Monthly Archives: November 2013
HARDLY a month has gone by this year without construction starting on yet another new mall or a newly completed one opening its doors.
In fact, at least 25 new shopping centres, each one exceeding 30,000m² in size, are expected to be added to the market between 2013 and 2016, according to figures from the South African Council of Shopping Centres.
That will bring South Africa’s tally of large, regional and super-regional malls to an estimated 180 — more than double the number five years ago.
The largest mall opening of 2013 took place last week: Sasol Pension Fund, Retail Africa and Pivotal Property Fund’s 76,000m² Cradlestone Mall, just off the N14 Krugersdorp highway on the West Rand.
Other mega-malls expected to open in the next two to three years include JSE-listed Attacq’s massive 120,000m² Mall of Africa at Waterfall City near Midrand, Billion group’s Bay West (87,500m²) in Port Elizabeth and Forest Hill (68,000m²) in Pretoria, and Flanagan & Gerard and Intaprop’s Atlantic Mall (78,000m²) in Cape Town.
The continued addition of new, multimillion-rand shopping centres raises the question of the extent to which (if any) South Africa is overshopped.
In a recent report, Macquarie’s property and retail research team said: “South Africa seems overshopped in some areas and regions and on certain indicators, such as mall space per capita. Yet overall, on indicators such as vacancies, trading density growth, occupancy cost ratios and bad debts, it seems that the South African retail property sector is still in decent shape.”
However, Macquarie property analyst Leon Allison said given consumers’ weak financial position and a sluggish economic growth outlook, there was little doubt that investment returns on new centres would decline unless the pace of retail development slowed down.
Mr Allison said that a clear indication that new opportunities for growth in the local retail market were becoming scarcer, was an increasing trend among developers, retailers and listed property funds to grow their portfolios beyond South Africa’s borders. For instance, Growthpoint has expanded to Australia, Redefine to the UK, Germany, Switzerland and Australia and Resilient to eastern Europe and Nigeria, while Hyprop is building malls in Ghana and Zambia in a joint venture with Atterbury. The entry of more international retailers to South Africa could, however, help mop up the growing supply of retail space.
The head of listed property funds at Stanlib, Keillen Ndlovu, said the recent arrival of global fashion brands such as Zara, Cotton On, Gap, Burberry, Mango, Forever New, Steve Madden, Topshop, fast food outlet Burger King, had buoyed demand for retail space, especially in regional and super-regional malls.
He says foreign tenants may well continue to be a driver of new retail development as many of the dominant centres have limited or no space available to accommodate new entrants to the market.
Undertaking an extensive expansion programme while minimising the impact on an estimated 24 million visitors per annum is no small feat. In a R140 million upgrade to its Victoria Wharf Shopping Centre, the V&A Waterfront has managed to not only improve its retail trade performance over the nine month construction period, but also increase the number of visitors to the Centre over the same period.
Unveiled on 28 November, the completed expansion includes the reconfiguring of a section of the lower ground level for a new 6500m2 premium Pick n Pay, a pedestrian and vehicular tunnel under a major access road to create a super basement, and an innovative steel structure to hang from the roof trusses to create a link between two existing malls and double volume shop fronts.
Faced with growing demand for retail space and a long waiting list of local and international retailers, the Waterfront needed to innovatively accommodate the demand without increasing its actual footprint, all the while maintaining and limiting disruption to day-to-day trade. The solution was to densify within the current building envelope.
David Green, CEO of the V&A Waterfront said: “Our overall retail strategy has seen a great deal of attention given to refreshing the retail experience, and maximising on the interest expressed by new local and international retailers looking for space in Victoria Wharf.” He adds that this strategy is in place to ensure retail growth while enhancing the consumer experience: ‘’Development work in this case was necessary to increase the gross lettable area (GLA) and improve visitor access and overall convenience.’’
Retail sales performance from July to September is up by 19.5% over the same period last year, and visitor numbers to Victoria Wharf grew by 15.2%.
The GLA has increased by 7800m2 across the new Pick n Pay and the ‘’Cross Mall’’ link . Pick n Pay’s trading area has increased by 45% to 4,300m2, while the 1300m2 retail space created by the Cross Mall development will see the introduction of Witchery and Mimco by Woolworths, and Tom Tailor and Lucky Brand for Edgars as shop-in-shops. Suspended in ‘airspace’ above the existing delivery area, the ‘’Cross Mall’’ link introduces the double height shop front concept to the Victoria Wharf while retaining the design aesthetics of the existing centre. For the first time in its 20 year history, Victoria Wharf will trade on four levels.
The 2,950m2 space vacated by Pick n Pay will be reconfigured for South African brand Mr Price and international success story, Australian brand Cotton On. Both are expected to open in the second quarter of 2014, bringing an element of mass appeal and affordability.
The results from a recent economic impact study indicated that the V&A Waterfront has contributed approximately R198-billion to the national economy over the last ten years and new developments, which include the Victoria Wharf extension, could contribute a cumulative R188bn to nominal GDP by 2023.
‘’If the retail trade performance of 2013 is a yardstick, all indications are that this extensive development will bear fruit in the form of bumper festive season trade and continued growth into 2014,’’ concluded Green.
The evolution of UAE retail: From corner shops to mega malls
When Talal Al Dhiyebi was a child, the central souq in Abu Dhabi was the heart of retail in the capital.
Today he is an executive at Aldar, which built both the modern answer to the market on the same site and a mall that will become the country’s second biggest when it opens in March.
Mr Al Dhiyebi, like many others who were born and brought up in the Emirates, has witnessed many changes in the country since it was founded 42 years ago.
“Retail has developed a lot since I was a little boy,” he said.
“Generally [the central souq] was where everyone used to be before proper shopping malls existed. Most of the other retailers were predominantly street retail.”
Back in the early 1970s, the situation was much the same in Dubai, which had been a trading hub since 1894, when Sheikh Maktoum bin Hasher Al Maktoum, the ruler of Dubai at the time, exempted foreign traders from taxes.
But in 1981, some 20 years ahead of the capital, Dubai opened its first modern shopping mall, paving the way for the establishment of the emirate’s reputation as a retail hub.
“[Al Ghurair Mall] was quite a breakthrough project for the time and for many years it was the place to be,” said David Thurling, the vice president for Al Ghurair Malls.
“It was a logical evolution of the market seeing how shopping malls were developing and evolving overseas,” he added.
About a decade later another retail group was founded that would go on to be one of the largest in the country. Majid Al Futtaim opened its first property, Deira City Centre, in 1995. It was to be another pioneering addition to Dubai’s developing retail industry.
“[Mr Majid Al Futtaim] effectively brought a model that integrated shopping and entertainment in a single building, so it was quite pioneering at the time,” said George Kostas, the chief executive of Majid Al Futtaim Properties.
Mr Al Futtaim went on to sign up brands including Carrefour and open a string of malls across the Emirates, starting with city centre malls in Ajman and Sharjah before embarking on the company’s most significant project yet, Mall of the Emirates.
“In our view it was going to be the biggest and the best, the iconic [property], the one that includes all of the experiences. He had a view about where Dubai was growing and how quickly it would grow,” said Mr Kostas.
“I think people looked at him saying, ‘You’re mad, you’re crazy. It’s not going to work. You are out in the middle of nowhere – who is going to come there?’ but we opened and the rest, as they say, is history. He was proven right.”
And before long, malls were springing up all over Dubai.
“Essentially what happened was that the retailers and the mall owners found with the increased numbers of shopping centres and retail outlets, the sales didn’t suffer. They grew in each shopping centre regardless of the fact that there were more shopping centres,” said David Macadam, the chief executive and vice chairman for the Middle East and North Africa region of the International Council of Shopping Centres and the Middle East Council of Shopping Centres.
Then came Dubai Mall, the world’s biggest shopping centre, which opened amid the dark days of the global financial crisis but has gone on to be a resounding success.
“Today, the world’s most visited shopping and lifestyle destination, having welcomed more than 65 million visitors last year, and more than 55 million visitors in the first nine months of this year, The Dubai Mall already accounting for nearly 50 per cent of all luxury goods purchased in Dubai,” said a spokesman for the mall’s developer, Emaar Properties.
Argos unveils revamped store as part push into a brave new digital world
Argos store in Old Street, east London, is part boss John Walden’s five-year plan to secure the firm’s future by turning it into a ‘digital retail leader’.
Argos is banking on voice-activated computer systems, iPads, free Wi-Fi and digital screens flashing up adverts to drag its traditional catalogue shops into the digital age.
The retailer, which hopes to open six trial digital stores before Christmas, on Tuesday showed off its first in Old Street, east London. Three more are due to open in the capital as well as one in Colchester and one in Dunfermline, Scotland.
The famous laminated catalogues are going, along with the tiny pencils and slips of paper, in a bid to make service faster and give the stores a cleaner, more modern look.
John Walden, its chief executive, said that, despite the rapid growth of online retailing, brick and mortar stores were still an important part of Argos’s future as shoppers wanted somewhere convenient to collect goods rather than having to wait at home for a delivery. “Collection in stores is growing faster than home delivery and we are in a great position to make that available,” he said.
Walden has embarked on a five-year plan to secure the firm’s future by turning it what he called a “digital retail leader”. He added that he could close as many as 50 of its 740 stores and move another 15 to different premises, but insisted the chain would continue to be important, with 90% of sales involving stores in some way and half of all purchases starting on the high street.
Walden said retailers were competing to deliver “more products, faster and cheaper”, and so trials are also underway to offer a broader range in Argos’s smaller stores on the same or next day by using the warehouses in the back of 120 large shops as depots. Stores at present stock an average of 12,000 products, or 20,000 in large stores, and it can take three to five days to deliver items which are out of stock at smaller stores.
The revamped Old Street store, just a stone’s throw from the digital developers’ heartland known as Silicon Roundabout, is the latest stage in Walden’s plan. It and the other trial stores, which have displays of products on pedestals and in cabinets, are intended to appeal to shoppers of all incomes. Staff will be equipped with iPads to give them access to product and service information and enable them to help the less tech-savvy customer. They will also note what people choose not to buy. In future, Argos is looking at enabling customers to pay via the iPads as well.
The old-school collection counter and queueing system has been ditched. Instead, shoppers order goods via an iPad kiosk, choose a memorable word to distinguish their order, then till staff use that word to call up the order, allowing shoppers to pay for goods and receive them at the same time.
A fast track service promises to retrieve a product ordered online within 60 seconds of a customer walking into a store.
Retrieving goods should be quicker overall as a result of changes behind the scenes, where warehouse staff use head-sets to access voice-activated technology. The system directs them to whether they should be filling shelves with new products or picking items to send to the shop floor, prioritising delivery when the shop is busy.
Analysts said the changes were overdue but questioned how many stores would get expensive digital screens and other technologies in the near future.
“There are so many stores that are really out of date and look like they are stuck in a 1990s way of shopping,” said Matt Rubin, a retail analyst at Verdict. He added that there would be a “learning curve” for Argos in how many of the new ideas would work, particularly the lack of queueing system.
“Argos is such an institution that everyone knows what they are doing. The company will have to learn a lot about how they can introduce a new way of doing things,” he said.
All looked ready to go in Old Street but Walden said it was not certain that the store would open before Christmas because further tests of the technology were required.
Tiffany & Co. (TIF) posted third-quarter profit that topped analysts’ estimates and boosted its annual earnings forecast as the rising U.S. stock market gave wealthy consumers the confidence to snap up higher-priced merchandise.
Net income in the quarter ended Oct. 31 rose 50 percent to $94.6 million, or 73 cents a share, from $63.2 million, or 49 cents, a year earlier, the New York-based company said today in a statement. Analysts projected 58 cents, the average of 21 estimates compiled by Bloomberg. The shares posted their biggest gain
Milton Pedraza, founder & CEO at The Luxury Institute, weighs the possibility of a combination of Men’s Wearhouse and Jos. A. Bank and discusses the profit beat at Tiffany as the luxury jeweler benefitted from higher prices. He speaks on Bloomberg Television’s “In The Loop.”
Tiffany, the world’s second-largest luxury jewelry retailer, is benefiting from surging stock prices and rising home values that are bolstering affluent shoppers’ willingness to purchase discretionary goods such as jewelry and accessories. The company also was helped by price increases and falling precious metal costs.
“On the bottom-line earnings number, they blew it out,” Brian Yarbrough, an analyst at Edward Jones & Co. in St. Louis, said in a phone interview.
He recommends holding the stock.
Tiffany shares rose 8.7 percent to $88.02 at the close in New York, their biggest jump since August 2011. They have gained 54 percent this year, compared with a 26 percent advance for the Standard & Poor’s 500 Index. The index hit a record last week, capping its seventh straight weekly gain and leaving it poised for the best annual gain since 1998.
Profit per share excluding some items will be $3.65 to $3.75 in the year ending Jan. 31, up from a previous forecast of $3.50 to $3.60 a share, Tiffany said. Analysts estimated $3.62, on average.
The higher prices and lower product costs widened Tiffany’s gross margin, or the percentage of sales left after subtracting the cost of the goods, to 57 percent from 54.4 percent a year earlier. Analysts estimated 55.1 percent, on average.
Revenue rose 6.9 percent to $911.5 million, topping analysts’ $889.1 million projection. In the Americas, sales at stores open at least a year rose 1 percent, bolstered by growth at the Fifth Avenue store. Asia-Pacific comparable sales gained 22 percent.
Tiffany said shoppers were drawn by its expanded fashion jewelry designs, including the Atlas collection featuring Roman numerals, as well as continued growth in fine and statement jewelry, with particular strength in its yellow diamond collection.
UAE-based conglomerate Al Futtaim Group has announced the official opening of its Cairo Festival City Mall project.
Cairo Festival City is a 3 million sq m development by Al-Futtaim Group Real Estate (AFGRE), a unit of Al-Futtaim Group.
Al-Futtaim vice chairman Omar Al Futtaim said that when fully complete the mall will offer more than 300 retail stores and 95 restaurants and cafes.
The opening was hailed as a landmark occasion for Egypt and as a reference point that foreign investor confidence in Egypt’s potential “remains as strong as ever” despite recent unrest.
“Retail is a key component of Egypt’s economy and the opening of Cairo Festival City Mall is a tangible proof that foreign investors’ confidence in the prospects of Cairo’s revival is unwavering,” said Al-Futtaim. “Especially GCC investor sentiment towards Egypt is very strong,” he added.
Dr Sultan Ahmed Al Jabber, UAE Minister of State who was also at the official opening, added: “On this occasion, I would like to congratulate Al Futtaim Group and the Egyptian community for the opening of this integrated centre which is a distinct model of urban developments and trade, as it reflects the big investment opportunities in the Egyptian market, and the quality of the UAE’s business community.
“We look for more Gulf projects which contribute in improving the economic growth, and realise the benefit and interest for all parties, through upgrading the level of available services, as well as providing more opportunities for manpower.”
The Minister said that the opening of Cairo Festival City Mall was a testament to GCC investors’ interest in general, and UAE in particular, in the Egyptian market.
Lefties, owned by Spanish parent company Inditex, once stated out as an outlet store for left over stock from Zara, now appears to be in the process of reinventing its brand image. Although Lefties first began selling last season Zara stock, hence the name origin from the phrase ‘left over,’ little by little the name began building up recognition and eventually developed its own separate men’s, women’s and children’s wear lines. At first the brand was mainly known for its ‘low budget’ clothing and simple store style, but recently Lefties rolled out a new store concept, which strongly echoes Zara’s new store design filled with clean lines and minimalistic interior. One of the first Lefties store to feature this new, clean concept opened in September this year, in shopping center Marineda City, in A Coruña.
The store logo was also renovated, to bear the name Lefties in simple black and white font, a theme encompassed throught the store. Planet Retail, global retail analyst firm, recently wrote a news report which stated, “lefties becomes a fully fledged brand,” and details the changes Inditex has been implanting into the brand image over the past few months, such as its new store concept, adjustments to the collection and the launch of its online page. Lefties launched its first online page this week, which was previously under construction.
According to Spanish newspaper Modaes, the new online page and product photos “show a style more consistent with [Inditex’s] other brands.” When visiting the online page, visitors are shown a Christmas slide show of the brands festive collection, modeled by young men, women and children. Certain pieces for women bear strong resemblance to Zara’s winter line for women and Trf. For example, a furry winter coat modeled on Lefties welcoming page bears strong resemblance to one found on Zara’s Trf section of its site. Although there is still a difference between styling, it can be noted that product design for Lefties now follows a similar vein of Zara and Bershka.
Speculation has been mounting that the introducement of the new store concept and brand image are signals that Inditex is getting ready to relaunch the brand as a value chain to compete against the growing threat of value chains, like Primark, in Spain. Some sources indicate that Inditex is currently testing Lefties in the lower end of the retail market to see if the brand gains momentum in the near future. Primark already has a growing number of stores in Spain and shows little sign of slowing down. Inditex registered the brand name ‘Anxeri’ in March 2011, at the time it was believed that Inditex would open a new chain for accessories and shoes, but now some sources think it could be a new name for Lefties, according to Spanish magazine Expansión.
So far Inditex has neither denied or confirmed rumors surrounding Lefties. Internal sources in the company have revealed that Inditex was planning on “renewing the image of Lefties,” but also mentioned that brand reinvention was “very common” and currently there were no plans to launch a “new low-cost chain,” according to Retail Detail.
Lefties was founded back in 1993 and since then has expand to operate over 104 stores throughout Spain and Portugal. Lefties has established is own center of logistics and management in Barcelona, separate from its sister brand Zara and seems ready to continue growing on its own.
Cairo Festival City Mall, a 168,000-square metre shopping centre, is set to finally open its doors for the first time today as a wave of new super malls is expected to hit the troubled Egyptian market.
The long awaited mall, developed by Al-Futtaim Group Real Estate Egypt, part of the Dubai-based Al-Futtaim Group, had originally been scheduled to open by the end of 2010, but was delayed by a land dispute and political instability.
A company spokesman said that 80 per cent of the available space had been leased, although the number of stores expected to open today is likely to be far fewer.
The mall includes Egypt’s first Ikea store, a 10,755-square metre Carrefour hypermarket, the region’s largest Kidzania education and entertainment centre, the country’s largest Marks & Spencer store, and more than 300 other stores and 95 restaurants.
Located on the east side of the ring road in Greater Cairo, Al-Futtaim said it had a catchment area of more than 8 million potential customers.
“This week sees the culmination of years of planning and hard work,” said Mohammed ElMikawi, the managing director of Al-Futtaim Group Real Estate Egypt. “Cairo Festival City Mall’s full offering will come online by next April.”
Cairo Festival City is the first of a wave of new shopping centres being built in the Greater Cairo area despite the ongoing political unrest.
Another 389,000 sq metres of lettable shopping space is set to join the market next year – a space slightly larger than that of The Dubai Mall, the world’s largest shopping centre – figures published yesterday by the property broker Colliers International show.
Moreover, that number is set to increase by another 250,000 sq metres in 2015 as projects – such as Majid Al Futtaim (MAF) Properties’ 162,500-square metre Mall of Egypt and an extension to the Mall of Arabia, Egypt’s current largest shopping centre – come on stream. Local property brokers estimate that 70 per cent of MAF’s project has already been leased.
According to Colliers, there is a further 850,000 sq metres of shopping space – double the size of The Dubai Mall – in Cairo, which is currently on hold.
Stuart Gissing, a regional director of Colliers International, said Cairo’s retail market had been surprisingly stable despite the political unrest.
“Some sectors, such as high street fashion, are actually seeing an increase in demand,” he said. “We are seeing that some retailers already in Egypt are definitely interested in occupying more space.
“However, new entrants into the Egyptian market are waiting to see what happens in the market before they commit.
“Developers, too, are split between those pressing ahead despite the political unrest and those taking a position and waiting.”
Cairo Festival City Mall is set to form the centrepiece of Cairo Festival City, a 3-million sq metre neighbourhood of housing, offices, hotels and schools in New Cairo.
Value supermarket Iceland Foods has acquired seven Iceland stores in the Republic of Ireland for an undisclosed sum, as the retailer accelerates its international expansion.
Iceland Chairman and Chief Executive Malcolm Walker said the retailer sees great opportunities for growth in Ireland and said taking direct control of these stores will help it to ensure that it offers the best value and the highest standards of service.
The stores, located in Ballyfermot, Finglas, Navan Road, Ilac Centre, Coolock, Clonmel and Carlow were previously operated by its franchisee AIM Group, and will offer the opportunity for its staff to transfer to Iceland.
Walker added: “It will also help us to accelerate the expansion of the business, creating new Irish jobs, more opportunities for Irish suppliers and making our unique branded products available to more people throughout the country.”
Technocorp Holding Ltd, a Swatch Group company, said on Monday it is increasing its stake in Dubai-based company Rivoli Investments.
In a statement, it said it was purchasing a tranche of shares and would be taking control of Rivoli Investments, without specifying how big a stake it now held.
Swatch Group previously held a 40 percent equity interest in Rivoli Investments, which operates a network of over 360 retail businesses in the Middle East, predominantly active in the watch segment.
The company has a workforce of over 1,500 employees.
Rivoli shops have for a long time offered Swatch Group watch brands for sale in this region.
In October, it was reported that the private equity arm of Dubai Holding, which is owned by the emirate’s ruler, was planning to sell its minority stake in Rivoli.
The unit, Dubai International Capital (DIC), was said to be in exclusive negotiations to sell its 18 percent stake in Rivoli Group to Saudi-based Al Rajhi Capital, the investment banking and private equity arm of the kingdom’s top listed lender, Al Rajhi Bank.
The Swiss company said in July that it expects a strong second-half after profit rose 6.1 percent to 768 million Swiss francs in the first six months.
The company is expanding in markets outside Asia such as the US.
The former CEO of Hermès is set to receive a reported USD 1 million dollars a year as part of a ten year non-competition contract, according to fashionunited.co.uk.
Patrick Thomas – who will be succeeded by Axel Dumas early next year – signed the contract this week and is set to receive EUR 966,300 each year for the next four years to 2017.
Thomas joined the French luxury firm in 1989 as group managing director before becoming CEO in 2004.
Earlier this month, Hermès recorded a third quarter sales growth of 12.9 per cent with a turnover of EUR 2,662 million – up 13.9 per cent.
The Swedish group said the medium-term home furnishing market looked bright as housing sales and consumer confidence improve. A spokesman said: “The economy looks like it’s picking up and we have every hope that will continue.”
It has overhauled its ranges – including a £4million makeover of its living room and children’s departments nationwide – to offset uncertainty about the economic recovery. UK retail boss Gillian Drakeford said: “This gives us the opportunity to double turnover and total market share by 2020.”
Outdoor furniture sales bounced 58 per cent helped by a warm summer and a decision to sell ranges all year round.
It plans an £8million revamp of its kitchen ranges and aims to offer solar panels in all 18 UK shops by the end of the year through a partnership.
Online sales rose 29 per cent against a year ago after Ikea lifted the number of products on the web to 7,500, out of a total of 9,500.
Morrisons has announced that its online delivery service will begin delivering groceries on 10th January 2014.
Morrisons said its new online service will focus on freshness, with the website giving customers an indication of how good the food is via a rosette rating, representing the “quality of the product available for sale including the seasonality of the product.”
The retailer said customers will also be able to see the shelf life of products so they can be reassured that the person who picks the basket isn’t choosing the food nearing the end of its shelf life.
Morrisons said that if customers were not happy with the freshness of its food, Morrisons will take it back and no payment for the item would be taken. It said a voucher to the same value would also be sent to customers within 24 hours.
The retailer said pricing and promotions will be the same as in Morrisons stores, with delivery charges of £1, £3 or £5 depending on times (peak, off-peak or standard).
Morrisons chief executive Dalton Philips said the first orders can be placed from January 10 in the Warwickshire area, close to the Dordon distribution centre.
He said: “Our competitors have been online for some time and we are quite late to the party but I’m confident we can make quite an entrance.”
Value fashion retailer, Mr Price has taken its homeware division, Mr Price Home online. Mr Price Apparel launched its online sales platform in South Africa in July 2012 and internationally in July 2013.
The group noted in its recent results presentation that it hoped to launch online businesses for Mr Price Home, Sheet Street and Mr Price Sport, within the next six months.
While apparel accounts for 55% of total group turnover, homeware accounts for 20% of turnover.
Delivery starts at R15, going up to R500 for furniture items above R10,000.
“Once implemented, the group will be the first retailer in South Africa to offer a universal basket – the ability to shop online at the various trading divisions and check out as a single transaction,” the group said.
“The online sales platform will represent a strong growth opportunity globally and will allow a cost effective test of foreign markets,” said CEO Stuart Bird in announcing the group’s results last week.2013 Copyright, BusinessTech. All right reserved
Msheireb Downtown Doha, the flagship project of Msheireb Properties, will feature extensive retail outlets including a mall, its CEO said on Sunday.
The Galleria will comprise approximately 100 stores set across four levels of shopping and entertainment space.
Spanning approximately 48,000 square metres of gross leasable space, the Galleria will comprise an anchor supermarket on the lower ground floor, and a six screen cinema.
Sikkat Al Wadi, the development’s largest pedestrian street, running the entire length of Downtown Doha will also provide a wide range of shopping options, including flagship stores in addition to fashion boutiques, restaurants, and cafes, a statement said.
Abdulla Hassan Al-Mehshadi, CEO at Msheireb Properties, said: “What sets the project’s retail offering apart from traditional malls is that it will integrate well-known international brands with smaller local brands or boutiques which will provide an authentic town centre atmosphere whilst keeping alive unique Qatari characteristics, traditions and heritage.
“In this way we hope to offer a more personal and appealing shopping experience than the massive shopping malls that are everywhere across the Gulf.”
The development will also host the region’s largest shaded open-air square, Al Baraha – a family destination with restaurants and cafes featuring events and large scale shows, he added.
Msheireb broke ground on the $5.5bn Downtown Doha project in 2010, with development set to be completed in four phases. Phase two of the project was awarded last year to Dubai builder Arabtec, while phase one went to Brookfield Multiplex Medgulf.
When complete in 2016, the 31-hectare site will include more than 100 buildings offering housing, workspace, cultural and community facilities, while preserving key heritage buildings.
Ever wonder where Starbucks got its name? How about Google or Yahoo?
It’s not something we think about often, but the names of many major companies that now seem familiar are often made up, seemingly unrelated, and quite quirky. After all, why would you call a cell phone company BlackBerry? What does IKEA have to do with home goods and furniture?
India doesn’t have enough malls to open shops: Marco Bizzari, CEO, Bottega Veneta
Marco Bizzari, president and chief executive of Bottega Veneta, has no plans to expand the Italian fashion brand’s retail presence in India unless there is good infrastructure and more shopping malls. He is, however, optimistic about the Indian luxury market and plans a joint venture with its franchisee Genesis Luxury in the long run, Bizzari told ET’s Vijaya Rathore in an interview. Edited excerpts:
How has Indian market responded to Bottega Veneta so far?
The business in India is growing fast…in double digits. Of course, the size of the business compared to other markets is small. It’s just a matter of time that the obstacles – including lack of infrastructure – which are between the customers and the brand, are removed. It is a promising market as we know that Indians are really enjoying the brand in other countries as well. So I see a lot of opportunities in this market to grow.
What are the issues you face in India and how are you tackling them?
There are issues like high import duties and problems related to distribution. India does not have enough shopping malls to open shops. And if you open shops in a hotel, by definition the size is too small. So, the only way we could do our job properly here is to provide great customer service. We do everything in India that we do for our shops worldwide.
Are you considering having a joint venture with your master franchisee, Genesis Luxury?
It’s always under consideration. But I feel that the company, in a way, is still young and there are so many other markets that require attention. Besides that, the partner here is doing a good job, so why make any change? I am sure a joint venture is going to happen in the future, but at the moment we do not have any issue as the brand is properly represented here.
What is your retail expansion plan here?
At the moment, we have six shops and we need to build on them. We do not have any particular plan to open new shops unless we see opportunities.
Luxury brands have not started experiencing huge volumes in India yet. Why?
I will go back to the point of finding the right opportunity to open stores. Unless there is good infrastructure and new malls, it’s impossible to open shops. If you compare India to China, there is a huge gap. In China, there are a huge number of new malls. It’s huge. So, the point is that aggressive growth can come only when there is supporting infrastructure.
How important is India in your global scheme of things? Is this market discussed in your board meetings?
It’s always discussed. Even if I come here once a year, we follow India continuously. We know that the customer is here. It’s just about the matter of finding the right time to express ourselves completely as we do in other countries.
Is there anything special about the Indian consumer?
There is a tendency of people of not going to the shops – maybe because of the traffic. So, the tendency to indulge in personal shopping at home is much more in India than in any other market. As a brand that is like offering the best service possible by sending your person to the customers’ homes in their comfort zone and presenting the products of their liking. The customers here expect that and we are happy with that. To me, it’s the future of luxury.
Is there any other market identical to India in this regard?
No, not to this extent.
H&M is traversing Mexico in search for possible store locations following the opening of its 50,000-square-foot store in Guadalajara this month.
Despite H&M insisting that they have yet to settle on a store location, members of the Mexican press are speculating that its next store could be in San Luis Potosí in central Mexico or the Cancun beach resort.
The Swedish fashion retailer is currently readying for the inauguration of its third Mexican store – a 27,600-square-foot in Querétaro – and is keen to make Mexico its Latin American launch pad.
“We are considering several locations, but key cities like Cancún, Monterrey, San Luis, Veracruz, Leon or Villahermosa are not out of the question,” a company spokesman said.
Latin America, and in particular Mexico, is growing to become a lucrative fashion destination and retailers are fighting for coveted retail space. The Antea mall – the location of H&M’s Querétaro store – has seen Gap and Spanish fashion chain Sfera set up shops there recently.
According to a CNNxpansión article quoting CEO Karl-Johan Persson, H&M has made a reported USD 12 million in the first quarter. Persson also revealed that expansion in Brazil, Peru and Colombia could be on the cards.
The H&M spokesman also hinted towards a Mexican designer-inspired clothing line in the coming months, despite remaining coy on the details.
“We don’t discard a collaboration with a Mexican designer, but right now we are mostly focused on our new openings,” he said.
Edcon plans move into Ghana, Nigeria next year
Edcon CEO Jürgen Schreiber
THE owner of Edgars and Jet, Edcon, will open stores in Ghana and Nigeria next year, CE Jürgen Schreiber said on Thursday.
As the world’s second-fastest growing region, the continent’s booming economies have caught the eye of retailers in search of higher yield and untapped consumer spending potential.
Edcon continues to use discount fashion brand Jet as a beachhead to move into new African markets.
The budget-conscious offerings of Mr Price and Pep are proving to be increasingly appealing to an emerging middle class, which is still price-sensitive.
Woolworths, which targets a more affluent customer has decided to exit the Nigerian market as operating in the West African country failed to provide the right level of return.
Trading in African countries is not risk-free and exorbitant rental costs, corruption, bureaucracy and supply chain issues pose as challenges.
“This (Africa) remains an exciting opportunity going forward. We normally go into a new country with Jet. In Zambia though, we went in with Edgars too — it’s working well. In the second half of next year, we’ll go into Ghana with both Edgars and Jet, because the market is quite strong. In Nigeria we’ll take a discount approach and not an Edgars one at this point,” Mr Schreiber said.
Outside of South Africa, Edcon operates 154 stores across Botswana, Namibia, Lesotho, Swaziland, Zambia and Zimbabwe.
Edcon, which is South Africa’s largest clothing retailer, reported 5.9% increase in retail sales to R6bn for the three-month period ended September 28.
Same-store sales increased 1.2%, mainly as a result of strong cash sales of 17.4% and despite the disruption caused by the refurbishment initiatives in the Edgars’ division and credit sales for the group reducing by 4.3%. An improvement was seen in the company’s discount division, which includes Jet and Legit, on the back of a strong performance in ladies and menswear.
The 72-store refurbishment programme of its core Edgars chain is near completion, Mr Schreiber said. Edcon, which has underperformed its peers and lost market share since its highly leveraged private equity buyout in 2007 by Bain Capital, has also put in place strategic initiatives which include improved sourcing, beefed-up merchandising teams and the addition of international brands such as Dune, Lucky Brand and TM Lewin to attract footfall.
Edcon’s net loss narrowed to R724m in the period compared with a restated R2.7bn a year earlier.
Due to the weak credit environment, Edcon ended the period with 100,000 fewer customers able to access credit.
On a 12-month rolling basis, credit sales decreased from 51.4% in the prior comparative period to 49% of total retail sales. The slowdown in unsecured lending, which gave South African retail sales a significant lift prior to last year, has been one of the major contributors to the decline in spending, as local consumers who are feeling pressure from soaring utility costs, also battle to repay loans and settle accounts.
Foschini Group, which sells about 60% on credit, in November noted that it had seen strong growth in cash sales over the last six months.
The Edgars’ division grew retail sales 3.4%, and same-store sales were 1.6% lower, affected by disruptions from transformation initiatives.
The Edgars revival project has cost R443m so far.
The Discount division saw sales increased 10.3% and same store sales were 5.4% higher. Sales from its Africa division contributed 11.4%.
Edcon expects to spend R1.2bn on capital expenditure in the 52-week period ending March 29 2014.
Dubai real estate giant Emaar Properties may consider spinning off its retail business into a separate entity, chairman Mohamed Alabbar said in an interview with Bloomberg Television.
The company, which built the world’s tallest tower Burj Khalifa, currently counts Dubai Mall and Dubai Marina Mall among its retail assets. It has increasingly relied on revenue streams from its retail and hospitality units in the wake of the emirate’s property bubble bursting in 2009, which led to real estate prices slumping by up to 60 percent.
“These units are doing extremely well. We probably in the future will have to look at it again and see if we should entertain that and what that would bring in value to our shareholders,” Alabbar was quoted as saying. “I haven’t taken any decision yet.”
He added that he had previously considered spinning off the retail business, and that he expected recurring revenues derived from the leasing of malls and hotels to hit $1bn next year.
In the first nine months of this year Emaar posted a net profit of $493m, up 13 percent from the same period a year ago.
Revenue from January to September rose 36 percent to over $2bn, with 44 percent of this contributed by its retail and hospitality divisions.
New Delhi, Nov.20 (ANI): Famed coffee retailer Starbucks will soon open its first outlet in Bangalore.
Starbucks, which has joint venture with Tata Global Beverages, parent of Tata Coffee will open its outlet in Bangalore on November 22.
Addressing mediapersons here on Wednesday, Group President, Starbucks Coffee China and Asia Pacific John Culver said: “I think we are very proud that we have now operated in India for over a year, we have nearly thirty stores, and we are in the process of opening up in Bangalore on Friday, and we are very excited in the way in which Indian consumers have embraced Starbucks.”
Culver also said that the business had exceeded expectations and the company would continue to invest in India.
“As I said business here has exceeded our expectations and through our partnership with TATA we have been able to navigate the complexities of doing business here in India and we are very pleased with the partnership and we are going to continue to make investments here and do business the right way,” said Culver.
Starbucks opened its first flagship store in Mumbai in 2012. The coffee retailer now runs stores in Mumbai, New Delhi and Pune.
Keeping in mind the glorious history and rich culture of the city, the store would brew coffee and serve a variety of snacks of international standards to crunch and munch while not missing out on the pulse of the Indian palate.
Starbucks had opened its store in New Delhi on February 6, 2012.
Reportedly, the brand aims to have 50 outlets through a tie-up with the Tata group, the country’s biggest manufacturing and trading conglomerate.
The Seattle-based chain of Starbucks, known much for the trendy urban lifestyle, it represents as its costly cups of coffee, enters a market with a fast-growing middle class and plenty of competition in the small but fast-growing coffee segment.
Starbucks Corp had initially planned to have its first cafes in India open by mid-2011 but was delayed by difficulties in acquiring real estate and high land costs-a common problem for chain stores in a country where more than 90 percent of retail is conducted at one-off mom-and-pop shops.
While the tie-up has taken advantage of the Tata group’s sprawling presence by opening cafes in hotels owned by the Tata group and its allied retail outlets, it is also looking at other locations such as malls, railway stations, airports and offices. (ANI)
The Shoprite Group has once again been honoured in the recently announced 2013 The Times / Sowetan Retail Awards with its flagship brand, Shoprite, achieving the Grand Prix award as top retailer overall for the fifth consecutive year. Several of the other brands in the Group also took top-ranking positions throughout various categories based on consumer feedback in the survey conducted by independent research agency TNS.
The Shoprite supermarket chain also claimed the award for providing the best Overall Customer Experience in the Supermarket & Hypermarket category and took third position in the category for Household Appliances, up one place from 2012. In the specialist furniture store category House & Home, previously in 9th position, took a giant leap into third spot in 2013.
Shoprite Checkers marketing director Neil Schreuder expressed his delight and said that Shoprite believes in keeping things simple and being honest and transparent with its customers. “The Shoprite brand’s positioning is built on its commitment to “lower prices that you can trust always”. Shoprite is the low price champion and low price leadership is its strategic point of differentiation. It aims to ensure that South Africans from all walks of life can afford to have their food needs met regardless of their income level. Grocery shoppers literally interact with the brand every week and consumers can feel the difference at the till when buying their weekly groceries.
London commuters will be able to pick up their grocery shopping at London Underground stations under plans being drawn up by Asda.
The supermarket group has reached a deal with Transport for London to open click-and-collect points in the car park at six London Underground stations.
The move by Asda is part of a plan to open 1,000 click-and-collect points over the next five years, with a particular focus on London and the south east.
The click-and-collect points will be at East Finchley, Harrow and Wealdstone, High Barnet, Highgate, Stanmore and Epping.
They will allow shoppers who order their food online before noon to collect their grocery shopping from the station after 4pm.
Mark Ibbotson, Asda’s retail director, said: “Customers in the south east tell us that they want the prices and quality provided by Asda value but they can’t access it easily. This tie-up with TfL solves that.
“We’ve led the way in click-and-collect by bringing Asda to where customers are rather than expecting them to come to us. From park and ride locations to business parks, now London Underground station car parks are another significant step on that journey.
“We believe customers will value the convenience of collecting shopping at their home tube station rather than carrying the products bought in premium convenience stores on their commute home.”
Another luxury brand has opened a boutique in Abu Dhabi, joining a growing list of premium labels setting up shop in the capital.
Berluti, a Paris-based shoe brand owned by LVMH, has opened a boutique in The Galleria, two weeks after the Italian company Momodesign opened its first store outside its home market in the same centre.
“A lot of our local customers who have been purchasing Berluti in our stores throughout the world have been asking for [an Abu Dhabi boutique] for quite a while,” said Steven Newey, Berluti’s general manager for Europe and the Middle East.
“Besides, Abu Dhabi has become a very key destination for the Middle East and also worldwide, so we decided to open a boutique here as well like we have in other parts of the region.”
The brand also operates boutiques in Dubai, Kuwait and Qatar and makes products tailored for its Middle East customers, who make up 25 to 30 per cent of Berluti’s clients. Its latest branch features the brand’s full range, including leather goods and a ready to wear clothing range.
“In the Middle East one of the favourite pieces they love are our sandals. We do a very traditional sandal which we do exclusively for the markets here within the Middle East. This is something they come back to us time and time again for, season after season,” said Mr Newey.
“We do sell sandals in our other stores but we also design specifically for the Middle East market … with a certain sized heel which they wear with their local dress,” he added.
A recent report by Euromonitor International revealed that luxury goods sales are on the rise, driven mainly by the strength of emerging economies.
Retail growth is set to surpass last year’s figure, exceeding US$318 billion worldwide, which represents a year-on-year rise of more than 3 per cent.
The majority of the growth comes from emerging markets such as China, India, Indonesia and Malaysia, according to Euromonitor.
Hollister reveals new store concept
Tuesday, 19 November 2013 Abercrombie & Fitch, owners and operators of Hollister Co., are introducing new changes to the existing store concept for Hollister. This announcement comes after the parent company reported its total sales for the third quarter had declined 12 percent from 1.17 billion US dollars, to 1.03 billion US dollars and the impending closure of all Gilly Hicks stores by 2014.
During aweb cast discussion with analysts on the 6th of November, Craig Brommers, senior vice president of Marketing, introduced a new store concept for Hollister stores in the US. The new store concept features large store front windows and a smaller interior, which will showcase a video wall designed to display more in-store content, similar to the store concept used in Europe.
The new store concept for Hollister shops will offer more selling space, due to reconstruction reductions in the store stock-room and other non-selling spaces. It is designed to look more like a traditional mall store with big store windows, so customers can look inside and see the items displayed, according to Bizjournals. The new store exterior design is simple, without the traditional Californian beach hut vibe and green front porch outside the store entrance.
A&F introduces Hollister store concept that is wheelchair accessible
However Abercrombie & Fitch failed to pass on this information with their court appeal, which requested that the District Court suspend the injunction to make all Hollister stores in US accessible to wheelchair bound customers.
The current store concept for Hollister Co. stores was designed and constructed after the ADA Amendments Act of 2008 was passed. The store concept included a porch outside the shop entrance with small steps, which was designed to make customers feel like they were entering a surf hut and reinforce the Hollister brand image.
On the 20th of August 2013, US district court Judge Wiley Y. Daniel ordered Abercrombie & Fitch to make 231 nation wide Hollister stores wheelchair accessible. Then on the 9th of September Abercrombie & Fitch filed an appeal and a separate motion to suspend the injection, arguing that the ruling would require entrances to be “torn out and reconstructed, resulting in lost sales and customer goodwill.”
However this week the ruling Judge Daniel denied their appeal and ordered that Abercrombie & Fitch remodel 77 Hollister store entrances per year, as it did not see any viable cause for Abercrombie & Fitch to delay making its Hollister stores wheelchair accessible, according to michaelhingson.com. Brommers did not mention when tests for the new store concept would occur or when a foreseeable rollout of the new store model would occur, but with the new court order in place it will most likely occur sooner than later.
Hollister Co. was founded in 2000 by parent company Abercrombie & Fitch. The brand image was created around the laid back southern Californian lifestyle and now is present in over 20 countries worldwide.
Tie Rack is to begin closing its 44 UK stores, threatening the loss of up to 200 jobs.
The closures mark the end of the neckwear specialist’s tricky 30-year existence. It has been in gradual retreat since its 90s heyday, when it had 450 shops, as men’s fashion has changed and competition has intensified. The chain was launched in the 80s, when most men working in offices and attending special events wore ties. But open necked shirts are now so normal that even the prime minister is often pictured tieless. In recent years just a fifth of the chain’s sales have been men’s ties.
All of Tie Rack’s high street stores will close, while some of its handful of outlets in airports will also be shut down.
A spokesman said: “Following a period of prolonged decline in Tie Rack’s fortunes, it is with regret that we today announce this closing down sale. Management are working with staff to provide support during this difficult time.”
The closing-down sale is expected to begin on Wednesday, with UK shops due to shut their doors for good by the end of the year.
The closures follow the collapse into administration of film and games rental chain Blockbuster and shoe retailer Barratts in recent weeks which have put about 2,000 jobs at risk in the weeks before Christmas. Online fashion store My-wardrobe also restructured via a pre-pack administration.
Like those stores, Tie Rack faces structural challenges beyond the squeeze on consumer spending caused by the economic downturn. Industry experts said Tie Rack had not moved with the times.
Neil Saunders, managing director of retail analysts Conlumino, said: “Tie Rack did well in the 1980s consumer boom but it’s very out of sync with the way people shop now. Men get their ties where they buy their shirts and there is nothing to differentiate Tie Rack, such as high quality or any brand attribute, that would really put it on consumers’ radar.”
The Fingen Group, Tie Rack’s Italian owner, has appointed the accountancy firm Grant Thornton to look for prospective buyers for around 30 overseas stores but will retain ownership of the brand online.
Tie Rack was founded in 1981 by South African entrepreneur Roy Bishko. When the retailer floated on the stock exchange six years later it received £1bn worth of applications for just £12.5m in shares.
It has been in decline since 1998. Accounts for last year show a pre-tax loss of £6.8m on sales of £68.1m.
Dubai’s Majid Al Futtaim (MAF) will spend AED200m ($54.4m) on upgrade works at its Sharjah City Centre mall.
The refurbishment will include additional gross leasable retail space of 13,500 sqm, which will house a cinema and 28 new shopping and dining outlets, MAF Properties said in a statement.
“Sharjah City Centre ‘s expansion and refurbishment promotes the emirate’s wider aims to further develop its retail and entertainment landscape, and cater to the increasing needs of its growing population and increasing number of tourists,” said Dimitri Vazelakis, executive managing director, shopping malls, MAF Properties.
The statement added that the redevelopment would begin in summer 2014, but did not give a date for its completion.
MAF is Dubai’s largest mall operator and its portfolio includes Mall of the Emirates, Deira City Centre and Mirdif City Centre.
India’s malls are struggling amid weak consumer sentiment and poor planning, with up to 80 per cent of retail space lying vacant in more than 250 shopping centers that have opened in the country over the past couple of years, according to a survey.
“Vacancy levels are due to poor location, poor design and poor parking facilities,” said the Associated Chambers of Commerce and Industry of India (Assocham), which carried out the survey.
“The mall magic seems to have disappeared in a puff of smoke on the back of the economic slowdown, poor revenue model, low footfalls-to-sales conversion and lack of special purpose malls.”
More than 47 percent of total mall space across nine cities in India covered by the survey was vacant. In Delhi, 55 per cent of malls were vacant. Mumbai’s malls were 52 per cent empty, followed by Ahmedabad at 51 percent and Chennai at 50 per cent.
A number of malls are shutting down because they unable to justify the rents they are charging tenants, Assocham said.
“In order to lure retailers, many developers started giving a rent-free period for up to six months for big brands,” the industry body added.
Analysts blame poor design, signing up the wrong brands, and high property costs in cities such as Mumbai for the failure of many of the country’s malls.
Kumar Rajagopalan, the chief executive of the Retailers Association of India, told The Times of India that many shopping centers were developed and opened without the appointment of a mall manager or mall management company.
“Customers do not like malls that are half empty or ones that seem to have a lot of new store set-up happening during shopping hours,” he said.
The dramatic increase in shopping malls in India in recent years has been the result of developers trying to tap the country’s growing spending power.
“With India’s growing per capita income and a rising middle class, the retail sector has the potential to be the real growth engine of the country’s economy,” according to Jones Lang LaSalle India. “Growing consumerism, changes in consumers’ tastes and preferences, and heightened brand consciousness has been fast replacing traditional mom and pop stores with organised retail malls that house lifestyle and luxury brands from national and international retailers. As part of its retail transformation, India has seen substantial increase in mall space in recent years.”
Assocham said that other factors hurting the industry included multiple taxes and a shortage of experts in areas including store management.
Prada has this week opened a new store in Tokyo, Japan.
Located in Ginza’s Chuo Dori St, the new store comprises of: men’s, women’s ready-to-wear, accessories and leather-wear sections over three floors and 1,000 sqm.
At present, the Italian fashion house operates 14 sales points in Tokyo, half of which are within luxury department stores. However, its new Tokyo flagship will become one of its biggest stores worldwide.
Prada is also present in 10 other Japanese cities.
Retail and hospitality conglomerate Landmark Group is set to expand with the announcement it will add 40 stores under its Sports One brand across the GCC by 2016.
With six stores currently in operation, plans are underway to expand its network.
However, the company has made no mention of where the new stores will be located.
The concept has been developed by a team of specialists, with a thorough study of the current market offerings to identify gaps and opportunities in the sports retail sector, it said.
Vipen Sethi, CEO of Landmark Group, said: “The Landmark Group’s foray into the sports retail sector was an important milestone that allowed us to expand and diversify our existing portfolio.
“Our endeavor to continue investing in Sports One is a testament to the success the brand has registered in the region and reinforces our commitment to bringing new and innovative concepts to our customers.
“Given the fact that the region hosts some of the world’s top billed sporting events and attracts dedicated supporters, our presence in the sports retail sector will significantly contribute to furthering the GCC’s ambitious growth plans as a sporting hub.”
Sports One first opened the doors of its flagship store in December 2012 in Riyadh, Saudi Arabia, with UAE launches earlier this year.
Shivam Goyal, Business Head, Sports One said: “The launch of Sports One in December 2012 came on the back of our market research that indicated a definite gap in the sports retail sector. Since then, we have been able to identify the needs of our target consumers and further narrow this gap by providing best-in-class sporting products and specialized services that meet the requirements of every kind of customer.”
Gucci, Al Tayer Insignia in joint venture
Luxury brand announces direct entry into the UAE market to build on its six points of sale
Dubai: Gucci, the luxury fashion brand, has announced its direct entry into the UAE through the signing of a memorandum of understanding for the establishment of a joint venture with Al Tayer Insignia, the largest luxury retailer in the Middle East. The joint venture will be headquartered in Dubai.
As a result of a franchise relationship with Al Tayer Group spanning over a decade, Gucci currently has six points of sale in the UAE. With one store located in Abu Dhabi, at Marina Mall; three stores spread across key locations in Dubai — Mall of the Emirates, The Boulevard at Jumeirah Emirates Towers and The Dubai Mall. Gucci also has a presence in Harvey Nichols, Dubai, and Bloomingdale’s, Dubai with corners in these two department stores.
Part of the Al Tayer Group, a UAE-based diversified business conglomerate, Al Tayer Insignia represents over 35 of the world’s luxury brands and operates nearly 80 stores in the region.
The company currently employs over 1,600 people and has continued to experience healthy growth over the past few years. Headquartered in the UAE, it also has operations in Bahrain, Saudi Arabia, Lebanon and Qatar.
Patrizio di Marco, President and CEO of Gucci, said: “We are extremely proud to announce this new agreement with our long standing partner in the Middle East. This is a dynamic region, where Gucci products have been appreciated for many years. The decision to establish this venture in such an important market is consistent with Gucci’s stated objective to further reinforce its direct retail network, which today numbers 317 stores worldwide.”
Khalid Al Tayer, Chief Operating Officer, Al Tayer Group, said: “Having introduced the brand in the UAE in 1999, it gives us immense pleasure to see the phenomenal success of Gucci in the market. We are enthusiastic about this strategic development in our relationship.”
Founded in Florence in 1921, Gucci designs, manufactures and distributes products such as leather goods (handbags, small leather goods and luggage), shoes, ready-to-wear, silks, timepieces and fine jewellery.
Eyewear and fragrances are manufactured and distributed under licence. Gucci products are sold exclusively through a network of directly operated boutiques and a small number of selected department and speciality stores.
Burberry Group Plc (BRBY), the U.K.’s largest luxury-goods maker, said earnings at its nascent beauty business will be less than half its original forecast this fiscal year as it steps up marketing spending.
The division, which Burberry has controlled directly since April, will earn about 10 million pounds ($16 million), the London-based trenchcoat maker said today in a statement, down from an earlier projection of about 25 million pounds. Burberry also reported little-changed first-half earnings and revenue that topped 1 billion pounds for the first time.
Switching the beauty unit to direct control from a licensing agreement has more than doubled the group’s marketing spending, according to Burberry, which plans to introduce a new women’s fragrance in February. The company said it expects a “halo” effect from investment in beauty that will boost sales across the group, while forecasting that operating profit margins will probably show a “modest increase” this year.
“Expectations on beauty profits are coming back down to earth — after a very punchy year one guidance,” said Luca Solca, an analyst at Exane BNP Paribas in London. This is unlikely to change in the near future as “a lack of scale and the need to invest will likely weigh on the bottom line.”
Burberry rose as much as 3.5 percent in London trading and was up 1.6 percent at 1,485 pence at 11:44 a.m. in London.
The company last month named Christopher Bailey to succeed Angela Ahrendts as chief executive officer when she leaves for Apple Inc. (AAPL) in mid-2014. Bailey’s appointment comes as the luxury industry is polarizing, meaning he must decide whether to move Burberry upscale to challenge brands like Prada and Louis Vuitton, or target a wider audience with less expensive goods, according to analysts at Sanford C. Bernstein.
“There will be no radical change in strategy,” Bailey told investors in a webcast today. Existing senior executives will take on additional responsibilities’’ to “enable Christopher to lead the business into the next phase of growth,” Burberry said in the statement.
The company will seek to offset the reduced profit contribution from beauty with “other areas of the business,” Allegra Perry, an analyst at Cantor Fitzgerald, said in a note.
Burberry doesn’t expect analysts’ estimates for full-year profit to move significantly from a range of 455 million pounds to 509 million pounds, it said last month. The average is about 472 million pounds, the company said at the time.
Adjusted pretax profit for the six months ended Sept. 30 was 173.9 million pounds compared with 173.4 million pounds a year earlier, the company said, less than a month after forecasting that the earnings would be around last year’s level.
Sir Philip Green says he is considering moving into food for the first time by setting up high street convenience stores at BHS sites.
The retail tycoon said that Arcadia, his fashion conglomerate, has drawn up plans for a prototype food store within BHS and plans to decide by the end of the year whether to press ahead with the plans.
BHS used to sell food before it was bought by Sir Philip in 2000 and a 150 of its 183 department stores already have planning permission to sell food.
Sir Philip said he his considering launching the food stores in response to the rush from supermarkets into smaller high street locations and customer research that suggested shoppers wanted to buy food from BHS.
“I can’t see any reason why we wouldn’t test it,” Sir Philip said.
A move into food would put BHS into competition with the biggest supermarket retailers such as Tesco and Sainsbury’s, but also Marks & Spencer, which Sir Philip tried to buy in 2004, which has food halls and stand-alone Simply Food stores.
Sir Philip said that if the group decided to press ahead into food, it would appoint a “world champion” to lead the business.
He added: “Every one of the major supermarkets seems to think it [convenience stores] is the way to go. Our customers have said they’d like to buy food. We might have a shot at it.”
The Arcadia boss was speaking as the company, which owns Topshop, Burton, and Miss Selfridge, published full-year results.
In the year to August 31, like for like sales fell by 2.7pc. Total sales rose from £2.68bn to £2.74bn, while pre-tax profits rose from £104m to £481m on the back of Arcadia banking £350m from the sale of a 25pc stake in Topshop and Topman to investment group Leonard Green.
Underlying pre-tax profits rose slightly from £166.9m to £167.8m.
At a results presentation to staff in London, Sir Philip denied rumours he is in negotiations to sell the loss-making BHS. However, he said it would be “idiotic” to ever out a sale of one of his business.
He warned that trading conditions “remain challenging”, with like-for-like sales down 3.7pc in the last 10 weeks as unseasonably warm in the UK has held back sales of autumn and winter clothing.
“Hopefully there will be some winter before Christmas,” Sir Philip said. “We are in good shape. There are no major panics anywhere.”
Over the next year, Arcadia plans to open 161 new stores around the world. It is in talks to open further standalone Topshop stores in the US on the back of success in New York, Chicago, Las Vegas, and Los Angeles. Sir Philip is also considering expansion into China.
In the UK, Sir Philip has refurbished the Arcadia stores at Bluewater shopping centre in Kent, which have subsequently enjoyed a double-digit increase in sales. Arcadia now plans to upgrade up to 20 stores per brand with the new formats.
Crocs, known for its colorful clogs, is considering going private, according to reports.
The company has held talks with a small group of private equity firms, including Blackstone and KKR, a source told Reuters.
Representatives for Crocs, Blackstone and KKR either declined to comment or did not immediately respond to requests for comment.
Crocs shares rose 9pc to $13.79 on Wednesday afternoon on the Nasdaq, giving the company a market capitalisaton of around $1.2bn (£750m).
Crocs posted a 2pc decline in sales for the third quarter, hurt by weakness in the Americas and Japan. The company said it saw less discretionary spending for footwear, apparel and other consumer goods in the US.
“I wish I could tell you we were expecting a big improvement in consumer confidence in the US throughout the year, but we are not,” Crocs chief executive John McCarvel told analysts last month.
John Lewis to open four-tier, 230,000sq ft department store at Westfield London in 2017 – Retail Times
John Lewis goes west
John Lewis is to open a four-level department store at the UK’s number one shopping centre, Westfield London, creating approximately 600 new jobs for London.
The 230,000sq ft department store will be John Lewis’s first West London branch and will stock over 350,000 lines including fashion, home and technology. Creating a bold and impressive architectural statement, which will anchor the new Westfield London extension, the shop will include an outdoor dining terrace with views over the listed Dimco buildings and BBC television centre, the retailer claims.
The planned Westfield London extension will feature 600,000sq ft of additional retail and 1,500 homes and is expected to create around 6,700 permanent new jobs. The new department store is expected to be a major attraction for customers, adding to the 27m UK and tourist shoppers who visit Westfield London annually.
Michael Gutman, Westfield’s European managing director, said: “John Lewis is the most requested store at Westfield London and we are delighted that we will soon be able to deliver on this for our customers. The new store will be another huge attraction to Westfield London and will become an important centrepiece of the massive regeneration taking place in the White City opportunity area with the creation of thousands of new homes and jobs.”
Andy Street, John Lewis managing director, said: “Our business in London has strengthened significantly over recent years. It is therefore right that we now move to open in Westfield London and bring our offer to customers in the west of the city.”
Nicholas Botterill, leader of Hammersmith & Fulham Council, said: “The arrival of John Lewis at Westfield is further proof that White City is becoming unmatched as a centre for shopping and leisure. We warmly welcome the creation of 600 jobs at the department store, which will bring even more visitors to the area and make a lasting contribution to its ongoing regeneration. This is fantastic news for local people, for the local economy and for the whole of west London.”
The new John Lewis department store at Westfield London is expected to open in 2017.
Middle East customers are among the most sophisticated in the world
Dubai: Louis Vuitton, the world’s biggest luxury brand in terms of sales, plans to double the size of its existing Dubai Mall store, Roberto Eggs, the company’s president for Europe, the Middle East and Africa told Gulf News in an exclusive interview on Tuesday.
Work on expanding the store, which covers an area of 800 sq/m, is expected to begin in 2014, and is slated for completion in 2015.
“This is going to be the largest store in the Middle East — it will be our flagship store,” Eggs said. He added that there will be announcements of other projects soon.
The French maker of handbags, which is owned by LVMH Moet Hennessy Louis Vuitton SA , officially opened its first standalone shoe store in the Middle East at Dubai Mall’s Level Shoe District this year.
It opened two other stores in the region this year, including one in Abu Dhabi’s The Galleria, and another in the Avenues Mall in Kuwait, which offers customers made-to-order handbags. The Dubai store may see the same concept in the future, according to Eggs.
Meanwhile, internationally, the company plans to open a standalone shoe store in London’s luxury department store Harrods in mid 2014.
LVMH is increasing prices and slowing retail expansion at Louis Vuitton. The world’s largest luxury goods maker has seen slow growth in its fashion and leather goods division, Which also includes the Dior and Celine brands, with sales up 4 per cent in the first nine months of the year, down from 5 per cent in the first half.
Louis Vuitton is developing its product offering to its customers. Next year, the brand will focus on women’s handbags, its largest product category, offering a range of shapes and colours. It’s other products include clothes, shoes, jewellery and accessories.
Nicolas Ghesquière, Louis Vuitton’s newly appointed creative director for women’s fashion, will launch his collection of ready to wear items, bags and shoes by mid to end of next year.
Additionally, the brand will develop its travel items, including trolleys that will come in new materials and colours.
“Customers can expect creativity on ready-to-wear and shoes- and some surprises,” Eggs said.
Commenting on how Louis Vuitton maintains it brand value, Eggs said that the brand will “never” discount its products. “Because we believe we are selling brand value and brand equity,” he said. He also said the brand manufactures some of the leather used in its products.
He added that the brand is “forward looking” and “long-term oriented,” he said.
Asked if Louis Vuitton would like to combine exclusivity with affordability, Eggs said: “We want to be exclusive but not exclude clients.”
Middle Eastern customers have long been “sophisticated” buyers, according to Eggs. He added that the region is among the brand’s key markets.
Elsewhere, such as Asia and Latin America, customers are “shifting towards products with high quality,” he said.
Louis Vuitton celebrates 30 years in the Middle East this year.
Mr Price Group Ltd. (MPC), a South African clothing and household goods retailer, said first-half profit gained 24 percent as it focused on customers paying in cash amid falling consumer confidence.
Net income in the six months through Sept. 28 advanced to 747 million rand ($72 million) from 605 million rand a year earlier, the Durban-based company said in a statement today. Sales increased 15 percent to 7.2 billion rand.
“We focused on avoiding chasing credit sales to drive top-line growth and are pleased that cash sales growth of 15.1 percent exceeded credit sales growth of 11.6 percent,” Mr Price said in a statement. “The performance is against a backdrop of low consumer confidence in a challenging retail environment, caused by slowing real wage and credit growth.”
Consumer confidence in Africa’s largest economy dropped to a 10-year low in the third quarter as higher inflation curbed spending. Truworths International Ltd. (TRU), South Africa’s largest listed clothing retailer that generates 71 percent of its sales in credit, said last week that revenue growth slowed in the 18 weeks through Nov. 3. Mr Price cash sales made up almost 80 percent of total revenue, the company said.
Mr Price shares rose as much as 2.8 percent, the most since Oct. 28, and traded 2.5 percent higher at 150.80 rand as of 3:37 p.m. in Johannesburg. The stock has gained 7.7 percent this year, compared with a 12 percent decline in the 11-member FTSE/JSE Africa General Retailers Index.
“Mr Price cash sales are high and this means they have been able to consistently put good results on the table,” Henre Herselman, a derivatives trader at Nedbank Private Wealth in Johannesburg, said by phone today. “These earnings are brilliant, considering the current retail sector sentiment.”
The company raised its interim dividend 26 percent to 1.68 rand a share.
Bangalore: Reebok, owned by German sportswear brand Adidas AG, may open 150-300 stores over the next three years in India as it promotes its new retail format and focuses on offering fitness-related products.
Reebok, which along with its former senior management is being investigated by Indian regulators for alleged fraud, had introduced a new retail format called the Fit Hub earlier this year in India.
The company has opened 33 stores in the new format, designed to appeal to people shopping for fitness-related products, so far and aims to have 100 such stores by spring next year.
“It’s a growing industry. I think we have the capacity to open somewhere between 50 to 100 stores a year in India (over the next three years),” managing director Erick Haskell said in an interview. “We tend to be present in metros and there’s some opportunity in some other cities we’re looking at. For example, our franchise partners in Karnataka are exploring opportunities in lower tier cities where they think the market is about to develop.”
Haskell said the company will eventually convert its entire store base in India into the new format stores.
Over the past year, Reebok shut roughly half of its 900 stores in India. The company’s stores are owned and run by franchises while Reebok looks after the advertising and marketing of the brand.
“There were difficult moments (in shutting the stores) but it was a cooperative process. We expanded too quickly and had stores that were not viable. The decision (to close stores) was based on viability of the store. So generally, it was a fairly easy conversation to agree that if the store is not profitable and we don’t see it becoming viable in the future, then we close it down,” Haskell said.
Regulators are investigating alleged financial irregularities involving Rs.870 crore at Reebok’s India unit. Adidas has blamed Subhinder Singh Prem, its former managing director, and Vishnu Bhagat, a former chief operating officer, for the irregularities, which surfaced in May last year. Prem and Bhagat were running Reebok India at the time the irregularities are alleged to have occurred.
Press Trust of India reported on 5 November that the ministry of corporate affairs is likely to soon decide on a report submitted by the Serious Fraud Investigation Office on Reebok.
Haskell declined to comment on the investigations and said the company will continue to cooperate with the regulators as and when asked.
New Look Group Ltd., Britain’s second-biggest women’s budget-fashion retailer, said three international markets have the potential to overtake the U.K. in terms of importance as it expands beyond home.
Germany, Russia and China “can be as big as the U.K., or significantly bigger,” Anders Kristiansen, chief executive officer of the closely-held company, said on a conference call after New Look reported an increase in first-half earnings.
New Look, whose owners include private-equity firms Permira Advisers LLP and Apax Partners Worldwide LLP, is setting its sights on expansion after selling bonds in May to refinance net debt of 1.1 billion pounds ($1.7 billion). Poland will form a fourth prong of the chain’s international growth, the CEO said.
In China, the retailer plans to open its first store in spring and to have 20 by the end of the year, clustered around Shanghai and Beijing, Kristiansen said. It already has 21 stores in Russia, where it is seeking a joint venture partner. In Germany, New Look wants to open standalone stores to add to the 10 concessions it has in department stores.
Kristiansen drew comparisons with Hennes & Mauritz AB, saying that where H&M does well “we do well.”
Earnings before interest, taxes, depreciation and amortization rose 19 percent to 103.7 million pounds ($164.5 million) in the 26 weeks to Sept. 28 on lower levels of discounting and tighter inventory control, New Look said today.
U.K. same-store sales rose 2.6 percent, while group same-store sales gained 1.9 percent.
“In line with the rest of the sector, current trading is more challenging and as yet we are not seeing any benefits of economic recovery feed through to our customers’ pockets,” Kristiansen said.
When asked about whether the company is considering a share sale, the CEO said New Look is unlikely to consider an initial public offering in the next 12 months.
Deloitte’s 2013 Christmas Spending survey predicts Irish consumers will again spend more than EU counterparts over the festive season
Nov 8 2013
The average spend this Christmas per household is suggested to reach €894
The annual Deloitte Christmas Spending survey, carried out during the second and third week of September this year, has been released this week and once again predicts that Irish consumers will spend more this Christmas period than the rest of Europe. It does suggest that while spending will still be high on an European average, Irish consumers will cut spending by 1.7% this year compared to last.
The average spend this Christmas per household is suggested to reach €894, with the majority of money being spend on gifts (€484.81), food (€258.85) and social activities (€150.76). In total food spend over the festive period will account for 28% of Christmas budgets for Irish consumers.
When purchasing food, large supermarkets and hard discount stores are the most popular choices for Irish consumers when shopping this festive season. 68% of consumers plan to shop in large supermarkets with 53% planning to shop in hard discount stores while only 41% plan to shop in traditional local food shops, such as butchers or bakeries.
When it comes to most popular presents to give this year, of which books topped the list closely followed by gift vouchers, 32% of respondents stated chocolate as their chosen present for family a friends. This is similar to that reported in 2012, while those picking food and drink has fallen from 25% in 2012 to 21% this year.
This year also marks the first time since 2010 that gift vouchers has overtaken cash as a gift choice. The average value of gift vouchers is reported to be €38, a drop in value from previous years. This is roughly half of that of Switzerland where the average gift voucher comes in at €70.
Consumers across the board will become more cash savvy this year with unnecessary spending being once again cut by both Irish and European consumers. 22% of Irish respondents will focus on buying more gifts that are on sale, while 56% of Irish consumers will actively buy less on impulse. Irish women plan to take more advantage of sales this Christmas, with 25% of women intending buy more discounted items compared to 18% of men.
It is also reported that Irish consumers are spending less than Europeans on entertainment, leisure, clothing and day to day spending. With many of those surveyed saying that if required to they are happy to cut back further on these areas.
41% of Irish consumers have a positive outlook on the expected state of the economy in the coming year. This is a change from last year when 49% of Europeans thought the expected state of the economy would be negative. The majority of Europeans now believe that the economy will stay the same or improve over the coming year.
Level Shoe District, the world’s largest shoe store in Dubai Mall, sells 600 pairs a day but aims to almost double the number in the next few years.
The 96,000 square foot store, which includes 300 brands, of which around 40 are stand-alone designer boutiques, opened in October 2012 in an underused area of the mall.
“It was [the previous gold souk] an area that was not doing well,” said Rania Masri, the general manager of fashion concepts at Chalhoub Group, which owns and operates Level Shoe District.
“First of all we very much believed that the concept of one category all under one roof was the right way to go. We had the opportunity of the space. The footwear industry itself is showing immense growth around the world.
“In 2013, the value of the luxury shoe category internationally was US$17 billion. That grew from $15bn the year before.”
The store wants to reach 1,000 sales a day within a few years.
Around a fifth of its customers are UAE residents, while the rest are tourists. Shoppers from Saudi Arabia, particularly Riyadh, are among the top spenders, as are Chinese and Indian tourists.
“In the past couple of weeks we have seen more Russians. The weather is changing in Russia so it’s a great time of year to be in Dubai,” said Ms Masri.
The store prides itself on exclusives, she said, and is one of just a handful to sell the world’s first 24-carat gold velvet shoes.
“We were the first store in the world to launch it, two months ahead of five international department stores,” said Ms Masri.
The high heeled pump for women retails at Dh12,000, while the men’s version, a slipper style shoe, costs Dh19,000. It has sold three pairs, two women’s and one men’s, since it launched at the beginning of October.
“We have only one per size. It’s a very exclusive product and whoever buys this doesn’t want to see many people wearing it,” she said.
Following the opening of the J.Crew flagship store on Regent Street, today French luxury brand Louis Vuitton opened its new multi-leveled shop-in-shop, known as ‘Townhouse,’ in London department store Selfridges. The new shop-in-shop was designed by interior designer Gwenaël Nicolas to give its customers a true luxury Louis Vuitton experience. The project took over 4 years to be realized and now dominates three levels of Selfridges, looking out over the busy road of Oxford Street.
The new concessionoffers eight times the amount of selling space than the previous shop-in-shop and combines a variety of materials like leather, stone and glass in a beautiful in-store display. With the additional space, the new Townhouse from Louis Vuitton can now offer its traditional leather goods and accessories on the ground level, as well as the labels women’s and men’s ready-to-wear line on the first and second level.
Nicolas designs unique double glass helix for Louis Vuitton’s Townhouse
The key focus of the Townhouse is the new glass elevator, placed inside the one of a kind double helix, rotating glass display case that spans all three levels. The entrances of the new shop-in-shop are also cleverly placed, such as the men’s first floor entrance, which stand across the Tom Ford’s men’s wear concession stand.
The French luxury house previously opened two concession stands, one for leather items and one for accessories, in Selfridges back in 2000. Since then the brand has witnessed a growing demand for its other lines and collections. Anne Pitcher, managing director at Selfridges told BoF, “The Louis Vuitton Townhouse is, ultimately, a true testament to our on-going commitment to pushing the retail boundaries to constantly amaze and surprise our customers.”
The new Townhouse design, with mood lights, vintage décor, plus sized changing rooms and the unique glass lift is sure to draw in a surplus of visitors and its location within the infamous Selfridges will bring in clientèle who may have never thought to visit the Louis Vuitton store on Bond Street.
However there is a missing feature from the new Townhouse; it lacks the traditional handbag bar that is found in almost every Louis Vuitton store and concession stand. In an effort to grow away from the brand past reputation for mono-gram bags, the shop-in-shop opted to offer its customers more personal and cosy shopping experience, with modern touches like a ‘digital atelier’ and sales assistants offering individual services via iPad added in, making this Townhouse one of the main centerpieces in the luxurious Selfridges.
Preppy American retailer Abercrombie & Fitch will introduce larger sizes in a bid to boost their ailing sales figures
The brand has often been criticised for excluding larger women with their sizing and CEO Mike Jeffries has been surprisingly candid about the company’s ‘thin and beautiful’ policy – which applies to both customers and staff.
“In every school there are the cool and popular kids, and then there are the not-so-cool kids,” he told the Salon.com in 2006. “Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely.”
On Wednesday the company reported a seventh quarterly fall in sales, that – combined with 30 per cent drop I share price this year – has led to the brand’s decision become more inclusive.
The move means that from next spring they will offer more women’s tops, larger sizes, a wider range of colours and begin selling shoes in a bid to win back customers that have turned to “trendier” labels such as H&M, reports Reuters.
Currently the brand sells up to a size ‘large’ in women’s styles, which equates to a UK 14.
Debenhams bosses have lost out on cash and share bonuses this year after profits slipped, according to the department store’s annual report.
Michael Sharp, the chief executive of the retailer, saw his total pay package drop to £754,000 in 2013, 22% below last year, after missing out on a potential bonus worth 100% of his £615,000 a year basic salary. Simon Herrick, its chief financial officer, saw his pay package drop 8% to £489,800, Debenhams’ annual report, published on Monday, showed.
Both executives could have taken a cash bonus worth 2% of salary despite the fall in profits. The bonus would have been based on reaching a base level of underlying sales growth and gross margin performance, but they elected not to take up the cash “in the light of overall profit performance”.
Neither Sharp nor Herrick received a pay rise for the financial year starting in September 2013.
Debenhams said it had faced “very challenging conditions” this year and predicted a tough consumer backdrop for 2014 when it reported a 2.7% fall in annual pre-tax profit to £154m, last month.
It blamed bad weather in the spring for forcing a surprise profit warning in March while it was forced to write off £3.8m after the closure of franchise stores in Romania.
Qatari retailer Al Meera Consumer Goods Company has announced that it has signed an agreement to build seven new neighbourhood shopping malls.
The deal has been struck with Al-Aliaa Trading and Contracting Company and Al-Muftah Trading and Contracting Company, it said in a statement.
According to the agreement, Al-Muftah Company will build three new malls for Al Meera at Rawdat Ekdeem, Al Azizia, and Zakhira.
Al-Aliaa will handle the construction of the four other malls at Al Wajba, Muaither, Al Wakra, and Al Thumama.
Guy Sauvage, CEO of Al Meera, said: “we are pleased to sign this agreement with Al-Muftah and Al-Aliaa companies, the two leading companies in their field, to support our expansion plan.
“The progress of Al Meera will benefit all in Qatar, shareholders and consumers, especially that Qatar was and will remain the major market for our retail company”.
He added: “The goal of our expansion is to make everyone very close to Al Meera stores everywhere in Qatar before the end of next year. Al Meera will continue in rehabilitating its old branches and maintaining them to fully transfer to the new innovative concept.”
Ayman Khaled Mahmoud, managing director of Al-Aliaa, said: “Building new retail stores is very important to serve all areas in Qatar. Al Meera, within its expansion plan, will add branches to the various areas of Qatar to reach all consumers.”
Ibrahim A Al-Muftah, managing director of Al-Muftah, added: “The expansion of Al Meera in Qatar through modern and contemporary buildings reflects the ambition of the company in enhancing a new concept of shopping, suitable for all shoppers’ needs. We are ready to cooperate with Al Meera and support it.”
Earlier this year, Al Meera completed a deal to buy the business and assets of Safeer Stores in Oman.
The company said the signing of a sale and purchase agreement, which took effect from the end of January, would see five Safeer hypermarkets and supermarkets being handed over to Al Meera to run.
Johannesburg – Truworths International Ltd., South Africa’s largest listed clothing retailer, fell the most in more than four years as inflation curbed consumer spending and slowed its sales growth.
The stock slid 8.1 percent to 85 rand by the 5 p.m. close in Johannesburg, the biggest decline since November 2008.
Truworths was the worst performer on the 11-company FTSE/JSE Africa General Retailers Index today.
South African consumer confidence reached a 10-year low in the three months through September as inflationary pressures curbed spending and demand for credit.
Truworths sales for the 18 weeks through November 3 rose 7 percent to 3.5 billion rand ($341 million), compared with a 15.9 percent increase a year earlier, the Cape Town-based company said today in a statement.
Credit sales accounted for 71 percent of revenue, with like-for-like store sales rising 2 percent.
“It’s becoming increasingly difficult for credit retailers,” Roger Tejwani, a retail analyst at NOAH Capital Markets, who has a sell recommendation on Truworths, said by phone from Cape Town.
“Their debtor costs have grown and they are facing increasing competition from international brands.”
Foschini Group Ltd., South Africa’s worst performing clothing retail stock this year, which sells about 60 percent on credit, fell 3.5 percent to 108.11 rand.
Retail sales in the six months through September rose 9 percent to 6.7 billion rand rand, Foschini said in a statement today.
“The difficult credit environment is unlikely to improve in the second half of the year due to the high level of consumer indebtedness,” it said.
Truworths shares have dropped 22 percent this year, while Foschini has declined 23 percent.
The FTSE/JSE Africa All-Share Index has rallied 17 percent. © Independent On-line 2013. All rights reserved.
New York — Hennes & Mauritz (H&M) will open a 42,000-sq.-ft. store in the heart of New York City’s Times Square on Nov. 14 at 12:01 a.m., with a ribbon-cutting and lighting of the H&M logo on the top of the building by global recording and fashion superstar, Lady Gaga.
“This is truly a milestone moment for H&M, to have a footprint at the crossroads of the world and own a piece of the NYC skyline with our brand illuminated on top of this impressive building,” says Daniel Kulle, U.S. President for H&M. “With over 7,000 sq. ft. of LED screens, and a 53-ft. glitter wall in this ground breaking location, we knew we had to partner with a star who shines as bright as the store.”
The store embraces modern technology with a digital runway: a virtual catwalk projecting images of guests onto exterior screens that brighten the backdrop of the city that never sleeps. This unique content can also be accessed in real-time through the customers’ social media platforms.
The store interior features other digital components such as LED screens, a charging station equipped with iPads, interactive mannequins and much more. Fluorescent fixtures and geometric metal installations further complement the futuristic, tech savvy store design.
The store will offer collections for ladies, men, young ladies and young men, with separate “shop in shop” areas for accessories, lingerie, sports apparel, maternity and the brand’s plus-size line, H&M+. This location will carry the Swedish retailer’s fantastic children’s collection.
To celebrate opening day, H&M Times Square will be open for 24 hours with a digital countdown announcing hourly offers.
Marks & Spencer Group Plc (MKS), Britain’s largest clothing retailer, plans to double store numbers in India and expand its lingerie offering there, making the Asian nation its largest international market.
“India is an extremely important market for us,” Chief Executive Officer Marc Bolland told reporters today before the opening of a store in Mumbai. The retailer plans to have 80 outlets in the country by 2016, compared with 36 now, he said.
Bolland is counting on international growth to help reverse nine straight quarters of declining same-store sales in clothing and general merchandise. Demand for high-quality lingerie is growing in India, with Technopak Advisors Pvt. estimating that the innerwear market will double to $6 billion by 2017.
At 35,000 square feet (3,252 square meters), M&S’s store in Mumbai’s upscale Bandra neighborhood is its biggest in India, where in 2008 the London-based company formed a venture with Reliance, controlled by the country’s richest man Mukesh Ambani.
The basement of the outlet is dedicated to lingerie, and will serve as a testing ground for its underwear business, Bolland said. Lingerie accounts for about a third of M&S’s clothing sales, according to Verdict Research.
The retailer may open similar sections in other Indian stores and is considering standalone outlets for women’s innerwear, according to Jan Heere, who oversees M&S’s international operations.
“There is room for tremendous growth in lingerie” in India, Heere said.
The company obtains 64 percent of the merchandise it sells in the country from local suppliers, he said. That’s up from less than 10 percent three years ago, helping reduce prices.
Sales at Indian stores increased 28 percent in the six months ended September, the company said in its earnings statement Nov. 5. Revenue at stores open at least a year showed “double-digit” growth, according to the statement.
M&S’s relationship with Reliance, India’s biggest retailer, has helped it get good deals on real estate, Bolland said. The growth in its Indian joint venture has surpassed China, where M&S owns and operates its own stores.
“We believe that the brand Marks & Spencer has a far more established brand awareness in India than it has in China,” Bolland said. “For us, the most important thing is that the priority is India.”