Monthly Archives: August 2013
Woolworths to open 18 new Country Road, Trenery stores
Woolworths CEO Ian Moir. Picture: FINANCIAL MAIL
WOOLWORTHS will open 18 new Country Road and Trenery stores in South Africa over the next three years, the retailer said on Thursday.
The Cape Town-based group has ramped up its fashion credibility through supply-chain changes as entrants such as Zara, Cotton On and Topshop expand in South Africa.
It can now get to market within five to seven weeks on nearly 30% of its goods, where previously it took more than 11 months.
Woolworths has invested a significant amount of money in new systems and established a merchant academy to train its buyers, planners, technologists and designers. It also uses customer data to segment merchandise and plan the layout of its stores.
The company has big plans for the Witchery and Mimco brands in South Africa.
Country Road‚ Woolworths’ 88%-owned subsidiary, concluded the acquisition of 40-year-old fashion retailer Witchery Group from Gresham Private Equity for A$172m (R1.6bn) in October.
Woolworths will introduce the brands in March 2014 with the opening of 15 stores in South Africa, including standalone and store-in-store formats.
On Thursday, the retailer reported a 27.3% rise in full-year profit, as its core high-income customers continued to snap up goods.
For the year ended June 30, headline earnings per share were 340.4c, compared with 267.3c previously. Return on equity increased from 46.4% at June 24 2012 to 49.7% at June 30 this year.
Commenting on the results, Woolworths CEO Ian Moir said: “We are pleased with the strength of these results, especially in light of the tough economic conditions consumers are facing in South Africa and Australia.
“In South Africa, we have found that the upper-end consumer remains less constrained, and this, combined with our focus on quality and value, has enabled us to continue generating loyal customers in this segment.”
Woolworths clothing and general merchandise sales grew 12.3%. Gross profit margins in this division improved from 44.5% to 46.4% as the group benefited from improved sourcing and inventory management.
Food sales grew 15.4%, well ahead of market growth of 7.1%.
In the food space, Woolworths has taken on Pick n Pay and Checkers through its supermarket strategy of converting basket shoppers to trolley shoppers.
It is wooing its competitors’ grocery shoppers by extending its ranges, expanding stock-keeping units, offering more branded goods and introducing more bulk.
Woolworths plans to continue with store extensions and new developments that will shape bigger chains, allowing for an extended catalogue of products and more choice in food and nonfood categories.
Sales at Country Road in Australia increased by 68.6% in Australian dollar terms, or 90.8% in rand. Country Road now contributes 16% to group profit.
Woolworths Financial Services’ overall debtors’ book reflected year-on-year growth of 15.8%.
Mr Moir said that while the group expected economic conditions in South Africa and Australia to remain constrained, trading for the first eight weeks of the new financial year had been in line with expectations in both regions.
Shortly after 11am on the JSE, Woolworths shares were up 5.8% at R63.30.
JOINING a slew of foreign retailers hoping to tap into Africa’s mushrooming middle class, Swedish cheap-and-chic fashion seller H&M will open its first store in South Africa in 2015, the company said on Thursday.
Companies including Walmart‚ Inditex’s Zara and Arcadia Group’s Topshop have already made a play for Africa‚ through South Africa.
The continent‚ whose top 18 cities have an estimated combined spending power of $1.3-trillion (about R13-trillion)‚ presents a compelling investment case for retailers.
“We see great potential for further expansion in this region. We look forward to bringing fashion and quality at the best price to the customers in South Africa,” said H&M CEO Karl-Johan Persson.
H&M’s only other stores on the continent are in Egypt and Morocco.
It is believed that the group’s first store in South Africa will be located in Johannesburg at the R3.5bn Mall of Africa being developed by Atterbury.
The mall, which is being built in Midrand, is South Africa’s largest single-phase shopping mall development and is financed by Nedbank Corporate Property Finance.
H&M is also looking at opening an outlet in Cape Town.
“The first store that opens will be a full-concept flagship store,” the company said.
Zara opened its doors in South Africa in late 2011. UK high-street fashion retailer Topshop launched in 2012.
Australian retailer Cotton On Group is also expanding the presence of its Typo and Factorie brands in South Africa.
Local companies Foschini, Woolworths and Truworths are streamlining their sourcing and speed-to-market efficiencies in the face of the new market entrants.
Spar to open Angola store
Johannesburg – Spar Group Ltd., a South African food and liquor retailer, is working with an Angolan partner to open a store in the country’s capital, Luanda, in the next six months, Finance Director Mark Godfrey said.
“Spar will provide products and logistics support,” Godfrey said in an interview last week.
“We decided some time ago that in taking our business model to Africa we needed local expertise or we were wasting our time.” Godfrey declined to name the Angolan partner.
As food retail in South Africa is becoming more competitive, grocers are expanding in the rest of Africa.
Shoprite Holdings Ltd., South Africa’s largest retailer, opened its first store in Luanda in 2003.
It has 153 supermarkets outside South Africa in 16 African countries.
Massmart Holdings Ltd., the South African food and goods wholesaler owned by Wal-Mart Stores Inc., with 44 stores on the continent outside of South Africa, said August 22 that it plans to shift some focus from South Africa to elsewhere on its home continent because consumers are struggling to repay debt as unemployment rises and accelerating inflation curbs profit growth.
Carrefour SA, the French-based retailer in partnership with distributor CFAO SA, plans to open shops in eight African countries.
Spar’s shares slid 0.7 percent to 111.17 rand as of 9:10 a.m. in Johannesburg, extending their decline this year to 16 percent.
The FTSE/JSE Africa Food & Drug Retailers Index has fallen 20 percent this year.
“There has been a very clear change in Spar’s thinking about Africa in the past 18 months, looking to grow its presence,” said Kirsty Laschinger, retail analyst at SBG Securities Ltd. in Johannesburg.
“Angola is a tough geography with increasing competition, but it’s a big economy and if you are looking to grow in the west coast of Africa you have to be in the big countries.”
With gross domestic product of $114 billion, Angola is sub-Saharan Africa’s third-biggest economy after South Africa and Nigeria.
The economy is forecast by the country’s central bank to expand 6.5 percent this year.
South Africa will probably cut its economic growth forecast for this year to as low as 2 percent, Finance Minister Pravin Gordhan said July 19.
While Spar, which is based in Pinetown near the city of Durban, may supply most of the goods sold in the Angolan store, some products will be sourced locally, with the Angolan partner deciding on the speed that further stores will be opened, Godfrey said.
Spar already has stores in Swaziland, Namibia, Mozambique and Botswana.
It owns 35 percent of Spar Zimbabwe, which is expanding into Zambia
Outlet was planned to open late last year
UAE-based well-diversified group Al Futtaim will open its much-delayed Ikea store in Cairo, Egypt, in the next quarter, a senior company official said on Wednesday.
John Kersten, Managing Director of Ikea UAE, Qatar, Egypt and Oman, said the group will open an Ikea outlet in the troubled Egyptian capital of Cairo “by the end of this year despite problems in the country”. The Ikea outlet was planned to open late last year.
Kersten said the group is also planning another store in Muscat, Oman, but it is at a very initial stage.
Quoting a company spokesperson, Reuters said earlier this month that Al Futtaim has suspended work on its Cairo Festival City project due to ongoing unrest in Egypt. The project includes an Ikea outlet, a Carrefour hypermarket and over 300 retail stores as well as a 17-screen cinema complex.
Ikea UAE has also recalled faulty children’s beds to avoid any likely injury to users after two breakages were reported. The company said it had received seven reports of breakage of the metal rod connecting the guardrail to the bed frame.
A broken rod could expose sharp metal edges, presenting a laceration hazard. There have been no reports of any injuries caused by breakage of the metal rod.
Speaking at the launch of its 62nd annual catalogue, Kersten said the group posted 15 per cent sales growth in the first half of this year in the UAE, matching the last year’s growth rate.
Almost a million copies of the catalogue are available for the UAE, of which 790,000 will be distributed door to door. A digital version of the catalogue can be viewed online.
Seattle — Nordstrom is expanding its partnership with Britain’s fashion-forward women’s apparel brand, Topshop, as well its men’s unit, Topman. Beginning in September, Nordstrom will add 28 Topshop departments and eight Topman departments in stores across the country.
As part of the expansion, Nordstrom and Topshop will partner on a national campaign.
The expansion will bring the total number of Nordstrom stores with Topshop and Topman to 42 and 18 respectively. Locations will include Dallas, Houston, Minneapolis, San Diego, Washington, D.C., Southern and Northern California, South Florida, as well as new downtown stores in Chicago and Seattle. In addition, Nordstrom plans a completely refreshed design for Topshop and Topman departments in new and existing stores.
“We are very pleased with our Topshop/Topman partnership and excited to expand and grow together,” said Pete Nordstrom, executive VP and president of merchandising for Nordstrom. “Through this collaboration, we hoped to attract new customers to both our women’s and men’s apparel businesses and to learn to create newness and excitement in our stores and online. Through a lot of hard work and mutual effort, we have been able to measurably improve on these fronts.”
A combination Toys R Us and Babies R Us store in San Antonio. The company plans to open more than 100 stores in the United States, France, Germany, Spain, U.K. and China this year alone.
Wayne, N.J.-based retailer Toys “R” Us Inc. recently announced plans to open more than 100 stores — more than 900,000 square feet of retail space — in 2013.
In the U.S., that figure includes 10 new, converted or relocated side-by-side stores; and nine new outlet centers.
In 2006, the chain began converting its existing stores to what the company calls its “side-by-side” format — which calls for putting the Toys and Babies “R” Us concepts under one roof.
The retailer is making a major push into several other countries as well — including opening new stores in France, Germany, Spain and the U.K.
China will be at the forefront of Toys “R” Us’ expansion plans for 2013. The company plans to open 22 new stores in the country. By the end of the year, the company plans to operate 51 stores in 27 cities throughout China.
Jumeirah Park and Discovery Gardens will get community centres by early 2014
Dubai: Property developer Nakheel is planning to open a shopping centre in its Al Furjan residential development, the company said in a statement on Monday.
Nakheel has completed and handed over all 819 homes in Al Furjan, which is located close to Discovery Gardens and Ibn Battuta Mall.
“We are on track to hand over 3,000 units across several of our communities — including Al Furjan — in 2013,” a Nakheel spokesperson said in the statement.
The retail centre will cover an area of 30,000 square metres and offer shops, cafes and meeting areas. A launch date will be announced soon, according to the statement.
Nakheel is also expected to deliver two community centres in Jumeirah Park and Discovery Gardens by early 2014.
Property analysts said the developer is working on servicing residents of its new residential developments.
Craig Plumb, head of research for the Middle East and North Africa (Mena) at property consultancy Jones Lang LaSalle (JLL), said the retail centres “enhance the value of the residential developments [and act as] a support facility for people living there”, adding that areas such as Jumeirah Park and Al Furjan are not properly served with shops.
Plumb said Nakheel is looking at launching small retail projects to add to its bigger developments that include Ibn Battuta Mall and Dragon Mart. The added retail will make the residential developments attractive to tenants and “make them a better investment,” he said.
Mat Green, head of research at property consultancy CBRE for the UAE, echoed Plumb’s view. He said the small community centres act as “income generating assets” for property developers. “This is a trend we see with [new] masterplan communities,” Green added.
ONE of the country’s most prestigious department stores has warned that jobs may be put at risk after it was hit with a 47pc hike in its annual commercial rates bill.
Brown Thomas expects to pay €1.14m to Dublin City Council next year, a €400,000 increase on 2013, under a new system of calculating rates being undertaken by the Valuation Office. The higher bill is because this is the first time rental values have been calculated since 1988.
Commercial rates are a property-based tax levied by local authorities on occupiers of properties including shops, factories, pubs and offices.
The system for calculating the amount payable is based on a number of factors, but primarily the annual rental value of the property.
A spokesman for the Valuation Office said updated valuations had already been carried out in Fingal, South Dublin and Dun Laoghaire-Rathdown and that there were “winners and losers” in the process.
“The valuation is based on the annual rental valuation, meaning if it was put up for rent, what would it fetch? It’s based on rents in 2011, when the valuation order was signed,” he said.
“About 23,000 commercial ratepayers were issued with proposed valuation certificates. They have a statutory right to make representations (appeals) to us within 28 days.
“There’s a misconception that the local authorities are going to make a big killing on this but that’s not the case.
“There’s a provision in the Valuation Act which provides for a capping on the rates in the year following revaluation.
“The local authority cannot increase the total amount it collects in rates for a year after valuation.”
In South Dublin, he added, 49pc of businesses received lower bills and there was no change for 12pc. In Fingal, 65pc had a reduced rates liability while in Dun Laoghaire-Rathdown, the number was 54pc.
But Brown Thomas managing director Stephen Sealey told the Irish Independent that increases could result in job losses and that many local business would not be in a position to afford higher bills.
Take-up of retail space at Mall of Zimbabwe Millennium Park in the plush Borrowdale suburb of Harare has exceeded expectations reaching 75 percent, despite delays in the project construction.
Take-up of retail space at Mall of Zimbabwe Millennium Park in the plush Borrowdale suburb of Harare has exceeded expectations reaching 75 percent, despite delays in the project construction.
The project which is worth US$100 million (Approx R1 billion ZAR) is a partnership between the City of Harare and three investors Augur Investments, McCormick Property Development and West Group.
The historic development will see Zimbabwe boasting the largest commercial development in Africa that is set to become the biggest shopping centre (92 000 square metre GLA, once completed) in the country and the second of its kind in the region.
According to Augur Investments chairman Mr Ken Sharpe, construction would start as soon as they finalised talks with tenants some of whom were still coming up with their requirements.
He said the Environmental Management Agency had approved the project on condition that they maintained a central wetland core.
“Planning has taken most of the time,” said Mr Sharpe. “About 75 percent of the tenants are signed up. We hope to finalise talks in the coming weeks. Leases were signed earlier to give room for any major structural alterations to meet tenants’ specifications.”
Mr Sharpe said McCormick Property Development their partners in the project have more than 30 years’ experience in constructing shopping malls, having constructed at least 48 malls around Africa.
Among the tenants who have taken space at the envisaged mall are South African retail giants Shoprite, Edgars, Truworths, Game and Mr Price.
The Zimbabwe Mall, which Mr Sharpe said is going to be the second largest in Africa, would create thousands of jobs for Zimbabweans as well as contribute to the country’s Gross Domestic Product.
The construction of the project was stalled in its initial stages after EMA opposed the idea, but Mr Sharpe said the intervention of the City of Harare resulted in them getting the development permits.
Augur Investments got the land following a barter deal with the Government of Zimbabwe following the company’s financing, designing and construction of the Joshua Nkomo Express Highway leading from the city to the Harare International Airport.
World’s largest Holiday Inn to be built in Makkah
Dr. Hamad Al Ghammas and Pascal Gauvin celebrating the signing of the agreement between IHG and Makkah Real Estate Company.
InterContinental Hotels Group (IHG) and Makkah Real Estate Company have signed an agreement to build the world’s largest Holiday Inn, the 1,238 room Holiday Inn Makkah, due to open in Saudi Arabia in 2016.
The new hotel will be the first Holiday Inn in Makkah and will be located in the Al Aziziyah area near the city’s business centre. Its 1,238 rooms will be built in two towers that will also house an all day dining restaurant, two coffee shops, a ballroom, health club and pool.
IHG’s chief operating officer for India, Middle East and Africa Pascal Gauvin said: “Millions of people travel from all over the world to make the pilgrimage to Makkah. Our Holiday Inn brand is one of the world’s most well-known brands so visitors from all corners of the global can book with us knowing they will get a consistent experience and level of comfort. On arrival guests can focus on their pilgrimage – a once in a lifetime experience.”
According to IHG this agreement has been made in response to the recent boom in religious tourism in KSA, with more than three million pilgrims participating in the Hajj in 2012. This figure was up eight percent on the previous year, and more than half of all inbound tourists to Saudi Arabia travel to the religious cities of Makkah and Medinah throughout the year. IHG has claimed that the total number of tourists travelling to Saudi Arabia is expected to continue its growth trajectory to reach 15.8 million by 2014, up from 13 million in 2010.
Hani Hamad Al Ghammas, Chief Executive Officer, Makkah Real Estate Company commented: “We are pleased to be announcing this new agreement with IHG. The Holiday Inn brand is all about great value and providing both comfort and quality. We are confident that this formula, which has been hugely successful elsewhere in Saudi Arabia, will be the ideal offering for religious travellers bound for Makkah each year.
Located on the intersection of Masjid Ash Shaikh Baz and Al Masjid Al Haram Road, the new Holiday Inn will be 3.5km from the Haram, 3.5 kilometres from Mina, 1km from Jamarat, 6.4km from Mouzdalifah and 14.5km from Mount Arafat.
Twenty-six new HMV stores are to open around the country as specialist ‘shop-in-shop’ projects within Xtra-vision outlets in the coming months.
By Geoff Percival
British commercial restructuring firm Hilco, which bought both brands from receivership earlier this year, is to announce the locations for the new dual store designs next week.
At the same time, the company is planning to make announcements regarding its plans for the redemption of still-valid gift vouchers which controversially weren’t honoured during HMV’s receivership process, prior to the takeover.
Hilco announced its latest plans yesterday when it also confirmed the re-opening of four HMV Ireland stores over the coming weeks.
Following successful negotiations with landlords and suppliers, Hilco is to open stores at Dublin’s Henry St, Dundrum Shopping Centre and Limerick’s Crescent Shopping Centre early next month.
The Henry St branch will re-open on Sept 6, with the other three re-opening a week later.
Between them, the four stores will lead to 120 new jobs, recruitment for which has already been completed.
According to Hilco Capital Ireland chief executive Larry Howard: “The Xtra-vision, HMV and Hilco teams have been at full stretch in recent weeks finalising arrangements and store designs for the new concession arrangements. We look forward to HMV once again becoming the home of entertainment retail in Ireland.”
Hilco chief executive Paul McGowan said HMV would be launching its new digital product later in the year, with “more exciting developments” being announced in coming weeks.
When Hilco rescued Xtra-vision in June, Mr McGowan called the name “a very strong brand”, which would be “a good fit alongside HMV”.
After buying coffee from Colombia for almost half a century, Starbucks Corp. (SBUX) is finally opening a cafe there, part of its accelerating expansion in Latin America.
The world’s largest coffee-shop operator will open a cafe in Bogota in the first half of next year and then five more locations later in 2014, Chief Executive Officer Howard Schultz said in a telephone interview. The stores will be operated through a joint venture between Alsea SAB (ALSEA*) and Grupo Nutresa SA (NUTRESA), and will sell locally sourced and roasted espresso and coffee.
“This is long overdue,” Schultz said. “There is tremendous enthusiasm as we talk to people and walk the streets — most of these Colombian people we talked to have consumed Starbucks coffee somewhere else.”
It would be disappointing if Starbucks didn’t have 50 stores in Colombia in five years, Schultz said at a press event in Bogota today.
Starbucks is expanding to countries with growing middle classes to help boost sales. The Seattle-based company, which has about 8,000 cafes outside the U.S., opened its first locations in India in 2012 and Vietnam this year. In Colombia, Starbucks will compete with chains such as Juan Valdez Cafe, whose parent company Procafecol SA was created in 2002 by the Colombian Coffee Growers Federation.
Alsea, based in Mexico City, earlier this year acquired parts of Starbucks Argentina and Chile that it didn’t already own. Alsea, which operates Domino’s Pizza Inc. (DPZ) and Burger King Worldwide Inc. (BKW) stores in Latin America, will have a 70 percent stake in Starbucks operations in Colombia. Grupo Nutresa, based in Medellin, Colombia, is the nation’s largest publicly traded food company.
Starbucks also is forming a pact with the U.S. Agency for International Development to invest $3 million to secure coffee quality and supply in certain regions of Colombia. Starbucks and USAID are each investing $1.5 million during the next three years for research to help small-plot coffee farmers in Colombia. The money will go to Starbucks’s farmer support center in Manizales to pay for agronomists to analyze soil and advise growers on factors that affect yield, such as climate, pests and fertilizers.
Colombia has been Starbucks’s largest or second-largest coffee-bean supplier in its 42-year history, Schultz said during an earlier interview. In 2012, Starbucks bought about 545 million pounds of coffee from 29 countries, about 27 percent more than it bought the previous year, according to the company’s annual global responsibility report.
Recently, the company has invested in countries where it buys beans to help secure supply and consistent quality as it opens more locations. Earlier this year, Starbucks bought a farm in Costa Rica to experiment with coffee varieties and expand its grower-support program.
Starbucks opened its first farmer support center in 2004 in Costa Rica. Last year, it opened branches in Colombia and China for agronomists to help local coffee growers improve the quality and size of their harvests. The cafe operator has said it wants to sell all ethically sourced coffee by 2015.
USAID has initiated other projects to help areas in Colombia affected by internal conflict, drug trafficking and violence. Last year, the government agency began working on a program to increase access to renewable energy in the South American nation.
Internet research firm Hitwise has listed the top 50 UK e-retailers selling goods and services, in partnership with the the IMRG Index Classification.
The list ranks shops by popularity (number of visits) between May and August 2008.
There has been 1 new entrant, 17 risers, 23 fallers and 7 who have retained their position.
IMRG-Hitwise Hot Shops List, August 2008
1. Amazon UK
7. Thomson Holidays
8. Marks & Spencer
9. Tesco Direct
14. John Lewis
15. PC World
17. Dell EMEA
19. Apple Computer
21. Thomas Cook
23. Comet UK
24. Woolworths UK
27. Odeon Cinemas
28. Ticketmaster UK
29. First Choice
30. British Airways
33. Screwfix Direct
34. O2 Shop
37. Vue Entertainment
40. Travelodge UK
42. The Orange Shop
43. River Island
46. Carphone Warehse
50. Symantec Store
The IMRG-Hitwise Hot Shops List of the top 50 UK e-retailers is the key indicator of online merchant performance. The List is published quarterly and tracks popularity, as indicated by visits, of those selling goods and services within the IMRG Index Classification. This List is based on July 2008 data.
This tenth quarterly Hot Shops List is notable for rises in the Electrical and Fashion sectors, while Computer companies fell as consumers, with hard times looming, adjusted their priorities. The only new entrant was Staples, which roared in halfway up the List at 25.
Amazon.co.uk (1) as ever, and Argos (2) and Play (3) as usual, led the field while Tesco (4) held on to its habitual fourth position.
The first fashion brand into the top five, Next (5) was definitely hot, reaching its highest ever ranking, up from 9th place in May and 11th place a year ago.
ASOS’s (16) stellar performance continued, climbing another two positions since May and a massive thirty places from the 46th slot it occupied a year ago. ASOS ranked 50th in the first ever Hot Shops List, published in May 2006.
Electrical e-retailers also had a strong month. PC World (15) reached its all-time high, having risen from 26th place in May, 23rd a year ago and the 36th slot the year before that.
Woolworths stormed up the List to 24, having jumped 14 places since May, and seventeen places from its 41st ranking a year ago.
John Lewis (14) continued its inexorable climb up the Hot Shops List to its best position to date, up another place from last quarter and improving on the 18th position it occupied last August.
Ebuyer (22) was on the rise again; it was up two places since last time, having first entered the List in May 2007.
The Entertainment sector benefitted from July’s poor weather, with Odeon Cinemas (27) rising from 45th in May, and LOVEFiLM (35) popping in for the second time, having debuted on the List at 37 in February this year.
Not so hot were the computer companies: Dell (17), Apple (19) and HP (48) fell four, seventeen and nine places respectively from their rankings in May, and three, eleven and five places on the year.
IMRG’s CEO, James Roper, comments: “With the market hardening under the daily hammer blows of worsening economic news, one would expect more volatility within the List. It is a measure of the competence that sets these brands out as market leaders that they consistently continue to attract high customer traffic volumes, even under harsh trading conditions.
“The e-retail sector continues to enjoy double-digit growth, which is good news for the twenty seven high street brands that now appear on the Hot Shops List, as their traditional channel’s sales falter. If a recession does come it will bias change in favour of e-commerce practitioners such as these.”
Hitwise’s Director of Research, Robin Goad, comments: “We always see travel companies improve their ranking during this quarter, and this year is no different. However, despite the eleven travel brands on the list having moved up compared with last quarter, they are all down when compared with the same quarter last year.
The Retail Ireland survey has found rates in Dublin could soar by up to 80% next year
Retailers in Dublin could be facing a massive hike in their rates bill, according to IBEC group Retail Ireland. The group has released the results of its recent survey which shows that rates in the capital could jump by between 30% and 80% to fund the upkeep of the premises.
The increases are on foot of the rates revaluation process, which culminated in bills being sent to many retail businesses in recent weeks and months. Rates for retailers are based on a multiple of the total market value of the premises. Some other sectors have their rates calculated on the basis of their turnover. There are fears the increases could force struggling retailers out of business, leaving many people out of a job.
“The news that the cost of commercial rates for many retailers in the city is set to soar is unacceptable,” said Stephen Lynam, director of Retail Ireland. “Retail sales have fallen by 25% in recent years, and tens of thousands of jobs have been lost as a result. Retailers have had to keep prices low to attract price-sensitive customers, despite the fact that rents remain too high and the cost of doing business has increased. These increase are simply not sustainable given the state of the retail market.”
Lynam continued: “This money should be invested in store upgrades and staff numbers, and not in higher local authority charges. We know that Dublin City Council needs funding in order to do the work it does, and we accept that. But retailers should not be forced to bear an unsustainable burden, especially at this very difficult time in the domestic economy.”
Regional and international retail executives will come together to discuss new approaches to compete for shoppers at a summit to be held in Dubai from September 8.
The two-day InRetail Summit will focus on the challenges of standing out in a crowded market and how to create new customer experience and valuable products that match shoppers’ needs.
“Retailers have to rethink the way they interact with and attract shoppers to their outlets. The trend is now for retailers to adopt an omnichannel approach,” said Ayaz Maqbool, managing director of Tejuri.com, a UAE-based online shopping mall.
Omnichannel is not a new concept. International retailers have been shifting their focus on reaching and attracting shoppers in multiple ways with the most popular being digitally. With the rise in the use of smart phones and high internet penetration rates in the Middle East, this trend is set to translate into consumers accessing real-time information to research and purchase goods without being physically present.
“Retailers who adopt omnichannel strategies have the advantage of connecting with consumers anytime, anywhere and any place giving shoppers the option to purchase in the store, online or even through their mobile phone,” said Maqbool.
Oke Eleazu, director of Customer Service at Sainsbury’s, UK, said: “Retailers will have to refocus their efforts in creating new customer experiences coupled with providing excellent customer service face to face and online.”
“This event provides the industry with the perfect opportunity to learn what technologies and strategies retailers are using to compete for customers in this ever increasing market,” said Mona Ataya, CEO of Mumzworld.com.
JOHANNESBURG–Wal-Mart Stores Inc.’s ( WMT ) South African retailer Massmart Holdings Ltd. (MSM.JO) plans to open 90 new stores across sub-Saharan Africa over the next three years, as the group targets growing markets like Nigeria and Angola.
The group said the focus is on fresh food growth. It will open a stand-alone food store in West Africa as a trial by the end of the year, with hopes of expanding that to East Africa. The group is also adding more brands from Wal-Mart stores in other parts of the world to its African operations, including a clothing line from the U.K. in November.
Wal-Mart last year closed a deal worth roughly $2.4 billion to buy 51% of Massmart, a move many saw as a springboard for Wal-Mart to grow across the continent.
Over the coming three to five years, Massmart will be opening more stores in the rest of Africa, its Chief Executive Grant Pattison said Thursday.
Wal-Mart and Massmart aren’t the only groups setting their sights on Africa. Companies from the U.S., China and India have been pouring billions of dollars into the continent to tap new consumers and infrastructure deals.
Driving the interest are forecasts for strong growth. By 2018, five of the world’s fastest-growing economies will be in sub-Saharan Africa, according to the International Monetary Fund.
Last month, General Electric Co. (GE) signed an agreement to build a 400-megawatt gas-fired power plant in Tanzania. Ford Motor Co. (F) said it’s formulating a new strategy to target consumers in the rest of the continent with tailor made products. And this week Kenya said it had signed agreements worth $5 billion with China for projects including railway and energy development.
Since Wal-Mart closed the deal last year, expansion has been slow though, as it faces debt-laden consumers in its biggest African market of South Africa. Acquiring property rights for new stores in other countries has also been hard, Mr. Pattison said.
He warned that the consumer in South Africa will remain under pressure in the coming months, but stressed long term the group will become a bigger player in the continent.
Mr. Pattison also confirmed that the group has been having conversations with retailers in Kenya about a possible joint venture, but declined to provide further details. One of the retailers is Kenyan supermarket chain Naivas.
“It’s the food retail space where we would look for an acquisition,” Mr. Pattison said.
Apple has poached away a senior executive from clothing company Levi Strauss to serve as director of sales in the U.S., Mark Gurman 9to5Mac first reported.
The exec’s name is Enrique Atienza and he’ll be in charge of retail operations on the west coast. However, Apple still doesn’t have a senior vice president in charge of all retail. That position has been left open since Apple let go John Browett last fall after less than a year on the job.
Gurman reports that Apple is still on the hunt for a new retail boss, and is looking to hire someone from outside the U.S.
FOSCHINI, the JSE’s worst-performing clothing retailer this year, says it plans to open 21 new stores on the rest of the continent by March as consumers in Africa’s largest economy struggle to repay debt.
The company, which owns the Fabiani and Charles & Keith fashion brands in South Africa, joins retailers such as Carrefour, Shoprite, Walmart’s Massmart and Truworths International in expanding in Africa. The continent has a rising middle class that may number 300-million people and an economy set to grow at three times the pace of the US next year. South Africa’s Reserve Bank has forecast an expansion of 2% for this year, the slowest since the 2009 recession.
Foschini planned to open five or six new stores in Zambia and four in Ghana, chief financial officer Ronnie Stein said this week. The retailer would open 42 new stores in the rest of the continent in fiscal 2015 and 38 in fiscal 2016.
Further, Foschini planned to add to its two recently opened stores in Nigeria as more shopping centres were built in the nation of about 160-million people. “That will take us to 205 stores by the end of 2016 when our turnover from the rest of Africa will be R1bn,” Mr Stein said.
“We always start with two stores in a country. Once we’re happy with the environment, the logistics, the legal side, the tax side, the staffing side, then we roll out.”
South African retail sales rose at the slowest pace in nine months in June as rising joblessness weighed on spending. South Africans with impaired credit records rose by 189,000 to 9.53-million in the first quarter, the National Credit Regulator said in June.
About 40% of Foschini’s sales in fiscal 2013 were done with cash, while the balance was done on credit using the retailer’s store cards.
Retailers “all recognise the need to expand outside South Africa, because South Africa is becoming competitive”, said Roger Tejwani, a retail analyst at NOAH Capital Markets who has a hold recommendation on Foschini. “It’s becoming overtraded.”
The stock has lost 29% this year, compared with an 18% decline for the 11-member FTSE/JSE Africa general retailers index.
Foschini’s sales would probably grow 10% for fiscal 2014, Mr Stein said. That compares with a median estimate of R14.28bn (10.7%) of eight analysts in a Bloomberg survey.
Mr Stein said trading conditions in the first three months to end-June were “tough” whereas last month was “pretty good”. Fluctuations in the rand might affect price increases on Foschini’s merchandise.
Foschini’s internal product inflation for the fiscal year to end-March was 5%. That compares with a 6.3% increase in consumer price inflation in July, according to Statistics South Africa.
“If the rand remains at the 10-ish level, the inflation for summer would likely be in the region of 7%, which is less than the devaluation in the rand,” Mr Stein said.
Abercrombie Falls After Profit Trails Analysts’ Estimates
Abercrombie & Fitch Co. (ANF) plunged the most in more than 21 months after forecasting profit for the current quarter that was less than analysts estimated amid declining traffic at its stores.
The shares slid 17 percent to $38.71 at 11:13 a.m. in New York and earlier fell as much as 21 percent for the biggest intraday drop since Nov. 3, 2011. Third-quarter profit will be as much as 45 cents a share, the company said today in a statement, while declining to forecast earnings beyond then. Analysts estimated $1.07, on average.
Profit excluding some items was 16 cents a share in the quarter ended Aug. 3, the New Albany, Ohio-based company said today in a statement. Photographer: Scott Eells/Bloomberg
Chief Executive Officer Mike Jeffries has been struggling to reconnect with the clothing chain’s teenage customers who have become less enamored of Abercrombie’s fashions, half-naked models and cacophonous stores. On top of that, consumers concerned about the unsteady economy have been limiting purchases of non-essential items.
“People are completely shocked at the fact that they’re not able to give visibility, that the depths of traffic declines in July are what they assume will continue in the third quarter,” Stephanie Wissink, a Minneapolis-based analyst at Piper Jaffray Cos., said in an interview today. She has the equivalent of a buy rating on the shares.
Sales at stores open at least a year and through its websites fell 10 percent in the quarter ended Aug. 3, including an 11 percent U.S. decline. Comparable-store sales at New Albany, Ohio-based Abercrombie & Fitch slid 6 percent and 13 percent for Hollister. Revenue fell 0.6 percent to $945.7 million, trailing analysts’ projection of about $1 billion, while net income slid 33 percent to $11.4 million, or 14 cents a share.
Profit excluding some items was 16 cents a share. The average of 29 analysts’ estimates compiled by Bloomberg was 29 cents.
“The second quarter was more difficult than expected due to weaker traffic and continued softness in the female business, consistent with what others have reported,” Jeffries said in the statement. “In that context we are planning sales, inventory and expenses conservatively for the remainder of the year.”
Retailers from Macy’s Inc. (M) to Wal-Mart Stores Inc. (WMT) have reported results that trailed expectations for their most recent quarters. Macy’s last week posted its first sales drop since 2010 and its profit trailed analysts’ estimates for the first time since 2007. Wal-Mart said last week that earnings for the rest of the year would be less than it previously expected as consumers were hesitant to make discretionary purchases.
After taking the helm in 1992, Jeffries turned a chain that originally made safari and camping gear for the likes of Theodore Roosevelt and Ernest Hemingway into a teen emporium where sex met Ivy League. He used Abercrombie’s reputation for quality to charge more for youthful styles, recruiting all-American teens and college-aged kids to model and work as salesmen.
Risqué quarterly catalogs enraged religious groups. In 1999, the boy band LFO paid homage with its top-10 song “Summer Girls,” which included the lyrics: “I like girls that wear Abercrombie & Fitch / I’d take her if I had one wish.”
The Jeffries formula worked from 1995 into 2008, when the company boosted sales more than 20-fold and net income more than 56-fold. Then the world changed. The downturn made it hard for Abercrombie, long an aspirational brand, to keep selling $70 jeans when similar styles could be purchased elsewhere for $40, and Abercrombie’s customers began moving on.
“We are not satisfied by our results and are working hard to improve our trends for the third quarter and beyond,” Jeffries said on the company’s earnings conference call today.
Superdry stores to open in Turkey
SuperGroup, the maker of Superdry and Cult clothing, has agreed a five-year franchise agreement with luxury fashion retailer Demsa Group.
Demsa will open three Superdry stores by early next year in Turkey, including two in Istanbul, and will launch at least eight during the five-year tie-up.
Superdry clothing will also be sold through Demsa’s Harvey Nichols department stores and its luxury brand stores Brand Room.
The tie-up with Demsa follows a similar deal last month with FJBenjamin, a retail distributor that has helped Gap and Banana Republic, to open stores in Malaysia and Singapore.
Julian Dunkerton, the founder and chief executive of SuperGroup, said: “Turkey is a territory that has held our interest for some time and our partnership with Demsa Group offers the perfect opportunity to enter this diverse and growing market. Demsa Group has an excellent understanding of our brand ethos and we look forward to growing the partnership.”
A number of UK retailers are already operating in Turkey, but have had mixed success. Tesco and Dixons are both reviewing their Turkish stores on the back of disappointing sales, although Marks & Spencer says its franchise stores have performed robustly.
Mr Dunkerton started his fashion business in 1985 with the launch of Cult, however, the creation of the Superdry clothing label in 2003 with James Holder, the designer behind the Bench brand, fuelled its growth.
The Superdry brand has attracted a series of celebrity endorsements, including from David Beckham.
SuperGroup floated in 2010 at £5 per share and soared to almost £18 within a year. However, its shares then slumped after three profit warnings, provoked by troubles with a warehouse IT system, accounting errors and stock availability issues.
Mr Dunkerton said in July that SuperGroup was back on track and had silenced its critics after a surge in sales.
The company has ambitious international plans. Cengiz Cetindogan, chief executive of Demsa, said: “We aim to broaden our portfolio of investments and SuperGroup presented the perfect opportunity in the retail sector to partner with.”
Shares in SuperGroup rose 15, or 1pc, to £11.80.
Johannesburg – Shoprite Holdings [JSE:SHP], the largest retailer in Africa, said on Tuesday it plans to open 171 new stores by June 2014, including 47 outside its home market.
Shoprite, which currently operates 153 supermarkets in 16 countries outside of South Africa, made the statement in a document handed out at its full-year earnings news conference.
Earlier on Tuesday the retailer said it missed forecasts with an 11% rise in full-year profit as debt-laden consumers at its core South African market cut down on spending.
The Cape Town-based grocer reported that headline earnings per share (EPS) totalled 675.4 cents in the year to end-June, compared with 607c a year earlier.
Eleven analysts polled by Reuters were expecting the company to deliver headline EPS of 681c. Headline EPS, South Africa’s primary profit gauge, excludes certain one-time items.
Sales rose 12% to R92.7bn.
Shares in Shoprite, which have slumped more than 20% this year, fell 1.2% to R159.66, lagging behind a 0.9% decline in the JSE Top-40 index. From Fin24.com
The waiting list for the Birkin is set to grow even longer as luxury retailer Hermès expands to America following an 11.8 percent increase in revenues since last year with sales totaling at 3.5 billion euros.
The first of three major American retail projects, Hermes’ newly renovated Beverly Hills flagship store will open in September with double the amount of selling space whilst another 12,000-square-foot flagship is in the works for autumn 2014 in Miami’s Design District.
The Miami location is set to become the third flagship in the U.S., alongside Madison Avenue and Beverly Hills.
Whilst New York remains the only area with multiple stores, Robert Chavez, president and chief executive officer of Hermès USA, told WWD, ‘We would consider second locations at some point in the future in San Francisco and Los Angeles.’
With Chavez’s plans for American expansion showing no signs of abating, sales are set to soar!
IN WHAT it described as a challenging year, Shoprite Holdings, reported an 11.3% increase in headline earnings per share for the year to June, to of 675c.
Analysts say high unemployment and slow income growth have checked household expenditure, already crimped by soaring utility costs and rising debt.
As the country’s main engine of growth, consumer spending accounts for about 65% of gross domestic product, and a slowdown would have a marked effect on the growth outlook for South Africa. Other retailers have also noted the tougher trading conditions.
Turnover at Shoprite, South Africa’s largest supermarket chain, rose 12% to R92.747bn, from R82.731bn a year earlier. The company raised its trading margin to a record 5.8%.
Shoprite CEO Whitey Basson said growth within South Africa was hampered during the year by widespread labour unrest, rising costs fuelled by a weak rand, falling commodity prices and consumers’ lack of disposable income due to high levels of indebtedness.
“The country’s low growth rate created many challenges for the retail industry, a situation exacerbated by the government’s sluggish pace at creating an environment in which business could flourish,” he said.
“At the same time a lack of job opportunities increased the dependence of millions of South Africans on government grants of which the annual increase did not keep up with inflation.”
At the end of June, its supermarket operations in South Africa consisted of a network of 801 stores split between its three chains, Shoprite, Checkers and Usave. Together they increased sales by 9.8% to R70.926bn.
Internal food inflation during this time averaged 4.3%, slowing from 4,9% in 2012 and compared with an official food inflation figure of 6.1%.
Turnover in Shoprite slowed to 7.3% from 11.6% previously, partially caused by the increased pressure on consumers’ disposable income in the second half of the year.
Checkers, on the other hand, defied the general market trend, increasing turnover by 10.7% in its supermarkets and hyper stores.
Usave, which focuses on small-format, no-frills stores, continued its expansion drive in South Africa, bringing the national total to 243. During the period under review it increased turnover by 21.4%.
In terms of expansion, a further 109 supermarkets were confirmed for 2014 in South Africa, the group said.
In an environment in which trading conditions deteriorated markedly, the furniture division grew turnover by 4.7%, compared with 11.1% in 2012.
At Shoprite’s supermarket operations outside South Africa — where it trades from 192 stores in 16 countries — turnover increased by 27.9%, and by 15.3% on a same-store basis, with the major impetus coming from Nigeria, Zambia and Angola.
“We managed to open 19 new supermarkets and we have a further 20 confirmed for 2014,” Mr Basson said.
A total dividend of 338c per ordinary share was declared.
Looking ahead, Mr Basson said consumers would be even more exposed to the impact of the weaker rand as it worked itself through the economy.
Trade union Mandate yesterday issued the retailer with formal notice of industrial action beginning on September 10 at its stores in Tallaght and Dun Laoghaire, Mullingar and Naas.
It said 88pc of the 180 Irish workers facing losing their jobs are angered that the company is insisting on compulsory redundancies only.
General secretary John Douglas said: “The result of the ballot clearly indicates the level of unity among the Marks & Spencer workers.
“We have registered our frustration and disappointment with the company, whose actions have caused great anxiety for their workers.”
Marks & Spencer Ireland boss Jonathan Glenister said the firm was “disappointed by the result” of the ballot.
Qatar is believed to be the Middle East sovereign wealth fund among the bidders hoping to buy US luxury department store chain Saks Fifth Avenue, according to reports in the US media.
The unnamed fund, which the New York Post newspaper said was most likely to be Qatar, is part of three investors which are aiming to gain ownership of the popular chain.
The report said the Qataris were interested in buying rival chain Neiman Marcus earlier this year but the deal fell through.
Other bidders in the race to acquire Saks include Barry Sternlicht, the New York real estate mogul who created the W Hotels chain and Hudson’s Bay, the Canadian owner of department store Lord & Taylor.
Sternlicht’s bid is most likely to be the most successful, the report added.
Founded in 1898 in New York, Saks Fifth Avenue also has stores in Saudi Arabia, Bahrain and the UAE.
Saks’ shares rose 8 percent on Friday on reports of the latest bidders.
Overall, the retail giant’s shares are up 51 percent this year.
Qatar already owns Harrods, the luxury London department store, and is planning to expand the retail brand into the hospitality sector.
The Asda account is one of the biggest advertising contracts in the UK and is estimated to be worth £100m.
Saatchi & Saatchi has worked with the retailer since 2009, but the end of its contract also means the end of Asda’s 20-year relationship with Publicis, Saatchi & Saatchi’s parent company.
Saatchi & Saatchi was founded by Charles and Maurice Saatchi in 1970, but the brothers left to form M&C Saatchi in 1995 after a row with the company’s shareholders.
The company was used by Baroness Thatcher to create the “Labour isn’t working” poster in the run-up to the 1979 general election and was also behind the British Airways advert that proclaimed the airline “The World’s Favourite Airline”.
At Asda, Saatchi & Saatchi has overseen the retailer’s “Price Lock” campaign that pledged to keep the price of key grocery items such as milk at a consistent price.
Its Christmas advert for Asda last year attracted 620 complaints because of claims it was sexist by showing a mother organising a family’s Christmas. However, these complaints were dismissed by the Advertising Standards Agency.
Asda is thought to be considering signing up JWT London or VCCP to be its new advertising agency. The company, which owned by US retail group Walmart, declined to comment.
Last week, Asda reported like-for-like sales growth of 0.7pc for the 12 weeks to July 5, a slowdown on the 1.3pc in the first quarter of the year.
Andy Clarke, chief executive, said Asda’s strategy of holding down prices on essential food items such as milk is “working”. He said there was “significant” price inflation among its rivals, despite the voucher campaigns launched by Tesco and Sainsbury’s, and pledged that Asda will not be distracted by “gimmicks”.
The change of agency at Asda comes after Chris McDonough, formerly of Molson Coors, was hired as its new marketing director earlier this year.
South African retail space overtraded
Desmond (Des) de Beer Managing director of Resilient Property Income Fund says developers of new shopping centres are vying so aggressively to sign up national tenants that incentives like full store fit-outs and cancellation clauses are becoming the norm
Developers of new shopping centres are competing so aggressively to sign up national tenants that incentives like full store fit-outs and cancellation clauses are becoming the norm.
That means retailers can simply walk away from a new centre if they don’t trade successfully, leaving all the risk to the developer, according to Resilient Property Income Fund MD Des de Beer.
There’s still money to be made in the highly competitive rural and township retail space if you own established, dominant malls. But it is becoming more difficult to turn a decent profit on new shopping centres, says De Beer.
The company’s foray into townships and platteland areas like Nelspruit, Polokwane, Witbank, Burgersfort, Brits and Kathu over the past few years has delivered stellar returns on the back of the growth of the black middle class and the rapid expansion of government’s social grant system.
Investment Property Databank (IPD) last month ranked Resilient as SA’s top-performing listed property fund over three years in terms of total returns on underlying assets.
But De Beer told analysts at last week’s results presentation that he wouldn’t be building any more shopping centres in SA. The 58000m² Secunda Mall, scheduled to open in October, and the 34000m² Soshanguve Crossing, set for an April 2014 completion, will probably be Resilient’s last two regional mall developments in SA.
The company is now looking outside SA for growth opportunities.
De Beer says retailers are still keen to expand existing stores in malls with a good track record, but there’s only so much retail spend available in the SA economy. “Cannibalisation is now a reality. The stronger centres are taking away spend from the weaker centres.”
Resilient last week reported average retail sales growth of 8,5% from January to June 2013 (year on year) across its 23 shopping centres.
The portfolio has a negligible vacancy rate of less than 2%.
Some centres, like Mall of the North (Polokwane), Brits Mall and The Grove in Pretoria, achieved double-digit growth. That is despite indirect exposure to the beleaguered platinum mining sector in the North West, which negatively affected sales growth at Resilient’s Northam Plaza.
But the better than expected 12,83% growth in distributions for the six months to the end of June was largely driven by Resilient’s offshore holdings in Romanian-focused New Europe Property Investments and Rockcastle Global Real Estate Co, through the weaker rand.
De Beer would like to increase Resilient’s offshore exposure from the current 13,5% of total assets to 35%. Expansion into Africa, which offers dollar-based income, will be a growth area for the group over the next three to five years.
Resilient has already committed R600m to building five shopping centres of between 10000m² and 15000m² in Nigeria in a joint venture with Shoprite Checkers and Standard Bank.
The first Nigerian centre, Delta Mall, is already under construction. But De Beer notes the African growth story will not happen overnight. “It takes more than two years to build a mall in Nigeria versus nine months in Romania.”
Meanwhile, Resilient will continue to grow its SA assets through extension and redevelopment opportunities, as well as potential acquisitions of existing, distressed centres with turnaround potential. Extension projects worth R675m are in progress at seven of the group’s shopping centres.
Resilient is trading at a forward yield of just below 6% versus the sector’s 7,3%, so the stock is by no means cheap. Coronation Fund Managers property analyst Anton de Goede says despite a demanding yield, Resilient still offers fair value, given management’s proven ability to consistently deliver above-sector distribution growth.
“Resilient is a dominant player in its market and [therefore] has a captive tenant and client base, which bodes well for continued positive income growth in its centres.”
Retail 360 retail news http://flip.it/8GDuY NOW ON FLIPBOARD …For ipad and iPhone
Rapper Dr Dre and music producer Jimmy Iovine want to bring fresh investors into the business to grow a product beloved by footballers and celebrities.
It comes as HTC, Taiwan’s largest smartphone maker, grapples with falling sales amid a highly competitive market.
HTC bought a 50.1pc stake in Beats in August 2011 for $300m (£192m), incorporating Beats’ audio system into its phones in a bid to strengthen its position in the US.
HTC was the top seller of Android-based smartphones in the US in 2010, with a market share of 11.8pc, but lost the top spot to Samsung just two years later.
However, the tie-up with Beats failed to arrest HTC’s decline and it sold half its stake back to Dr Dre and Mr Iovine last year at a $5m loss.
“I haven’t seen much synergy from the cooperation,” BNP Paribas analyst Laura Chen told the Wall Street Journal (WSJ). “Beats has an advanced audio system and design, but it turned out having that in HTC phones didn’t help sales in a meaningful way.”
Last month, HTC shares slumped to their lowest level in eight years after it predicted an eighth straight fall in quarterly sales. It sees revenues of NT$60bn (£1.3bn) in the three months to the end of September, well short of analyst expectations of NT$72.7bn. The company may also post a loss.
In contrast, Beats, whose headphones can sell for hundreds of pounds each, saw revenues jump to around $1bn last year from less than $200m in 2010, WSJ reported.
It currently holds 59pc of the US market for premium headphones, according to NPD Group.
Beats, which was set up in 2008, has recently attempted to raise funds to diversify the company. It is believed to be looking at branching out into speakers, car stereos and a music streaming service.
HTC said it has “enjoyed a solid business partnership” with Beats.
Beats did not respond to a request for comment.
Uniqlo’s debut childrenswear collection
Uniqlo is our go-to brand for basics. Whether it’s their Heattech thermals and bargain cashmere or their perfectly simple silk blouses, it never fails to please – and now it can please the little ones too.
From today, the Japanese brand launches its first ever line of childrenswear, catering for newborns up to age 12.
The collection sees key Uniqlo pieces, such as the aforementioned Heattech, adjusted to fit in with a kid’s lifestyle. All outerwear comes with an interior name label to prevent mix ups at school, pockets are reinforced to stop tears and waistbands are fully adjustable. The brand’s ever-popular coloured skinny jeans have been miniaturised, as have the poly-filled down jackets and checked flannel shirts.
“We are extremely pleased to be launching kids into the UK market this season,” says Dr Berndt Hauptkom, Uniqlo Europe CEO. “The collection encapsulates the high quality design aesthetic and innovative fabrics that UNIQLO uses across all its collections, and we are confident the collection will be a success among both current and new UNIQLO customers.”
The collection is available exclusively online from today, before rolling out to stores nationwide from Friday, August 23.
The store will be in the Park House complex on Oxford Street and will be the largest Pandora concept store in the world
The exclusively located 200 sqm retail space, over two floors, has been carefully designed by Grapes Associates, who have initiated a brand new evolution in the Pandora store design; one which will be the first of its kind in the UK. The designers, who have worked with numerous high-end brands, such as The Dorchester, have ensured the space will reflect Pandora’s feminine and sophisticated vision.
With carefully positioned spotlights and ornate picture frames providing new display units with an elegant outline, there is something fresh yet Scandinavian about the new store.
Heightening the consumer shopping experience and in addition to a spacious ground floor, the new flagship store will utilise the first floor for entertaining, with a unique sculptural meeting bar on the first floor. The bar will form part of a wider VIP events space for press meetings, celebrity appointments and other special occasions.
Peter Andersen, president for Pandora Western Europe said; “London is the fashion capital of the world and our global flagship store on Oxford Street will amplify our position in the market as a leading jewellery brand. We have wanted to open a Pandora global flagship store in London since the beginning and this is something we have been working towards for five years, we are very happy to have been able to realise our dream. The store will allow us to offer an unrivalled customer experience and will be a major attraction for shoppers from across the globe.”
Allan Leighton, CEO of Pandora added: “Our Oxford Street store has been our plan for some time; we were uncompromising on location and store design. The finished article is something we are very proud and excited about. We want to offer our customers good quality jewellery at affordable prices in an aspirational setting and our Flagship store achieves this. The UK business has accomplished a strong brand presence and a loyal following over the last five years and we feel this store represents the brand entering a new stage of its evolution.”
The store, which will be the 106th Pandora concept store to launch in the UK, will officially open on August 30.
Locals have expressed concern that plans for a flagship M&S store on the outskirts of Limerick city will be devastating for the city centre
Limerick businesses have voiced concern that plans for a new Marks & Spencer flagship store on the outskirts of the city will bury hopes for a revitalisation of the city centre. M&S plans on building a €150 million store on the Parkway Valley site on the Dublin Road. The announcement, made last week by the retailer, was initially dampened by claims of planning permission obstacles but reports this week have put these to bed.
Belfast based and Indian born developer Suneil Sharma has some three and a half years left to build the mammoth shopping centre within the current confines of the planning application, approved by Limerick County Council. Now, after the announcement by M&S that they have signed up to the development in principle, subject to planning, there is more impetus than ever to raise this “skeleton of metal” from the ground.
“I think it’s going to be a major blow and crisis for the city,” said Limerick Councillor Michael Sheahan, “but if it’s a fait accompli, then we have to accept it.” In the face of retail strategies asserting Limerick city’s top tier importance in the Mid-West, and countless visionary reports such as Limerick 2030, “officials have been left with egg on their face”, he said.
David O’Brien, manager of the Milk Market in the centre of Limerick, said “the city is dead as it is, this will bury it and put the final nail in the coffin. The city’s supremos have to fight this. Marks & Spencer is a fantastic brand, but if they don’t come in to the city centre they should be discouraged.
“Equally, it’s interesting that the story was announced the same day they closed four other stores around the country. Are strings being pulled? Are we being used as puppets, in the sense of, ‘here’s the good story, here’s the bad story’, and maybe nothing is going to happen here. Maybe this is just another one of those nudges.”
Former Mayor of Limerick, independent councillor John Gilligan, is also nervous about wholeheartedly welcoming any jobs boost created by the centre – up to 1,000 according to Mr Sharma – due to the potential displacement of jobs in the city. The continued focus and hype surrounding the British store is detracting from many real issues that need to be addressed, he believes. “Retail isn’t the be all and end all. What we need is more jobs for people in the city, so that they have the disposable income to live in the city and spend in the city,” he said.
“Marks & Spencer could stabilise the city centre, and we shouldn’t give up hope that this could happen down the line. There is a long way to go yet before Marks & Spencer move in anywhere.” Retail Excellence Ireland says it doesn’t believe Marks & Spencer is aware of the opportunities available to it in Limerick city centre. Chief executive David Fitzsimons said he believes the significant plans to revive the city centre, including the much-awaited and long heralded redevelopment of the Arthur’s Quay shopping centre, will provide adequate space for retailers requiring a large retail footprint. “I know fundamentally that they (M&S) haven’t been offered a deal with regard to the city centre. Within the next two months there will be an investment strategy launched within Limerick by the town team that will outline to potential retail and hospitality investors the vision for the city, the opportunity within the city, and also the incentive to come to the city, and that hasn’t been documented yet. I don’t believe anything as of yet has been presented to Marks & Spencer.”
A leaked memo from Forever 21 shows the fast-fashion apparel retailer plans to cut the hours of some full-time employees and reclassify them as part-time, starting Sunday.
“Company-wide, Forever 21 recently audited its staffing levels, staffing needs and payroll in conduction with reviewing its overall spending budget,” Carla Macias, associate director of human resources at the company, wrote in the memo to affected employees. “As a result, we are reducing a number of full-time non-management positions.”
Although it’s unclear exactly how many of the 30,000 or so Forever 21 employees will move go part-time, the company said in a statement on Facebook that the cuts affect “less than 1% of of all U.S. store employees.” The affected positions include stock associates, sales associates, store maintenance associates, accessory specialists and cashiers, the memo states.
Employees who received the memo will have their hours reduced to a maximum of 29.5 a week — just under the 30-hour full-time designation assigned by the Affordable Care Act, which requires companies who employ 50 or more workers to provide health insurance coverage for their full-time employees or face a penalty.
Newly part-time workers who were enrolled in medical, dental, vision and voluntary plans will also see their coverage cut off on Aug. 31, and they won’t be able to receive paid time off.
Angry consumers have inundated Forever 21’s Facebook page with comments threatening boycotts and accusing the company of punishing its own employees in retaliation for the Affordable Care Act.
“Just lost my daughter’s time and my dollars,” one commenter wrote. “Your politics should not victimize your workers.”
Others slammed Forever 21 for not doing its “fair share” to support the communities that shop at its stores by offering more full-time jobs.
“Cutting benefits and finding loopholes to put more money in your pockets is not right,” an outraged commenter complained.
“Your first priority should be the people that work to bring you your profit, not lining the pockets of your executives. Shame on you for being yet another company to leech off of the American people,” wrote another.
The retailer denied speculation from customers and the media that the decision had anything to do with the costs of Obamacare. “Forever 21, like all retailers, staffs its stores based on projected store sales, completely independent of the Affordable Care Act,” the company said on Facebook.
The privately-held company appears to be doing quite well, however. CEO Do Won Chang told CNN last September that the company was on track to make $4 billion in 2012. In a note to clients in March, Bank of America analysts lauded Forever 21 as “the most transformative retail concept.”
“Forever 21 is becoming too big for the specialty retailers to ignore,” the analysts wrote. “At this size, rapid growth could have ripple effects on the other retailers as Forever 21 takes more share.”
When it generated sales of $15.7bn (£10.1bn) in its most recent quarter to June 30, how big were Amazon’s profits? Zero. It made a net loss of $7m.
Given the retrenchment of retailers such as Tesco from the electricals market because of the growth of online sales, what share of the UK electricals market does Amazon have? Just 5pc.
Every retailer in the country – from Tesco to the corner shop newsagent – talks about how they are battling to evolve their own business to cope with the growing influence of the Seattle-based company.
The mighty Tesco has been forced to admit its biggest hypermarkets are outdated and overhaul its non-food range, Comet and HMV have fallen into administration, newsagents have installed lockers where shoppers can collect Amazon orders, and people are now reading books on their Amazon-made Kindles.
Even those retailers operating in sectors that Amazon does not currently serve – such as food and fashion – are worried about what happens when it starts.
Yet, at the same time, so many uncertainties remain about the future of Amazon, launched in 1995 as an online bookstore.
The speed of Amazon’s development and innovation has left parts of the high street in ruins. But the company does not appear to have cracked the most basic business rule of them all – how to make a profit.
The row around the lack of corporation tax paid by online multinationals such as Amazon tended to miss this pivotal point – that a key reason Amazon does not pay much tax on its multi-billion pounds of sales is that it does not much make much profit.
So, while bookshops are battling to make enough money to pay the rent and Tesco is trying to explain to shareholders why its annual pre-tax profits have fallen to £1.96bn, Amazon is playing a different game entirely.
So far, shareholders in the US have backed Amazon because they believe its rapid growth will eventually deliver it to a scale and market dominance that generates substantial profits and investor returns.
Jeff Bezos, the founder of Amazon, has made a persuasive case for Amazon’s future prospects. He has long expressed his disdain for short-term profitability, constantly emphasising the need to plough funds into growing and evolving, whether through new hi-tech warehouses or acquisitions. Profits, he has always argued, will come later.
So far, Bezos has delivered.
Amazon is the clear market leader in a rapidly growing industry and experts predict it will be the ninth-biggest retailer in the world by 2018, despite having no stores.
Over the past five years, shares in the company have risen by more than 500pc.
In the UK, Amazon first arrived in 1998 through buying bookpages.co.uk, which eventually became Amazon UK. In the following 15 years, the speed at which Amazon has changed how customers shop and the retail industry itself is eye-watering.
According to data from Experian, Amazon accounts for 12pc of all visits to retail sites in the UK. Only auction site eBay has a larger share, with 19pc, while Argos accounts for just 2pc.
Despite the fact it is one of the longest-established online retailers, its market share on the internet is still growing. In the past year, visits to Amazon increased 80pc, more than double the 35pc growth for retail overall.
In terms of sales, Amazon now controls 23.4pc of the entertainment market, up from 20pc a year ago. Tesco, its nearest rival, has just 13.2pc
But it not just this dominance of the market that rivals admire, it is the quality of the technology and distribution network at its disposal.
Amazon’s distribution network – which includes eight fulfilment centres in the UK – is unrivalled for speed. Meanwhile, Amazon’s website is also way ahead of other retailers in terms of how to condense its huge array of products into a relevant offering for customers, and how to encourage shoppers who visit the website to spend more than they intended.
Amazon’s technology allows it to suggest relevant products that customers might want to buy based on their previous searches and purchases, while personal emails are also sent to users.
Retail experts talk about how personalisation is the next big step for online retailing, but Amazon is already there.
Yet, the profit issue suggests that Amazon’s model is not infallible or entirely proven. As high street retailers have to adapt to fight Amazon, so might Amazon have to adapt, too.
In order to make sustainable profits to please investors, the retailer could eventually have to turn off the tap on capital expenditure and cutting prices, while some retail experts have suggested that Amazon could start to focus on making money through its marketplace service, which offers a platform for other retailers to sell their products.
Some rivals have now found ways to take on Amazon. Electricals retailer Dixons, whose demise at the hands of Amazon has long been predicted, is growing sales in the UK. The company, which has 21pc of the electricals market compared with 5pc for Amazon, has focused on matching Amazon on price, then striking deals with key suppliers, such as television maker LG, to sell products exclusively – meaning that Amazon cannot sell them at all – and drastically improving customer service.
Dixons believes its high street stores and staff are key in the battle with Amazon – which can appear as faceless to customers – with shops acting as collection points for orders.
It would be foolish though to underestimate the ambitions of Amazon. It has built an unassailable position in online retailing and now is trying to take on the biggest three retailers in the world – Walmart, Carrefour and Tesco.
Amazon is still investing billions of dollars every year into new infrastructure and exploring new ventures. For example, Amazon’s fledging food business, AmazonFresh, is expanding from its home city of Seattle to California, and there are rumours that a mysterious warehouse it has bought near New York could be used to expand the grocery offer to the east coast.
The cat was let out of the bag in May when Gisele was seen photographing H&M’s autumn/winter 2013 campaign on a pretty central London street, and now we can finally see the official images.
So chic does the Brazilian beauty look that we’re fighting the urge to run out and buy our entire winter wardrobe right now
It’s not the first time Bündchen had worked with the brand though – she starred in their spring/summer 2011 campaign, which famously had to have additional clothing added digitally to make it appropriate for use in the Middle East.
The mother-of-two follows in the footsteps of Beyoncé, who was the face for the spring/summer 2013 season and even made a full-blown music video to promote her collaboration with the high street brand.
Last year, Gisele, who is married to American footballer Tom Brady, was named the highest-earning model for the sixth year running with estimated earnings of $45 million. That would buy a lot of H&M clothes.
L’Oreal SA, (OR) the world’s largest maker of cosmetics, agreed to buy Magic Holdings International Ltd. (1633), a Chinese maker of cosmetic facial masks, for about HK$6.54 billion ($843 million) in cash to expand in Asia.
L’Oreal will pay HK$6.30 per share for Hong Kong-based Magic, the companies said in a joint filing yesterday, a premium of about 25 percent over the last trading price of HK$5.05 a share. Magic will resume trading in Hong Kong today.
Magic had sales of 150 million euros ($199 million) in 2012, according to an e-mailed statement from L’Oreal, which said facial masks are one of the fastest-growing areas with “very promising development prospects.” L’Oreal last month posted sales growth that missed estimates amid the weakest performance in North America for two years while first-half sales in the Asia Pacific region rose 5.1 percent.
“Not only does this give L’Oreal leadership in a fast-growth category but also provides Magic Holdings 12,471 points of sale spread over 23 provinces,” said Chas Manso de Zuniga, an analyst at Societe Generale SA. “This should allow L’Oreal to accelerate the growth of its own brands in China through a greater distribution reach.”
Paris-based L’Oreal is paying 20 times Magic’s 2012 earnings before interest, taxes, depreciation and amortization, Manso de Zuniga estimated.
“L’Oreal intends to develop this Chinese brand by contributing its science-based expertise and using its advance and applied research in its China Research & Innovation center and across the world,” L’Oreal said in its statement. L’Oreal has 3,500 employees in China, a country it entered in 1997.
BNP Paribas SA, which advised L’Oreal, has also offered the French company a credit facility worth 650 million euros to pay for the transaction, according to the filing.
L’Oreal said Magic’s board and shareholders, representing 62 percent of the company’s equity, support the proposed deal.
Cincinnati — Macy’s scaled back its earnings guidance for the remainder of the year in the wake of lower-than-expected net income for the second quarter of fiscal 2013. The retailer reported net income of $281 million, up from $279 million in the year ago period, but short of the roughly $304 million analysts had expected.
In addition, net sales fell .08% to about $6.07 billion instead of climbing 3% to $6.2.6 billion as analysts had expected. Same-store sales also declined .08%. As a result, Macy’s now predicts earnings for fiscal 2013 in the range of $3.80 to $3.90 per diluted share. Terry J. Lundgren, chairman, president and CEO of Macy’s, said consumer concerns about the economy impacted their spending during the quarter.
“We had planned our second quarter sales with a lower increase than the first quarter because of a shift in a major promotional event,” said Lundgren. “Even so, second quarter sales performance was softer than anticipated, and we are disappointed with the results. Our performance in the period, in part, reflects consumers’ continuing uncertainty about spending on discretionary items in the current economic environment. After a cool spring, we have taken appropriate markdowns and customers are responding favorably. Also on the positive side, we have seen a strengthening of the sales trend in key elements of women’s ready-to-wear, a category which has lagged over the past couple of years. Bloomingdale’s sales rebounded in the second quarter, and we are encouraged by our recent momentum,
Looking ahead, Lundgren said incremental sales opportunities in childrenswear, activewear and Impulse apparel, as well as intensified marketing support, omni-channel and online initiatives, localization and customer engagement strategies should all help boost sales later this year.
“Going into the third quarter, we also are encouraged by our early read on the back-to-school season,” he said. “We accelerated receipts of fresh inventory at Macy’s so we could be fully prepared for an early start to the academic year in certain regions of the country.”
INVESTORS in D2 Private, including David Arnold, the father of actress Leigh Arnold, are close to bagging a significant profit by selling Marks & Spencer’s headquarters in London for €240m.
This is the final asset to be sold in the UK by D2, which once held a £1bn London portfolio.
The colossal M&S building in Paddington called Waterside House, close to Paddington Station, was bought with debt of about €170m from Anglo Irish Bank during the boom.
It was sold last week by D2 working with the National Asset Management Agency to an Asian consortium led by GAW Capital Partners, according to leading UK property publication the Estates Gazette. The price was sufficient to repay all the buildings debt and return investors their stake plus a premium. The sale price represents a 5.12 per cent yield.
The Sunday Independent understands that Arnold was the building’s biggest Irish shareholder, with a stake of almost 16 per cent. Fellow D2 co-founder Deirdre Foley owned about 9 per cent of the building.
About 20 other investors also once owned the building, including senior counsel John Gordon, the estate of former Elan chief executive Donal Geaney; and Kerry-based Kerogue Holdings also owned shares. Catherine Mullarkey, an ex-Anglo banker who also served on the board of the Dublin Docklands Development Authority, owned about 2 per cent. Other shareholders were businessmen Patrick Mooney, barrister Liam Reidy and Brooklawn Property Holdings.
CBRE and Jones Lang LaSalle are advising D2 and all parties have declined to comment.
The potential sale was described by Estates Gazette as symbolising a “historic shift,” as Irish investors shed assets to funds from China, Korea and Malaysia.
DTZ estimates that net Irish sales from 2009 to today have reached more than £3bn, often due to Nama sales.
Other properties sold by D2 include some of the best properties in London: 11-12 St James’s Square, SW1; 23 Savile Row, W1; Woolgate Exchange, EC2; and 1-19 Victoria Street, SW1.
Well-known investors who were involved in D2 syndicates include Bernard McNamara, the developer; Sean FitzPatrick, the former Anglo banker; and one-time AIB chairman and former attorney general Dermot Gleeson.
Sales of D2 assets have been lucrative for Nama but have been a mixed bag for investors.
Leading sportswear brand, Adidas, is planning a UK roll out of its own-brand retail stores.
Starting with the launch of a new Leeds store this Friday (16 August 2013), Adidas said it will set about expanding its own-store presence as part of a strategy to grow its share of the premium brand market.
The Leeds store opening is claimed to mark the beginning of the brand’s growth plans, with the aim of developing a presence across major cities throughout the UK. Currently Adidas has six stores across London, Manchester, Birmingham and Liverpool.
The arrival of Adidas to the Leeds high street will bring 34 new jobs to the city, a trend that will be continued with the brand’s planned expansion across the UK’s major cities.
The new store is set to be the brand’s biggest store outside of the capital, with a 608sq m of sales real estate in the new Trinity Leeds Shopping Centre. According to Adidas, it will feature the best in sports performance and fashion ranges and will further benefit from having the only dedicated Adidas by Stella McCartney area outside of the capital.
In a bid to bring a unique Adidas retail experience to the new Leeds store, 46% of the Adidas originals range will be exclusive to the Leeds store. It will also benefit from exclusive colourways of the brand’s popular ZX footwear range and a specialist sports performance area catering for the city’s passion for football, rugby and also cycling ahead of the Tour de France coming to Yorkshire in 2014.
Alongside the specialist sports performance areas comes specialist knowledge, said Adidas. It claims it is renowned for a mix of the best training in the industry and staff have a genuine passion for their areas of expertise. Customers are given a knowledgeable and informed service to ensure they make the right product choices for their sport, the brand said.
Rupert Campbell, retail director for Adidas UK, said: “Leeds is the first step in an effort to increase our own-store growth and with its great football and rugby heritage, famous University and reputation as a UK fashion-hub; Leeds was the perfect place to start this.
“The arrival of our biggest store outside of London will provide new jobs and a unique adidas experience for the people of Leeds and this is something we hope to replicate elsewhere in the UK and are very proud of as a brand.”
LVMH Louis Vuitton Moet Hennessy, the French luxury goods conglomerate part owned by Qatar, has expanded its hospitality division with the acquisition of the Hotel Saint-Barth Isle de France on the Caribbean island of Saint Barts.
The latest addition to LVMH’s growing portfolio of five-star hotels consists of 39 rooms, suites and villas and was bought for an undisclosed sum. Other luxury hotel portfolio already includes properties in Paris, the Maldives and Oman.
LVMH was formed by the 1987 merger of fashion house Louis Vuitton with champagne and liquor makers Moët Hennessy. Sovereign wealth fund Qatar Holding holds a 1.03 percent interest in the company, which was valued at around 699m euro ($914m) last year.
LVMH’s profits for the first half of 2013 rose two percent to €2.71bn ($3.6bn), the Paris-based company said last month. Total sales for the six months were also up 5.6 percent to €13.7bn.
LISTED retailer Spar Group has joined the foray into the forecourt stores business with the opening of its first Spar Express store in Germiston on Wednesday.
Through a partnership with service station operator Shell, Spar is testing the waters of the forecourt business with the roll-out of about three or four Spar Express stores in Gauteng over about nine months.
This is according to Spar group business development manager Bill Brown, who said on Tuesday the partnership with Shell — which mirrors similar Shell-Spar agreements in offshore countries such as Austria and Germany — would first “test the water in this market”.
Should the venture prove successful, Spar Express stores would be rolled out further, Mr Brown said.
Spar joins other major retailers in the forecourt market, including Pick n Pay, Woolworths and Fruit & Veg City, as well as service station operators with their own retail offerings such as Sasol Delight! and Total’s Bonjour.
In April 2012, Pick n Pay announced the roll-out of Pick n Pay Express stores at BP service stations.
Fruit & Veg City, the owners of Food Lover’s Market and Freshstop forecourt stores, has a partnership with Caltex, while Woolworths has a similar partnership with Engen.
The first Spar Express store, to open on Wednesday, is at the Shell station on the corner of Webber Road and Karen Avenue in Germiston, Gauteng.
Shell also has its own Shell Select stores.
Mr Brown said the Spar Express stores would be smaller than Spar’s Kwikspar outlets, and the 24-hour stores would be designed for convenience.
Avior Research analyst Michael McLeod said on Tuesday that Spar’s forecourt roll-out “is broadly positive but is not a game changer” for the group.
Mr McLeod said while forecourt operations contributed to the likes of Pick n Pay and Woolworths’ earnings, “it’s never going to be a big contributor, and I think it will be the same for Spar”.
However, “it is another platform and from that perspective it does increase the ability to drive top-line growth”.
Mr McLeod said the move would also contribute “to a certain degree” to brand awareness, and could contribute — albeit in a small way — to Spar’s brand platform in Gauteng. The retailer was better represented in rural areas than in major cities, he said.
Shell South Africa GM for retail services Farouk Farista said the forecourt convenience retail market in the country was a fast-changing and highly competitive environment.
Has Bill Ackman Jumped the Shark in Retail?
Bill Ackman resigned from J.C. Penney Co. (JCP)’s board after a public fight with his fellow directors, capping more than two years of agitating to remake the retailer that left him with $700 million in potential losses on his stake in the department-store chain.
Ronald Tysoe, a former vice chairman of Federated Department Stores Inc., now Macy’s Inc. (M), was named to the board and another director will be added in the “near future,” the Plano, Texas-based company said in a statement today.
The departure lets Chief Executive Officer Mike Ullman pursue a turnaround without internal pressure from Ackman, who was urging the ouster of Chairman Tom Engibous and a speedier search for a new CEO. Ullman and Engibous, who are working to help the retailer rebound from its worst sales year in more than two decades, have the board’s “overwhelming support,” J.C. Penney said.
Ackman’s resignation “doesn’t change the situation on the ground for the company,” Michael Binetti, an analyst at UBS AG in New York, said in an interview. The move also signals that J.C. Penney’s fundamentals still may be deteriorating because Ackman wouldn’t be acting so urgently if the results were getting better, he said.
J.C. Penney fell 2.5 percent to $12.84 at 12:34 p.m. in New York. The shares slid 33 percent this year through yesterday, compared with an 18 percent gain for the Standard & Poor’s 500 Index.
Ackman joined J.C. Penney’s board in February 2011 after his New York-based hedge fund Pershing Square Capital Management amassed a stake in the department-store chain that made it one of the company’s largest investors. He soon pressed to replace Ullman, who had been CEO for more than six years, with Ron Johnson, the executive who helped build Apple Inc.’s chain of retail stores.
Johnson, with Ackman’s support, instituted sweeping changes at J.C. Penney, including ending discounting and remaking the stores into collections of boutiques. The strategy flopped with the chain’s customers, resulting in a $985 million loss for the year ended in February as sales plunged 25 percent to the lowest since at least 1987.
J.C. Penney ousted Johnson in April and reinstated Ullman, 66, to stabilize the company. He has revived price cutting and brought back merchandise to attract core customers while shoring up J.C. Penney’s cash balance with a $2.25 billion loan and an $850 million drawdown from a revolving credit facility.
The board began looking for a long-term CEO last month, Engibous said in a letter on Aug. 8. Ackman was pushing to find someone by mid-September since there were only a few candidates, a person familiar with the matter said then. Ackman’s resignation will probably help the search because there will be less interference from the board, Matthew Boss, an analyst for JPMorgan Chase & Co. in New York, who has a neutral rating on shares, wrote today in a note to clients.
Ackman drew the board’s anger last week by making public two letters asking to speed up the CEO search and later asking to oust Engibous, saying the board wasn’t functioning effectively. Ackman told the board members that he had persuaded former J.C. Penney CEO Allen Questrom to agree to return as chairman.
J.C. Penney fought back, saying that the board supported Ullman and Engibous that Ackman’s statements were “misleading, inaccurate and counterproductive.” Management also gained the support of investors Soros Fund Management LLC and Glenview Capital Management LLC, according to people familiar with the situation. Steve Bruce, a Glenview spokesman who works for ASC Communications, said today in a statement that the firm was a passive investor in J.C. Penney and had taken no sides in the dispute.
Based on Pershing Square’s filings with the U.S. Securities and Exchange Commission and J.C. Penney’s closing price of $13.17 a share yesterday, the firm has a current paper loss of about $701.7 million on its investment in the retailer.
Pershing Square, which is the chain’s largest investor with about an 18 percent stake as of July, has a paper loss of about $497.5 million on the roughly $1 billion that the fund spent to acquire 39 million J.C. Penney shares at an average price of $25.90 each. In addition, the fund has partially realized losses of about $204.2 million on total return swaps tied to the price of J.C. Penney shares.
Ackman is restricted from selling Pershing’s shares for the time being because he has material non-public information as a former director, Daphne Avila, a J.C. Penney spokeswoman, said in an e-mail. That may change once the second-quarter blackout period has ended, she said, without providing a date.
“The addition of two new directors and my stepping down from the Board is the most constructive way forward for J.C. Penney and all other parties involved,” Ackman said in today’s statement.
J.C. Penney is scheduled to report second-quarter results, the first full quarter under Ullman, on Aug. 20. Sales may decline about 8 percent to $2.78 billion, according to the average of 18 analysts’ estimates compiled by Bloomberg. The adjusted loss may widen to $1.07 a share, analysts project.
The new Finglas store has created 24 jobs for the local area
Discounter Dealz has opened its 27th store in the Republic of Ireland with a new store opening in Finglas in north Dublin. The 5,000 sq ft store has also created 24 new jobs for the local area. The Finglas store brings to 27 the number of Dealz outlets in Ireland and the number of people employed to over 630.
Items on sale at the new branch include groceries, cosmetics, household essentials, stationary and toys. A number of well-known brands will be available alongside Dealz own-brand products. Speaking about the Finglas store opening, Dealz business manager Liam Igoe said: “We are extremely excited to be further expanding the Dealz portfolio in Ireland with the opening of our twenty-seventh store in Finglas. At Dealz we are committed to bringing amazing value every day to customers with our €1.49 price point and are looking forward to bringing an extensive range of products offering amazing value to new customers in Finglas. We will also have a number of special promotions at key price points for our customers.”
Customers at Dealz Finglas will be able to choose from more than 3,000 products, including over 1,000 well-known brands and every day essentials across 17 product categories, including food and drink, health and beauty, baby, batteries, homewares, pet, books and DVDs, toys, and celebrations. The price point for the majority of products in Dealz stores is €1.49 offering customers amazing value. In addition there will always be a number of special promotions at key price points.
The UAE’s Korath Holding has signed a $5m deal to open 26 Hawes & Curtis stores across the Gulf over the next five years.
Hawes & Curtis, a British shirt specialist based in London’s Jermyn Street, is owned by entrepreneur Touker Suleyman.
According to a report in the Daily Telegraph, the shirtmaker will open its first outlet this year at the soon-to-be-launched World Trade Centre Mall in Abu Dhabi.
“We are really excited about this opportunity and are looking forward to working with such an established British brand,” Riz Korath, the chief executive of Korath Holding, told the newspaper. “It’s great to be bringing British heritage to the Middle East.”
The Hawes & Curtis brand was set up in 1913, and has 30 shops in the UK. Suleyman also told the Telegraph that he was planning to launch stores in the US, Indonesia and elsewhere in the Far East.
Korath Holding, which was launched in the UAE in 1961 by chairman Korath Mohammed, runs a series of brands in the UAE, including KM Retail.
High-end stores including Alexander McQueen, Jimmy Choo, Bulgari and Emporio Armani will be launching on September 4 after Abu Dhabi’s first exclusively luxury shopping mall on Al Maryah Island opens this month.
Al Tayer Group, the company that owns the franchise to dozens of luxury brands in the UAE, said it would be launching 15 stores on that date at the 33,000 square metre The Galleria shopping centre linked to Mubadala Developments’ Sowwah Square office complex. Mubadala is a strategic investment company owned by the Abu Dhabi Government.
Stores operating under Al Tayer franchises at the centre also include Balenciaga, Bottega Veneta, Coach, Pucci, Moschino and the Emporio Armani Bakery.
But the jewellery brand Boucheron, which is also franchised by Al Tayer, will open later in the year.
The news comes as Mubadala and Gulf Related, the joint developers of the 121-store mall, prepare for a soft opening of the mall this month.
The partners said more than 100 luxury stores would open their doors at the end of this month, a number of which are currently only found in Dubai.
“Final preparations are under way for the opening of The Galleria,” said Kenneth Himmel, the co-managing partner of Gulf Related, and the president and chief executive of the American-based retail property firm Related Urban, the developer behind the Time Warner Centre in New York.
“With all units fully leased, we are working closely with retailers as a specific opening date is finalised for the coming weeks,” he said. “We anticipate that over 100 of our retail and F&B outlets will be operational on opening day.”
Other stores set to open in The Galleria include Burberry, Cartier, Christian Dior, Christian Louboutin, Dolce & Gabbana, DKNY, Fendi, Gucci, Longchamp, Mulberry, Prada, Tom Ford and Yves Saint Laurent.
Restaurants will include an offshoot of the London-based celebrity haunt Zuma.
The Galleria is the first of three new malls set to open in Abu Dhabi over the second half of this year. It will be followed by the 60,000 square metre Mall at the World Trade Centre attached to Central Market, which will include the region’s first House of Fraser store and the delayed Deerfields Townsquare community mall on the outskirts of the capital.
And in March the long-awaited 235,000 square metre Yas Mall super regional shopping centre is set to bring even more retail to Abu Dhabi when it becomes the country’s second-biggest shopping mall.
At the same time construction work is set to start on the Tourism Development and Investment Company’s 168,000 square metre luxury mall on Saadiyat Island, which is scheduled to complete in 2017.
And a 200,000 square metre Reem Mall on Reem Island, which was scheduled to complete last year, could bring the number higher.
Jones Lang LaSalle predicts the total retail space across Abu Dhabi will increase by 46 per cent from 1.78 million square metres at the start of this year to 2.6 million square metres by the end of 2015.
Atterbury has announced it is developing the 120,000sqm Mall of Africa, for R3.5 billion – South Africa’s largest single-phase shopping mall development to date – financed by Nedbank Corporate Property Finance.
The new super-regional Mall of Africa will be the heart of the ambitious Waterfall, a city superbly situated between Johannesburg and Pretoria, and developed on a scale beyond anything South Africa has known. With its development, leading South African property developer and investor Atterbury is raising the bar for retail centres on the continent.
Atterbury Property Developments MD James Ehlers says: “Developing a mall in the heart of the fastest growing urban node in Africa created the prospect for an exciting modern landmark. Mall of Africa’s sheer scale, distinctive design, exceptional location and top-notch retail mix puts it at the forefront of retail developments”.
With the first free-flow intersection of its size in Africa at the nearby Allandale Road exit from the N1 Highway, getting to Mall of Africa is easy. Massive road upgrades also ensure easy access. Besides road transport, it is minutes away from the Gautrain Midrand Station and enjoys superb proximity to OR Tambo International Airport, Midrand’s Grand Central Airport and Lanseria International Airport.
Earthworks for Mall of Africa began in October 2012. It is due to commence trading in the first half of 2016.
The two-level mall forms the hub of Waterfall Business Estate, a staggering 1,6 million square metre large mixed-use commercial development undertaken by Atterbury, and the most ambitious commercial development yet undertaken in southern Africa.
The highlight of Atterbury’s development is the exciting 800,000sqm mixed-use Waterfall City at the heart of Waterfall and, at its nucleus, is the Mall of Africa. The mall holds prime position in the tailor-made 330ha new city that embraces integrated living in its fullest live-work-shop-eat-play scope, with retail, offices, homes, hotels, a hospital, light industry and the all-important lifestyle and leisure components.
“Mall of Africa will be a visual, social and economic anchor within Waterfall City,” says Ehlers.
Over 300 shops, with seven anchor tenants and a carefully considered retail mix, will create a unique retail experience at Mall of Africa. It will provide a well-balanced variety of local and international brands, services, speciality shopping, entertainment and eateries. Flagship stores for all major South African retailers will be part of its attraction.
According to Cobus van Heerden, retail director, Atterbury Property Developments, international retailers are targeted, many of whom are not yet represented in South Africa. These range from luxury brands to the more mainstream. The response from them has been phenomenal and this will further differentiate this mall from current South African malls.
Its two levels of exceptional shopping will be matched by a two-level basement parkade.
“Besides striking dimensions and a wide array of retail, Mall of Africa’s bespoke amenities set it apart,” says Ehlers. The centre will feature valet parking, VIP lounge, spa, baby nursery and children’s park and play area.
Ehlers explains a mall of this scope suits the large, growing community living and working in and around Waterfall.
“An estimated 6.7 million people already live within an hour’s drive from the mall, of which 4.9 million people are within half-an-hour’s drive. This number will increase as the Waterfall precinct develops,” says Ehlers.
Most of this market comprises economically influential consumers – largely from the LSM 7 to 10 brackets. This puts Mall of Africa on the doorstep of many of South Africa top earners, executives, professionals and young entrepreneurs. Besides local shoppers, Ehlers notes the vibrant mall will also entice visitors to the city from South Africa, Africa and further afield.
Mall of Africa combines the latest international trends and environmentally sustainable materials and technologies. Its design is informed by the New Urbanism principles of walkable, mixed-use environments to create a truly cutting-edge shopping centre.
“Waterfall strives to promote an integrated, eco-friendly environment which provides good quality of life. At the epicentre of this energised precinct, Mall of Africa is a beacon celebrating connected living,” says Ehlers.
Mall of Africa’s architectural form is inspired by the geological beauty of Africa, fitting for the jewel in Waterfall’s crown.
It reflects this splendour using wood, stone, glass, concrete and other natural materials. The mall’s centre court takes inspiration from the forests of central Africa. Its other four courts reflect the four points of the compass on the African continent: the great lakes in the east, the oil and trade of the west, the sand of the north African desert and the mineral wealth of southern Africa.
“Mall of Africa sets a new benchmark in mixed-use shopping and entertainment. It forms an anchor around which a vibrant new city, with a modern new urban framework, will grow,” says Ehlers.
Leading SA property fund Atterbury Investment Holdings (AIH) is the major investor in Waterfall Business Estate, including the iconic mall, with an 80% stake. “Mall of Africa is expected to contribute positively to AIH’s sustainable growth and performance,” says Morne Wilken, CEO of AIH.
According to Ken Reynolds, Gauteng Regional Executive for Nedbank Corporate Property Finance, the successful conclusion of the finance deal, which is the highest ever concluded by Nedbank, came on the back of a comprehensive tender process and demonstrates the high levels of confidence that participants in the South African property industry have in Nedbank Corporate Property Finance’s reputation as a market leader.
“Nedbank Corporate Property Finance prides itself in providing agile solutions that enable opportunities for our clients, which has resulted in our market-leading position today.
“In addition, Nedbank and Atterbury have developed a solid business relationship over the years, and we are proud of our role in enabling our client’s vision for the Waterfall precinct. Our relationship is built on mutual trust and respect, an understanding of each others’ business models, and a shared vision of the potential that South Africa’s commercial, industrial and retail property developments have, which significantly contributes to the economic and social development of the country as a whole,” says Reynolds.
Musgrave has announced all 24 Superquinn stores will change to SuperValu by February 2014
Musgrave has announced today that it will be changing the name of its Superquinn stores to SuperValu from February 2014. The move will mean the 24 Superquinn stores will become SuperValu over the next 18 months. 102 jobs at the Superquinn support office in Lucan will be lost due to the change. However, the 2,500 store staff will not be affected.
Musgrave says its decision creates an unrivalled national Irish retail brand, enabling more shoppers to access SuperValu’s offer, while incorporating the best of Superquinn. The company says it will invest €10 million to complete the refurbishment of the Superquinn store network. Chris Martin, Musgrave Group CEO, said: “Combining our SuperValu and Superquinn stores creates an unrivalled Irish retail brand, enabling shoppers to access SuperValu’s offer nationally, while incorporating the best of Superquinn. We understand that some customers will be sad to see the Superquinn name change. However, the decision follows a considered review of all options and is an inevitable next step given the realities of a totally changed grocery market and what the Irish consumer now needs.”
Martin said that Musgrave has invested €15 million over the last two years and it plans to introduce the SuperValu own-brand range into the Superquinn stores. The range consists of over 2,000 products. Martin said: “Shoppers will benefit from an improved in-store experience, better choice and value. Importantly, consumers will continue to enjoy all that they love from Superquinn’s heritage including its in-store ambience, great range, food experts and quality products such as the famous Superquinn sausage.
“SuperValu has grown by 30% over the last 10 years and achieves annual retail sales of just over €2 billion. With the addition of Superquinn, one in four Irish consumers will shop at the expanded network of 222 stores. In the coming months new ranges, store revamps and improved value will also be introduced. The conversion to SuperValu will be completed in February 2014 with all stores continuing to be owned and operated by Musgrave.”
Waltons Music is to open a 7,500sq ft superstore in the Blanchardstown Centre, creating about 10 jobs.
Discount retailer Dealz yesterday opened its 27th Irish shop, creating 24 jobs in the north Dublin suburb of Finglas.
Located in the Finglas Village Centre, the shop brings the number of jobs created by the firm in Ireland to more than 630.
Dealz offers a range of top brands and established own-label products, most at a price point of €1.49.
The retailer is a part of Poundland, which has more than 440 stores in the UK. Outlets include Portlaoise, Killarney, Letterkenny, Limerick, Athlone, Cork, Cavan and Monaghan.
Meanwhile, Waltons Music is to open a 7,500sq ft superstore in the Blanchardstown Centre, creating about 10 jobs. The store, to open on August 24th, will replace the outlet on Frederick Street in the city centre. It will carry a much larger range of products.
The Waltons shop on South Great George’s Street was the setting of the movie Once’s most famous scene where Glen Hansard and Marketa Irglova sing their Oscar-winning song Falling Slowly together. This store will remain open.
SEATTLE — Amazon’s grocery service might be making its way to New York next year, according to published reports.
Citing analysis from SunTrust analyst Robert Peck, EcommerceBytes.com reported that the Seattle-based online retailer may start offering Amazon Fresh in New York in 2014, based on his finding that the company had expanded into a New Jersey warehouse previously used by C&S Wholesale Grocers.
Amazon has been testing the service in Seattle for six years and recently rolled it out in Los Angeles. In June, The Seattle Times reported that Amazon would give members of its premium AmazonPrime service a 90-day trial of Prime Fresh, which includes the grocery-delivery service. After 90 days of paying the usual $79 annual fee, members would be offered the chance to upgrade to Prime Fresh for $299 per year.
Even if Peck’s analysis is correct, Amazon could find New York a somewhat more difficult place to gain a foothold than Seattle or Los Angeles. FreshDirect and Ahold USA’s Peapod largely dominate the online grocery market there. According to Bloomberg, when Peapod entered the New York market in 2011, it was already the largest online grocer in the country, while FreshDirect, which has been around for a decade, estimated it had about 80% of the market.
Location is another issue. As EcommerceBytes.com noted, the warehouse Amazon is buying is less than 50 miles away from New York and surrounding areas. By contrast, FreshDirect’s distribution centers are located within the city, and it’s building a greenhouse to grow its own produce in the Bronx. Meanwhile, Peapod benefits from the strong presence throughout the city of the Stop & Shop supermarket chain, also owned by Ahold USA.
Geant says UAE’s first online grocery store launched
French retail chain Géant has launched what it says is the UAE’s first online hypermarket.
It said Géant Online offered the opportunity to purchase both grocery items and consumer electronics via computer and mobile devices.
Géant Online becomes the latest addition to the company’s portfolio of brands in the UAE, which includes Géant Hypermarkets and Géant Easy supermarkets and convenient stores.
The online move is part of a growth strategy by Fucom, the master franchisee for Géant in the region, which aims to expand the brand across the GCC region over the next five years.
“This is the first time that a supermarket chain is offering customers the opportunity to buy grocery in addition to consumer electronics products in one easy to navigate website,” the retailer said in a statement.
Mohammad Ashfaq, group business head, Fucom, added: “Géant Online has been designed to meet a growing need by online shoppers and also to tap into the huge market for online shopping in the UAE, which boasts of the highest internet penetration rates in the region.
“Our move towards creating a virtual hypermarket was largely influenced by the fact there’s a young, tech savvy base of customers spending a significant amount of time online and that the e-commerce landscape is relatively new in this region.”
According to recent reports, the Middle East and North Africa region is one of the fastest growing markets in the world for e-commerce with sales in 2012 totaling $15bn, an increase of 45 percent.
It is estimated there are more than 72 million Internet users in the Middle East and North Africa region while the UAE accounts for the highest number of internet users who shop online in this region.
Internet retail sales are expected to grow by 95 percent in the UAE over the next five years.
Sajid Azmi, head of Ecommerce and digital marketing, Géant and Géant Online, said: “Online grocery shopping is a sector that is growing rapidly in many countries.
“Given Dubai’s position as a leading technology and shopping hub, and due to the increase in the internet and credit card usage in the UAE, we believe Dubai offers the ideal platform to start our online grocery business in this region.”
Géant has been operating in the region since 2001 when it opened its first hypermarket in Bahrain before launching hypermarkets in Dubai in 2005 and Kuwait in 2009.
Globally, Géant, which is owned by the Group Casino, has over 115 hypermarkets, and is the fifth largest hypermarket group in the world.