, which it said was driven by the exceptional performance of its spring/summer collection.
The UK luxury brand said that over the three months to 30 June, retail revenue increased 18% on an underlying basis to reach GBP339m (US$504.7m). Comparable store sales increased 13% over the quarter.
The company said growth was helped by its investment in digital, but was broad-based by product and region, both offline and online.
“We are pleased with our first quarter retail performance,” said CEO Angela Ahrendts.
“Spring/summer 2013 was a standout season driven by innovative marketing, cohesive monthly fashion groups and exceptional execution from all corporate and regional teams.
“Looking forward, the macro outlook remains uncertain and we will continue to focus our investment on profitable high growth opportunities by channel, region and product categories.”
The Dubai Mall accounts for about half of all luxury goods purchases in the emirate, according to a study by Bain & Company.
In total, Dubai represents about 30 per cent of the regional market and 60 per cent of the UAE’s luxury goods sector, the report said.
Worldwide revenues from luxury goods sales are expected to grow up to 50 per cent faster than global GDP, with an increase of 4 to 5 per cent this year and 5 to 6 per cent annual average through 2015.
The Middle East is growing at a steady pace, with Dubai remaining the “centre of gravity” of the region and the only city that attracts foreign luxury consumers from countries such as Russia and India.
“The Middle East is now the 10th largest luxury goods market with sales exceeding €6 billion [Dh28.34bn],” said Cyrille Fabre, a partner with Bain & Company, who leads the retail and consumer products practice for the Middle East.
“Local consumption, intra-region tourism and the strong historic relevance of hard luxury and perfumes [and] cosmetics are key market drivers. Dubai is the heart of the regional market.”
Globally the luxury goods sector is being fuelled by a change in tourist consumption habits as they seek out new destinations such as Dubai and become more savvy about what they buy, said the report.
Every year, more “high earnings but not rich yet consumers”, who are also known as Henrys, become potential customers.
And a rise in the middle class in emerging countries has created a new generation for luxury brands to target.
Globally, absolute luxury items – high-end products with no logo – lead the way, while watch consumption has declined as retailers destock and Chinese consumers buy fewer timepieces. Leather goods and other accessories continue to be strong and spending on apparel has enjoyed some recovery.
Around the world, Japan will return to growth at 5 per cent and Europe remains a challenge for luxury retailers, with flat to 2 per cent growth.
The Americas will experience overall growth of 5 to 7 per cent, while China is expected to stabilise at 7 per cent.
South East Asiais expected to outpace them all to record 20 per cent growth.
LVMH Moet Hennessy Louis Vuitton SA (MC) agreed to pay 2 billion euros ($2.57 billion) for 80 percent of Italian cashmere clothier Loro Piana SpA, adding a high-quality textile producer to its burgeoning portfolio of luxury brands.
The transaction, which is subject to approval by competition authorities, values Quarona, Italy-based Loro Piana at 2.7 billion euros, LVMH said yesterday in a statement after the market closed. The family owners of the maker of $1,385 cashmere sweaters will retain a 20 percent stake in the business, Paris-based LVMH said.
Loro Piana competes in the absolute luxury segment, which Bain & Co. predicts will grow faster than the rest of the industry until at least 2014. Photographer: Chris Ratcliffe/Bloomberg
“This should be viewed as a positive, opportunistic deal for LVMH,” said Thomas Chauvet, a Citigroup analyst in London, who recommends buying the shares. “Loro Piana has a potential to grow sales and Ebit significantly in the niche, fast-growing luxury daywear segment as well as creating some industrial synergies with the rest of LVMH’s fashion and leather brands.”
Loro Piana, which would be LVMH’s biggest acquisition since the 2011 purchase of Bulgari SpA, brings LVMH expertise in textiles as well as helping it tap further into the market for the most expensive luxury goods, which account for the fastest-growing part of the industry. LVMH’s Louis Vuitton brand, its biggest, has faced a slowdown as consumers from Barcelona to Beijing seek more exclusive items.
LVMH rose 1.9 percent to 131.15 euros at 10:34 a.m. in Paris today, paring this year’s decline to 5.5 percent. The company, which also makes Celine handbags and owns Sephora makeup stores, has a market value of 66.6 billion euros.
Loro Piana competes in the absolute luxury segment, which Bain & Co. predicts will grow faster than the rest of the industry until at least 2014. The company gets two-thirds of its revenue from men’s and women’s clothing and other goods, which it distributes via 130 stores worldwide, and the rest from textiles such as vicuna, a rare wool from a South American mammal, according to LVMH.
LVMH said it sees “significant growth potential” in retail expansion and widening Loro Piana’s product offer, including in leather and accessories. The Loro Piana family has been trading wool and textiles since the beginning of the 19th century and established the business bearing their name in 1924.
The transaction will boost earnings the first year after it’s concluded, LVMH Chief Financial Officer Jean-Jacques Guiony said on a call yesterday. There are put and call options for three years on the Loro Piana family’s 20 percent stake, with the price based on a multiple of trailing earnings before interest, tax, depreciation and amortization, he said. That means LVMH can force the family to sell it or they can force LVMH to buy it during the period.
Loro Piana sales are expected to reach 700 million euros this year from 631 million euros in 2012, according to LVMH. Ebitda will be more than 20 percent of sales, LVMH said. Ebit was 97.9 million euros in 2012. The Loro Piana family will keep their functions in the company’s leadership structure.
Assuming Loro Piana’s 2013 revenue goal and an Ebit margin of about 17 percent, the transaction represents an acquisition multiple of 22.7 times Ebit and 3.9 times sales, according to Citigroup’s Chauvet. That compares to a sector trading average, excluding Hermes International (RMS) SCA, of 13.4 times Ebit and 2.9 times sales. Loro Piana rival Brunello Cucinelli SpA (BC), which first sold shares to the public last year, trades at 25.2 times Ebit, according to Chauvet.
LVMH said it expects to gain antitrust clearance for the purchase in the fourth quarter. The deal will be financed by available cash and new debt made up of short-term commercial paper and a medium-term bond, according to the company. Gearing is expected to be below 20 percent next year and the purchase will have limited impact on LVMH’s debt profile and ratios, it said.
Sergio and Pier Luigi Loro Piana approached LVMH Chief Executive Officer Bernard Arnault a month ago to discuss selling a stake, according to a spokesman for LVMH.
“LVMH has proved that it respects and nurtures family businesses and is most likely to respect the values and traditions of our maison,” the brothers said in the statement.
Their father, Franco Loro Piana, started exporting fine fabrics to international markets in the mid-1940s and since the 1970s the brothers have developed the brand and expanded into luxury retail, according to LVMH.
In addition to vicuna, which Loro Piana was awarded the exclusive rights to reintroduce to the market in 1994, the company is the biggest “western” producer of cashmere and the largest single purchaser of the extra-fine merino wools in Australia and New Zealand, according to LVMH. More recently, Loro Piana has introduced the lotus flower fiber, preserving an expertise that is only held by a few local artisans established on Inle Lake in Myanmar, LVMH said.
LVMH, which in 2010 disclosed a stake in Hermes, was fined 8 million euros this month by the French financial-markets regulator for breaching disclosure rules when it built its stake in the maker of Birkin bags.
“A malignant interpretation would be that Loro Piana is some kind of ersatz Hermes,” said Luca Solca, an analyst at Exane BNP Paribas in London
Marks & Spencer Group Plc (MKS), the U.K.’s largest clothing retailer, said general merchandise sales fell for the eighth consecutive quarter, increasing pressure on the company to have a successful autumn-winter collection.
U.K. sales at stores open at least a year in the clothing and home division fell 1.6 percent in the 13 weeks ended June 29, the London-based retailer said. That compares to the median estimate of 12 analysts compiled by Bloomberg for a 1 percent decline. Sales in the food division climbed 1.8 percent on the same basis, in line with the median analyst estimate.
Marks and Spencer is betting on a revived autumn-winter fashion range that comes into stores from July 25 with enhanced quality. The first-quarter performance was impacted by a “very difficult” April, a more stable May and highly promotional June which it had to respond to with discounts like half-price, Bolland said on a conference call with journalists. The company lost some market share as a late summer weighed on sales of casual tops and bottoms, he said.
“There is pressure on the forthcoming autumn-winter range to make progress for M&S,” said Clive Black, an analyst at Shore Capital. The first-quarter performance in general merchandise “remains a disappointing, albeit in-line, figure to our minds with M&S still losing share.”
The stock fell as much as 2.5 percent and traded 1.7 percent lower at 452.10 pence at 11:32 a.m. in London trading. The shares have climbed 18 percent this year.
M&S also struggled with what the British Retail Consortium has said was “topsy-turvy temperatures” in May, with a cold end of month hurting seasonal fashions. The ad campaign for the autumn line will start in September. The retailer has generated 53 percent of its annual revenue in the second half of the past three fiscal years, according to Bloomberg data.
Bolland has overseen two years of falling earnings as he ramped up spending on store formats, clothing quality and computer systems in an effort to boost sales. The company in May said it will begin to reduce investment after he spent the first three years of his tenure allocating money to try to bring the retailer in line with rivals in areas such as online sales.
“This is a step-by step approach,” Bolland said, without giving a timeline on when he expects the company will reach positive same-store sales in general merchandise. Consumer confidence held for the third consecutive month, he added.
Demand for food items around special occasions drove gains in the unit, Bolland told journalists. Still, Jamie Merriman, an analyst at Sanford C. Bernstein, said recent data points to a “lower outperformance of the market by M&S,” with Kantar data showing a contraction to 2.2 percent outperformance compared to the overall U.K. grocery market.
“Given the challenging trading conditions, we remain cautious about the outlook and continue to manage the business tightly,” the retailer said.
Smaller competitor Debenhams Plc (DEB) reported a similar impact from cooler temperatures last month with revenue weakening in its third quarter as another period of cold weather and a tough consumer climate reduced spending on spring and summer fashions.
G-Star has agreed to pay Carphone more than £2.5m to take on the lease to its store at 272-274 Oxford Street, which is next door to John Lewis.
The store will be G-Star’s first wholly-controlled site in the UK and is part of a major expansion push by the Dutch retailer. At present, it has only a small collection of franchise stores, including in Soho and Westfield Stratford City.
The price agreed for the store is the same as Sports Direct paid to acquire HMV’s flagship store on Oxford Street, despite the fact that the Carphone site is a fraction of the size.
Carphone was founded by Sir Charles Dunstone in 1989. It opened the 4,000 sq ft flagship Oxford Street store in 2002 and at the time claimed it was the largest mobile communications store in Europe.
There are now three years left on the lease and Carphone has decided to bank G-Star’s lucrative offer rather than face a sharp increase in rent payments when the lease is reviewed.
Carphone is already thought to be close to agreeing a deal for a new and smaller flagship store elsewhere on Oxford Street.
G-Star, which was founded in the same year as Carphone, specialises in denim clothing and has ambitious plans for growth. As well as having franchise stores in the UK, its clothing is sold by retailers such as Asos, House of Fraser and Next.
It is one of a collection of overseas fashion brands looking to expand in the UK. The US retailer J-Crew will open a store in Regent Street later this year while rival American Eagle is also eyeing sites in London.
Carphone is being advised by Briant Champion Long while G-Star is being advised by GVA. All parties declined to comment or could not be reached for comment.
Ambitious plans announced to rejuvenate Limerick retail landscape
GVA presents vision for the transformation of the city over 15 years
The Limerick 2030 plan is aimed at establishing Limerick as a leading centre for commericial investment
Limerick City and County Council has launched its plan to transform the city’s economy and reinvigorate its city centre over the next 15 years. GVA, an independent commercial property advisor, designed the integrated economic and spatial plan which is the first of its kind in Ireland. The plan follows moved by the government to adopt a more joined-up approach to support wider local government reforms.
The €250 million plan, entitled ‘Limerick 2030 – An economic and spatial plan for Limerick’ was developed by GVA in conjunction with Aecom and Thinking Place. The plan was unveiled by Minister for Environment, Community and Local Government Phil Hogan, Finance Minister Michael Noonan and Minister of State for Housing and Planning Jan O’Sullivan.
GVA says the plan has the potential to create 12,000 new jobs and sets out the objectives which will change the infrastructure of the city centre and deliver a new vision for Limerick as a leading centre for commercial investment.
The plan contains three main elements; an economic strategy, a spatial strategy and a marketing plan. Some of the initiatives included in the plan are; supporting innovation; capitalising on the city’s three higher education institutions, ICT and digital assets and technology-based economy; the creation of ‘The Limerick Cultural Centre’; the transformation of the three main streets; the restoration of the Georgian Quarter and profiling the city as alive with energy while highlighting its industrial and historical heritage.
Gerry Hughes, senior director leading the project at GVA, commented: “This is a hugely exciting time for Limerick. It is a time of positive change – a new local government structure that unites the city, recognition by government of the city’s potential, and now an integrated economic and spatial plan to drive and guide investment.”
Limerick 2030 will form part of the Limerick City and County Development plans and will be subject to public consultation. It’s part of a wider €750 million Limerick Project to deliver improved economic infrastructure over the next two decades.
A delegation from RGDATA recently met with the government’s interdepartmental group which is tasked with advancing the Action Plan for Jobs 2013 in the retail sector. The group urged the government to scrutinize the impact that changes in banking terms and conditions may have on creating and sustaining jobs. RGDATA represents over 4,000 local family owned shops and supermarkets throughout Ireland who provide 90,000 jobs.
“The Action Plan for Jobs will not be delivered unless the Government is prepared to crack the whip on the banks. Recent increases in bank lodgement fees and other changes aimed at making banks more efficient are having a direct impact on our members, their security and the security of their staff and families,” said Tara Buckley, director general, RGDATA.
The delegation from RGDATA, including Dundalk retailer Colin Fee and second generation retailer Hugh Doyle of Donnybrook Fair, Dublin, also outlined other issues impacting on competitiveness for independent retailers. Dundalk retailer Colin Fee urged the group to consider the impact the reintroduction of the JLC wage regime would have on job retention and creation. He also called for the enforcement of regulatory requirements to stop competitors operating outside the law.
Second generation independent retailer, Hugh Doyle of Donnybrook Fair, spoke about employment initiatives for retailers based in town centres. He also suggested a scheme to allow retailers to expand their businesses without immediate development contributions.
Macclesfield town centre is set for a £90m overhaul after plans for a new shopping and cinema complex were given the go ahead.
The controversial ‘Silk Street’ plans were approved at a dramatic meeting of the Cheshire town’s council’s strategic planning board on Wednesday night.
The landmark decision brings to an end a near decade-long debate over the redevelopment of the town centre.
Councillors spent more than eight hours discussing the proposals which include 19 new high street shops, a new town square and a 700-space multi-storey car park.
And they voted overwhelmingly to grant planning permission with nine councillors on the 14-man committee voting for them, despite three out of the four Macclesfield ward councillors on the committee voting against it.
Developers Wilson Bowden said they were ‘thrilled’ at the decision and indicated that work could start as early as 2014.
Will Robinson, retail director for the firm said: “This will benefit Macclesfield. It will benefit retailers in the town and the new retailers coming into the town.”
The chairman of the committee, Coun Harold Davenport, hailed it as a ‘historic day’ for the town and said he believed they had made the right decision.
But campaigners said their views had been ignored and say they fear the town could be left with a ‘white elephant development’.
Beverley Moore, from campaign group Wake Up Macc said: “We are disappointed but not surprised at the decision.”
The Wilson Bowden scheme was first mooted in 2005 and has since halved in size and undergone radical changes before the latest plans were lodged.
Earlier in the day, opponents had staged protests outside Macclesfield town hall where the meeting was held. More than a dozen members of Wake Up Macc gathered and held up placards.
The main room was packed with around 60 members of the public and an audio link was set up allow 100 more to listen to the debate in a second room.
The plan will see five hectares of land – currently made up of car parks – transformed with the creation of a new multiplex cinema, cafe and restaurants as well as a new town square in front of the town’s heritage centre with a children’s play area.
The committee was told by planning officers, who recommended them for approval, that the proposals complied with all planning policies.
Tesco is to grant space to gym operator Xercise4Less in its Stockton-on-Tees store, according to reports.
The gym operator will take over some 31,910 sq. ft of space on the mezzanine level of Tesco’s 120,000 sq. ft store in Stockton-on-Tees.
The deal was brokered by UK retail property advisors Morgan Williams, and comes in a bid to downsize retail space at some of Tesco’s larger stores.
The new in-store gym will be branded ‘Xercise4Less at Tesco’ and will offer membership rates starting from £9.99.
Commenting on the new use for in-store space, Tesco corporate affairs manager Doug Wilson said, “As part of our plans to make our Stockton store an even better retail destination for our customers, we are delighted to partner Xercise4Less in this exciting new venture.”
SOUTH African quick service restaurant groups are seeing an improvement in the UK market, where trading over the past few years has been difficult as rising labour costs and depressed consumer spending weighed on operations.
Famous Brands this week said it had opened its maiden Steers outlet in Clapham, London. The group already operates in the UK through Wimpy.
“The timing has never been better for Steers. We’ve been in the UK for a while and it’s been tough, but we’ve opened two Wimpys in the last couple of months and we want to open a few more this year. For us, the UK is looking a bit more optimistic than it has for a long time,” Kevin Hedderwick, the restaurant franchise group’s CE, said recently.
Spur Corporation’s international revenue for the six months ended December 31 rose 26.7% to R91.1m, reflecting an improving trading performance in the UK as well as Africa.
“Spur bucked the trend in the depressed UK restaurant economy and posted a pleasing growth in turnover,” the group said in March.
According to Mr Hedderwick, Famous Brands, whose portfolio also includes Debonairs and Mugg & Bean, said it had always considered exporting Steers to the UK. This had been “fuelled by the constant requests from many expatriates living in London craving a taste of home”.
Last year research company IBISWorld forecast that takeaway and fast-food industry growth would lift slowly in line with the broader UK economy.
“Early on, growth will be held back as austerity measures, high unemployment and ongoing concerns over the European debt situation continue to foster a climate of uncertainty. Some industry operators should still benefit as some consumers trade down to takeaway from more expensive dining options,” the company said in a report.
Vunani Securities analyst Anthony Clark said this week that even though Steers was well known in South Africa for being a fairly reasonably priced but quality product, in the UK it would be competing against other brands which were far better established.
“It’s a bit like Burger King coming into SA — it’s going to take them a great deal of time to actually establish a brand presence and brand recognition among consumers to cover the initial investment. I think the same will be true of Steers going into the UK. The cost of operating in the UK is also significantly higher,” he said.
The flame-grilled burger brand, which was launched in the 1960s, has 505 restaurants in South Africa and 43 additional locations across Africa. According to Famous Brands, the UK restaurant will focus on takeaway offerings, with the menu based on the South African one.
Spur opened in the UK with a sit-down format, Mr Clark said, and this format in the UK “was a complete and utter unmitigated disaster because of the cost structure of the business”. He thinks a fast-food franchise will work better.
“Granted, Famous Brands has deep pockets, the market is competitive and it might be a challenge for them. Not an insurmountable one though because Nandos did it, although they came into the market with a differentiated product: basted chicken, unlike KFC’s coated chicken. Famous Brands have done it (Steers) so well in South Africa, but in the UK a burger is a burger is a burger. I don’t think it’s going to be an automatic shoo-in for them,” Mr Clark said.
UK coffee giant Costa hopes to install between 800 and 900 of its new, high-tech vending machines in the next three years, a senior executive told Arabian Business.
The Marlow 200, which boasts a 27 inch touch screen and vends 250 variety of coffees, was unveiled at Dubai International Airport Terminal 3 this week, where the first two units in the world have been installed.
The machines feature technology from Microsoft and Intel and are designed to replicate the authentic cafe experience, going so far as to even emanate the sounds and smells of the real thing.
Scott Martin, CEO of Costa Express, said that he expects the Marlow 200 to be popular in settings such as airports, offices and petrol stations.
“We’ve always deliberately avoided the word vending, because it means it’s rubbish, it’s poor quality, it’s cheap,” he told Arabian Business. “To succeed in new markets you have to surprise consumers, and when we talk about this ‘five senses’ experience, it’s about surprising them.”
The Marlow 200, which has been designed by Italy’s Pininfara, also uses state-of-the-art acoustics technology from eMixpro, which has mixed records from pop groups including U2 and The Killers.
The vending machines are rented either on a pay-per-month or profit sharing basis.
Costa’s 400 or so franchised outlets in the UAE are operated by Emirates Leisure Retail. The company plans to keep on opening another one to two Costa cafes per month in key retail outlets across the Gulf state.
Tesco’s convenience store chain One Stop Stores has acquired 33 shops from convenience retailer Alfred Jones as part of its long-term growth strategy.
The purchase will bring One Stop’s total number of stores to 682 across England and Wales, and grow its employee base to almost 10,000. The acquired stores are based in the North West of England. The deal is conditional upon regulatory approval and is expected to complete later in the year.
One Stop chief executive Tony Reed said: “Having over 20 years’ experience in the convenience market puts us in a good position to help neighbourhoods thrive. With the purchase of these stores, we can introduce One Stop’s quality, great value, range and service to customers in new communities.
“We will also invest in store refurbishment to improve the shopping experience for our customers. “We’re delighted to welcome the store staff to our team. One Stop is a growing business that revolves around people. We believe firmly in investing in our staff, helping them to develop their careers with the company. We look forward to working with these new stores.”
Alfred Jones, which operates under the Spar fascia, has 49 convenience stores and 18 forecourt sites located predominantly in the North West.
Tesco acquired One Stop Stores in 2003. The convenience chain operates as a separate business from the supermarket from a head office in Walsall in the West Midlands.
Furniture retailer Dwell has been bought out of administration by founder Aamir Ahmad.
Dwell collapsed into administration last month, putting 300 jobs at risk.
Ahmad, who is returning to lead the company as chief executive, plans to save over 150 jobs and keep the business operating from at least five stores and the web.
From Saturday, Dwell will reopen its stores in London’s Tottenham Court Road, Westfield White City, Westfield Stratford, in addition to Barton Square in Manchester and Lakeside in Thurrock.
The retailer is also in talks with landlords of shops in other locations in the hope that additional stores and jobs can be saved.
Dwell’s online shop will also reopen Saturday and the company has said that it will be advising customers with outstanding orders via its social media platforms.
Ahmed founded the business with his family and friends in 2003 but left the business last year.
The company had 23 stores, primarily in London and the south east, as well as a concession in House of Fraser.
Ahmad said: “Our priority lies with the customers and suppliers who have been let down by the former management. We are working hard to try and resolve the issues, in particular outstanding customer orders. Although we are not legally obliged to, we are doing everything we can to find a solution for customers who have lost out. Our primary goal is to help customer and suppliers regain their trust in the dwell brand.”
City shirtmaker TM Lewin up for sale
The TM Lewin shirtmaker chain is to be put up for sale just a year after refinancing. Photograph: MS Bretherton/Alamy
TM Lewin, the shirtmaker chain, has been put up for sale by Coller Capital, a distressed investment specialist, just over a year after it underwent a painful refinancing. It has appointed corporate financiers from KMPG to find a buyer, with Geoff Quinn, the autodidact chief executive who led a troubled management buyout in 2006, thought likely to remain at the helm.
Quinn, 54, left school with one O-level, in pottery, and has been at TM Lewin since it was a single store on London’s Jermyn Street. The business now has about 90 shops in the UK as well as operations overseas. It has had a shop on London’s Jermyn Street since 1898, where, it claims, its founder, Thomas Mayes Lewin, introduced the first shirts buttoned all the way down the front – the “shirt coat”.
TM Lewin is the latest in a basket of troubled private equity buyouts put up for sale by Coller after it acquired a majority interest in the investments from taxpayer-backed Lloyds Banking Group last summer in a £480m deal. The portfolio of buyouts, mostly dating from 2006 and 2007, is a legacy of Peter Cummings’ controversial corporate banking division at Bank of Scotland, now part of Lloyds.
In April, Coller sold D&D, the upmarket restaurant group behind London eateries Coq D’Argent, Skylon and Bluebird, to another private equity house, LDC, in a £50m management buyout. Also reportedly up for sale is the struggling gym and tennis club group David Lloyd Leisure, backed by Coller in conjunction with property barons Ian and Richard Livingstone. Any disposal is expected to be accompanied by a refinancing.
TM Lewin was refinanced in April last year, with Quinn later claiming the revised arrangements had put its borrowings on “more sensible terms”, with repayment deadlines for the bulk of its £33.5m bank loans pushed out to between two and five years. The latest accounts show that for the year to March 2012, the firm posted top-line operating profits of £12m, down 18%, despite sales up 6% to £106m.
When the basket of private equity deals was sold by Lloyds into a joint venture with Coller Capital, founded by Jeremy Coller, the taxpayer-backed bank retained a 30% interest in the venture, known as Cavendish Square Partners. In January the Guardian reported that an advisory business which manages Cavendish Square on behalf of Coller and Lloyds had received £12m for its work for the year to March 2012. The advisory firm, called Caird Capital, was set up by Graeme Shankland, a former Bank of Scotland senior executive whose division at the bank had invested in the ill-fated buyouts. Shankland and his partners at Caird are expected to do well if disposals of David Lloyd Leisure and TM Lewin go well.
Bank of Scotland’s corporate division was heavily criticised by the Financial Services Authority in two reports last year. The regulator, which has since been renamed the Financial Conduct Authority, found a “culture of optimism” at the Bank in assessing credit risk had contributed to “a collective denial”.
Last September Shankland’s onetime boss at BoS, Peter Cummings, was given a lifetime ban from the banking industry by the Financial Services Authority and was fined £500,000.
Also among the assets in the Cavendish Square Partners joint venture, are Keepmoat, the regeneration and public housing firm.
Supermarket giant Asda is piloting a 360° laser checkout at its York superstore as it looks to improve the shopping experience for its customers.
To use the new Rapid Scan Till, customers place their shopping on a conveyor belt, watch it pass through the 360° laser scanner, before packing up their items in a bagging area.
Asda said the technology enables customers to scan their shopping up to 300% faster than doing it by hand with each item scanning in less than a second.
Asda retail director Mark Ibbotson said: “Mums tell us one of the main things they want us to do for them is save them time. We’re always looking at ways we can improve their shopping experience – and Rapid Scan is a technological triumph in that area.
“We’re the first to bring this amazing machine to our shoppers before anyone else, so we are really excited to hear what everyone thinks of it.”
Asda will be reviewing customer feedback on the new technology before deciding whether to roll it out to other stores across the country.
The department store Selfridges will use BrightSign players to help launch the world’s biggest denim store at its flagship location in London’s Oxford Street.
It has devoted four prime shop windows entirely to the digital signage, which features a number of different size Samsung screens.
‘The Best Department Store in the World’ will expand a new Denim Studio which will offer hundreds of exclusives from £11 to £11,000, featuring Paige’s’ diamond-encrusted skinnies and J Brand’s’ Little Black Jeans.
Its most prominent window,on the corner of Oxford Street and Orchard Street, has been converted into a photographic studio featuring eight screens featuring state of the art technology. Two further windows incorporate a mixture of portrait and landscape screens delivering a live feed from Instagram showing customers wearing their own favourite denims. A final window has a looped time-lapse video and there will be a ticker tape based on an RSS feed of Selfridges own content.
Since seeing sales in the denim category grow by more than 50% over the past four years,it launched an expansion plan worth in excess of £6m two years ago.
Pierre Gillet, VP Europe at BrightSign added, “Engagement is key to appeal to the 21st century consumer, and we are excited that a leading UK integrator such as Freehand has selected BrightSign players for this project for Selfridges, one of the world’s landmark department stores. They are renowned for their innovative window displays and we are proud that our solid state players have been chosen for use in their flagship Oxford Street store.”
Urban Outfitters Inc. will build its largest store in the world at 1333 Broadway in Manhattan to unveil a new “lifestyle center” concept.
The Philadelphia-based operator of the Urban Outfitters, Anthropologie, Free People, Terrain and BHLDN brands has signed a lease for 56,730 square feet on three levels on the northwest corner of 35th Street and Broadway, just north of Macy’s.
Anthony Malkin, president of Malkin Holdings, said Urban Outfitters will create “an innovative new lifestyle center concept with new features never before seen from the brand.” Malkin Holdings supervises 1333 Broadway. The retailer will take occupancy in September, according to Malkin.
The stretch along Broadway from Macy’s to Times Square offers little in the way of retailing and entertainment and at night becomes desolate, though its relatively new pedestrian walkway has helped enliven the area. Malkin said that the new Urban Outfitters concept “will be a huge catalyst for this retail and office neighborhood extending north of Herald Square. The area has seen transformational changes over the past few years, as Broadway with its pedestrian arcades links Herald Square to Times Square, and Urban Outfitters will be a magnet for shoppers.” Malkin Holdings includes a few other properties along Broadway between Herald Square and Times Square that it hopes to fill with new retail and restaurants.
Officials at Urban Outfitters could not be reached for comment Tuesday on the new concept or its name. “It’s to be determined. There are a lot of moving parts,” said a real estate source. Urban Outfitters’ largest stores are in the 25,000-square-foot range.
Malkin said 1333 Broadway contains 12 stories and 363,000 square feet of modern office space and has undergone a $71 million upgrade involving the lobby and restoring its ceiling and marble finishes, installing two new elevators and renovating three existing passenger elevators and freight elevators. The building is owned by 1333 Broadway Associates LLC, a partnership led by Peter L. Malkin and Anthony Malkin.
Nicole Farhi In Administration With 114 Jobs At Risk At The Fashion Chain
Upmarket fashion retailer Nicole Farhi has gone into administration, it has been announced.
Rising costs and the decline of Britain’s high street trade were blamed for its demise.
Restructuring specialists Zolfo Cooper have been appointed to advise the firm.
Peter Saville, a partner at Zolfo Cooper told the BBC: “Nicole Farhi is a very powerful retail brand.
“Unfortunately, as with many other fashion retailers, the decline in high street spend coupled with rising costs has led to increased financial pressures on the business.”
Nicole Farhi, five stores, 10 concessions, 120 staff.. and has run out of cash.. rumour that Nicole herself is in the running to buy it
— steve hawkes (@steve_hawkes) July 3, 2013
Nicole Farhi, founded by the designer in 1982 with her then-partner, French Connection boss Stephen Marks, was said to be facing “increased financial pressures”.
Zolfo Cooper said it was already in talks to sell the brand, which has a flagship store in Mayfair, central London, as well as five other standalone outlets and 10 concessions in the UK and Ireland, at Harvey Nichols, House of Fraser and Selfridges.
It employs 75 staff across its retail network as well as 44 working at its London headquarters. It also sells wholesale products to other retailers.
Customers with gift vouchers can continue to exchange them for goods in any of Nicole Farhi’s stores or concessions.
People wanting to make returns were advised to visit their local store where they would be able to exchange their goods but that cash refunds would not be provided.
Nicole Farhi’s owners have reportedly been trying to sell the business in recent weeks. It was acquired by private equity group Kelso Place Asset Management in January last year.
A spokesman for Kelso Place declined to comment.
Sales in the first 6 months increased 13 per cent
Dubai: As summer travel moves up a gear, Dubai Duty Free has announced a 13 per cent increase in sales with turnover reaching Dh3.2 billion ($874 million) for the first six months of the year.
The figures signal an excellent prospect for the retailer’s 30th year of business, with an anticipated turnover of $1.8 billion this year.
Perfumes and Gold retained the top three category positions with perfumes in particular showing strong growth with a sales increase of 18 per cent to Dh496 million ($136 million) year to date, while Gold retained its third position showing an increase of 13 per cent to Dh322 million ($88 million). Sales of Tobacco were up by 13 per cent to Dh269 million ($74 million) while Confectionery was up by 15 per cent to Dh258 million ($71 million) accounting for 8 per cent of total revenue.
Other notable increases in sales were seen in Cosmetics and Watches which rose by 17 per cent and 22 per cent respectively over the same period last year. Moreover, departure sales have increased by 13 per cent compared to the same period in 2012 and similarly sales in Arrivals and public shops have shown an increase of 15 per cent and 24 per cent respectively.
Commenting on the first half sales figures, Colm McLoughlin, Executive Vice Chairman of Dubai Duty Free, said: “We are pleased that 2013 is shaping up to be such a positive year for Dubai Duty Free as we have seen an increase in consumer spending across all categories, with average spend per departing passenger at $48.”
“We are looking forward to an equally busy period in the second half of the year. Plans are very much in place for the opening of retail operation at Al Maktoum International in October 2013 and we are busy working towards the planning of the new retail area with the opening of Concourse D,” he added.
Meanwhile, recruitment at Dubai Duty Free continued in the second quarter of 2013 bringing the level of employees to 5,700.
French fashion house Yves Saint Laurent has confirmed that Francesca Bellettini will replace Paul Deneve as CEO from September 1
A look from Hedi Slimane’s debut collection for Saint Laurent Photo: Reuters
Yves Saint Laurent has announced that Francesca Bellettini will take up the position of chief executive officer on September 1.
Bellettini will join the storied French fashion house from Bottega Veneta, which is also housed under the Kering (formerly PPR) umbrella.
She will replace Paul Deneve, who will leave the fashion industry to pursue an opportunity in the high-tech industry, report WWD .
Additionally, the brand’s creative director Hedi Slimane will see his current role boosted. Not only will he continue to supervise the brand’s image and creation, he will also oversee all of its strategic projects.
The Partnership last night revealed plans for a £1 million, 3,600 square foot shop that will open for business when the “Queen’s Terminal” opens its doors on June 4 next year.
It’s the Partnership’s smallest store, the first away from town and city centres and a huge step forward in the John Lewis’ international strategy.
Passengers will see the shop after passing through security in Terminal 2, opening the quintessentially British brand up to an even wider customer base.
Sean Allam, operations director, told the Daily Telegraph: “Outside the UK you only really know John Lewis if you travel to us. This is an opportunity to get the brand in front of a much larger customer base.”
He added: “Overseas stores? As always that’s tba. There are genuinely no firm plans. One day we recognise that we will outgrow the UK but we haven’t got there yet.”
John Lewis currently delivers online orders to 33 countries overseas, from the USA to Australia, and has a wholesale agreement to supply product to Shinsegae department stores in South Korea, but any plans to open physical stores overseas have been kept strictly under wraps.
As long as five years ago, John Lewis was linked with opening stores in India. At the time, chairman Charlie Mayfield was also said to be exploring opportunities in the Gulf.
So far the Partnership’s international expansion has been driven by Waitrose, which has franchise stores in places such as Bahrain and the Channel Islands.
The Heathrow John Lewis store will showcase the “best of home, fashion, gifting and seasonal ranges” and be located on the top floor of the the departure lounge. Some three-quarters of the range will be own-brand.
Heathrow’s current deals with World Duty Free and Dixons means the Partnership will be unable to sell either beauty or electricals.
Sean Allam said overseas tourists make up around a fifth of the business at John Lewis’ flagship Oxford Street store in London and at the very least the Heathrow outlet should drive online business.
Analysts last night John Lewis’ move reflected the increasing importance of airport retail as much as its own overseas ambitions.
Nick Bubb, independent retail specialist, said: “More people are shopping at airports these days, you’re getting the big luxury brands there and this move by John Lewis makes sense. As for overseas, if people like Debenhams can do it, then John Lewis certainly can.”
Verdict Research believes retail spend from overseas visitors will reach £9.7 billion this year, up 50.8 per cent on 2008. They expect it to soar by another 71 per cent by 2018.
Honor Westnedge, senior retail analyst at Verdict, said John Lewis had the potential to become as much of a destination as Selfridges and Harrods.
She said: “While it’s premium department store competitors are key shopping destinatioons for overses visitors to the UK, John Lewis is relatively unknown outside of its domestic market. This makes its decision to open in Heathrow Terminal 2 a sensible move to improve brand recognition and ultimately drive footfall into mainline stoers and increase web traffic.”
H&M’s long-awaited store at 497-501 Fulton Street in Brooklyn is almost here.
The Swedish retailer on Wednesday will unveil a 29,000-square-foot store on the heavily trafficked shopping thoroughfare that’s been in the throes of gentrification for several years. H&M will trumpet its arrival with a block party replete with music, games, food and prizes such as H&M gift cards and concert tickets. It will be hosted by Power 105.1 and DJ EmEz. On the day of the opening, H&M will offer the first 250 shoppers in line an H&M T-shirt and an Access to Fashion Pass worth $10 to $300.
Historically, the retailer has seen crowds line up — sometimes 300 deep — for the launch of its most popular designer collaborations and for certain store openings. The store will operate from 10 a.m. to 9 p.m., Monday through Saturday, and 11 a.m. to 8 p.m. on Sunday. The store on Wednesday will open at noon, when the block party will begin.
News about H&M opening a store on Fulton Street first emerged in 2008. At the time, the retailer anticipated opening the store in 2010, but construction delays due to a nearby subway station pushed the opening back to spring 2011. More delays followed.
H&M operates one existing store in the borough, a unit at Kings Plaza shopping center that opened in late 2001. “Since our first U.S. store opened on Fifth Avenue in 2000, we’ve focused on expanding to the best locations throughout the greater New York City area,” said Daniel Kulle, U.S. president of H&M. “We’re [pleased] to open our second store in one of the biggest boroughs in New York City and contribute to the revitalization of the downtown area and of Fulton Mall itself.”
“Opening in downtown Brooklyn is a major milestone for us,” added a spokeswoman. “We believe in Brooklyn very much. It’s an important part of our strategy for expansion in New York City.”
The retailer is stepping up its involvement in the community by sponsoring the H&M concert series at Williamsburg Park this summer.
Brooklyn has been a hot topic for retailers recently. TJ Maxx is bowing on Fulton Street in August, along with Swarovski. A|X Armani Exchange last year unveiled a 6,500-square-foot store at City Point, a 1.9 million-square-foot mixed-use development on Fulton Street and Flatbush Avenue. Century 21 also occupies part of the retail space. Earlier this month, J. Crew confirmed it has leased space for a two-level store at 151 Court Street in Brooklyn. Nordstrom is likely to open its first Rack unit on Fulton Street, the borough’s busiest shopping street, this year.
New York — Teen apparel retailer Aeropostale will enter Mexico through a licensing agreement with Distribuidora Liverpool, S.A. de C.V. (“Liverpool”).
The agreement includes the opening of branded Aeropostale shop-in-shops in Liverpool department stores across Mexico beginning this summer, in addition to rolling out freestanding stores. The first standalone is scheduled to open this summer, in Mexico City’s Sante Fe Mall.
“We are thrilled to bring the Aeropostale brand to Mexico through both branded shops and standalone stores,” said Thomas P. Johnson, CEO. “We consider Mexico a pivotal market as we look at our overall global expansion strategy. The Liverpool team possesses incredible insight and experience into the consumer as the operator of Mexico’s largest and preeminent department store.
WH Smith has begun testing a franchise model whereby independent newsagents would run smaller stores under the WH Smith Local brand, reports today’s Independent Retail News.
The model is being tested at three sites: in Clapham, south London, Headington, Oxford, and Purley, Surrey. The first trial store, in Clapham, opens this weekend, with the others due to follow next month (July).
The move by WH Smith comes just months after One Stop, the 640-strong convenience store chain run by Tesco, announced it too was developing a franchise concept that would allow independents to run their own business while benefiting from One Stop’s “low-cost operating and distribution model” (Independent Retail News, 5 April).
WH Smith told Independent Retail News it was working directly with independent newsagents to develop its franchise model. “We are always looking at potential new ways of extending our brand, of which this small trial is another example,” it said.
However, the multiple newsagent says it does not yet have any specific targets as to how many independent stores might eventually take on the new fascia. “It is very early days and very much a small trial at this stage,” the company said.
The National Federation of Retail Newsagents (NFRN) said it was aware of the trial and was keeping a close eye on developments.
Chief executive Paul Baxter said: “We think this is a very interesting initiative and we are pleased to see that the first stores to trial the scheme are all NFRN members. We will be monitoring progress very carefully.”
WH Smith operates 621 high street stores and 565 ‘travel’ units in places like railway stations across the UK. It also has concessions overseas.
Its most recent trading statement showed like-for-like sales down by 6% for the 14 weeks to 8 June in what it said was an “uncertain” economic environment.
Gap, J.Crew and Cath Kidson are to open new stores and expand in London’s West End in the second half of 2013
Retailers including Gap, J.Crew and Cath Kidson are to open new stores and expand in London’s West End in the second half of 2013
Gap is to expand its store at Land Securities’ Piccadilly Lights scheme at 1-17 Shaftsbury Avenue, while Boots and Barclays are taking reconfigured units. US upper-middle market retailer J.Crew is to open a flagship store in Regent Street in late 2013 and Brazilian brand Melissa Shoes is to open its first UK store with a 6,500 sq ft unit at 43 King Street, WC2.
Fashion and home retailer Cath Kidston will open a 7,000 sq ft flagship store at 180 Piccadilly in late 2013 while flagging UK entertainment retailer HMV, is reportedly seeking to return to its 20,000 sq ft former flagship store at 363 Oxford Street.
The findings were taken from the Central London retail report for summer 2013; conducted by leading real estate consultancy Knight Frank.
Despite the steady increase of growth over the last 2-3 years, London retail rates are expected to rise in the second half of 2013 with rents up by almost 5% over the year to May.
Ian Barbour, head of retail leasing at Knight Frank said: “A major feature of the current London market is the amount of refurbishment and redevelopment underway, in large part due to Crossrail, with the large London estates continuing to invest heavily in “place-making” and the creation of new retail, leisure and residential locations. It demonstrates the city’s ability to attract continuous investment and a seemingly endless stream of international retailers.”