Monthly Archives: December 2013
Inditex shares gain 11 percent in 2013
Friday, 27 December 2013 Inditex shares are about to close up for the fifth consecutive year. The stock has gained over 11 percent so far this year, targeting an annual closing price of 120 euros per share.With just a week ahead to put an end to the year, shares of Inditex are trading within the region of 116 euros per share and, according to those who follow closely the value, they” could reach 120 euros before the 31st”. It’s noteworthy that only in December, Inditex has received twenty recommendations to buy or maintain.
According to data compiled by FactSet, Inditex have an upside potential of 2 percent, which means that the value would sooner or later reach the 119.05 euros per share. A target price that so far this year has increased by 13 percent as highlighted ‘The Economist ‘ .
Once the stock trades at 119.05 euros, the Arteixo-based group will have a market capitalisation of around 74,200 million euros.
“We have underweighted the retail sector in general, but we recommend buying Inditex for its quality and global business and because we believe it may be one of the few retail companies that exceed the market in 2014” summarised a report issued by Société Générale .
Inditex stock up by 11 percent in 2013
Citigroup said the nine-months results that the company released earlier in December indicate that Inditex has been “one of the few beneficiaries of the fast transfer of online sales from physical stores” and that the company expects to continue to deliver sales growth.
“We are seeing positive growth in sales in Spain” in the second half of 2013, confirmed in early December the group’s president, Pablo Isla.
“Inditex has been able to sustain its level of sales thanks to its internationalisation, in addition to online sales. The main prospect for income’s growth for Inditex will remain abroad, but the percentage of sales in Spain is not doing as bad as in the past years, stressed Luis Buceta , director of BNP Paribas Weath Management.
Additionally, online sales have become a “major part” of the business, given the “high potential for growth” of the markets in which they are present, added Isla.
The second largest outdoor and adventure retailer in the world in terms of revenues and, the largest in terms of volumes, Columbia Sportswear, has entered India with the launch of its first flagship store here in New Delhi. The 1938 found and Portland, Oregon headquartered brand has tied up with Chogori India Retail Limited(CIRL) for an exclusive retailing and distribution partnership in the country.
CIRL was formed in the year 2000 by Hemant Sachdev, an avid hiker, climber and outdoorsman himself. The company currently acts as distributor and retailer for Columbia Sportswear and exclusive retailer for the Colorado-based footwear brand, Crocs. CIRL claims to have introduced Crocs footwear in the Indian market and is the exclusive retail partner for the brand in India.
Earlier in August when the Columbia Sportswear-CIRL partnership culminated, Tim Boyle, President and CEO, Columbia Footwear was quoted as saying: “We are pleased to welcome CIRL to our existing base of 26 independent distributors that have been instrumental in establishing Columbia’s brands in more than 70 countries over the past two decades. We are confident that CIRL, with more than a decade of experience building consumer brands in India, is well-equipped to compete and make us one of the first U.S.-based outdoor companies to penetrate the world’s second-most-populous country.”
Under the agreement, the latter will open exclusive brand stores for Columbia and will make the brand available at multi-brand outlets, large format retails and e-commerce platforms.
While, the company’s first flagship store Delhi has launched on 24th December, other stores would soon follow suit in the cities of Mumbai, Bangalore and Leh in the first two quarters of 2014.
The goal for the partnership between the two companies is to break into a largely untapped and unorganized active outdoor wear market in India, which is growing at a phenomenal rate.
According to market research data, the Indian sportswear market is growing at an annual rate of 33-35 % and is estimated at around Rs 36,000 crore of total worth as of 2013.
The NASDAQ-listed Columbia Sportswear uses cutting edge technology to develop innovative products that are comfortable, protective, functional and stylish. Some of Columbia’s ground-breaking technologies include Omni Freeze Zero, Omni Heat Thermal Reflective, Omni Dry and Omni Tech, amongst a host of others. The extensive product line up from the brand includes a wide variety of competitively priced apparels, including tops & bottoms ranging from Rs 1,099 to Rs 4,999 and jackets from Rs 2,999 to Rs 12,999.
Irish retailer Brown Thomas is planning to spend up to €9 million next year refurbishing the ground floor of its flagship department store on Grafton Street in Dublin.
“We’re going to put in a new beauty hall, we’ll have new beauty brands coming in and we’ll be refitting our accessories,” managing director Stephen Sealey told The Irish Times yesterday.
“It will refresh the ground floor and give it a lift and add to the offering in the store.”
The upmarket retailer also plans to invest about €850,000 to expand its online offering next summer.
Launched in October at a cost of about €600,000 with a range of beauty products, Brown Thomas plans to add handbags to its online range in February, followed by shoes, sunglasses and certain fashion items later in the year. It will also offer customers a “click and collect” service that will allow them to pick up their items in store.
“Our aim is to have about 50 per cent of the store available online by the middle of next year,” Mr Sealey said.
Brown Thomas made an operating profit of €6 million on sales of €143.5 million in the 53 weeks to February 2nd, 2013, according to accounts just filed.
While sales rose by 2 per cent, its operating profit declined by 0.6 per cent when compared with the previous financial period, which was 52 weeks long.
On a like-for-like basis, sales rose by 3 per cent while its operating profit was 5 per cent higher, Mr Sealey said.
The accounts show that Brown Thomas paid a dividend of €5 million to its parent company, Selfridges. This was its first dividend payment in three years.
When interest charges were accounted for, Brown Thomas made a pre-tax profit last year of €6.2 million. The company paid corporation tax of €890,000 to leave it with an after-tax surplus of €5.3 million.
Brown Thomas increased its headcount by 17 to 801 last year with wages and salaries rising by 7.2 per cent to €25 million. Staff received a 2 per cent pay increase during the year, their first since 2008.
Directors’ emoluments declined from €1.5 million to €832,000 during the year.
The accounts show that the deficit in the company’s defined benefit pension schemes widened to €12.9 million from €8.7 million in the previous year. Mr Sealey said Brown Thomas has “reached agreement” with the trustees of the main scheme on a funding plan for the scheme, which is closed to new entrants.
Mr Sealey said current trading was “all right”, with November sales knocked by the controversy surrounding the payment deadline for the State’s property tax. “We weren’t helped by that quite frankly.”
He expects sales to rise by 3 or 4 per cent in the current year although a lot will depend on sales over the next two weeks.
While consumer sentiment has improved, Mr Sealey said this has yet to feed through to the retail sector. “I think we’ll get that next year. We’ll see a bounce.”
Mr Sealey declined to comment on Selfridges’ involvement in the recent purchase of Ulster Bank’s loans in department store rival Arnotts.
Qatar’s sovereign wealth fund is eyeing UK retail chain Marks & Spencer in a GBP £8bn (US$12bn) deal, according to London’s The Sun newspaper.
Qatar Investment Authority (QIA) purchased London luxury store Harrods for GBP£1.5bn in 2010 and already owns a string of other assets in the UK, including a 26 percent stake in supermarket Sainsbury’s.
Marks & Spencer has about 1,000 locations worldwide, including in the UAE and Saudi Arabia, and employs about 80,000 people. In its latest set of financial results, the company reported a 9.7 percent decline in profit to the six months up to the end of September 2012 to GBP£290m, while group sales increase 0.9 percent to GBP £4.7bn.
The Sun did not specify its source on the reported takeover bid, but shares in the retail rose on Thursday and Friday amid speculation of a buy-out. Marks & Spencer, which was founded in 1884, is listed on the London Stock Exchange and is a constituent of the FTSE 100 index.
Neither QIA nor Marks & Spencer had responded to Arabian Business’s request for comment on the matter at the time of publication.
QIA’s other assets include an 8.7 percent stake in US jeweller Tiffany & Co, as well as a 3 percent stake in oil company Total, while it has also invested in British bank Barclays. The sovereign wealth fund also owns 17 percent of Volkswagen and 10 percent in Porsche.
The fund is believed to have assets in excess of more than US$100bn, positioning itself as the 12th world largest sovereign wealth fund by asset under management, according to the Sovereign Wealth Fund Institute.
Bumper Boxing Day sales as shoppers embark on £2.7bn spending spree
Record spending in the Boxing Day sales delivered a Christmas boost to Britain’s retailers on Thursday, confounding fears of a festive slump.
More than £2.7 billion was spent in stores and at online retailers across the UK, with many shops reporting their busiest Boxing Day to date.
Analysts predict that £2.97 billion is likely to be spent in stores and online on Friday. The combined total would be Britain’s all-time record daily retail spending, beating the previous figure of £2.8 billion, which spending data from the British Retail Consortium and the Centre for Retail Research (CRR) show was reached on Dec 21 and Dec 27 last year.
Thursday’s figures will cheer the retail sector and be viewed as further evidence that the economy is improving.
Jason Gordon, a consumer business specialist at Deloitte, said: “There is certainly a rebound in consumer confidence as the economy picks up which is definitely good news.”
A total of £2.22 billion was projected to have been spent in stores on Thursday, up 5.7 per cent on last year, according to the CRR. Online shoppers spent £540 million — a new daily record — on Boxing Day, up 15 per cent on last year, IMRG, the internet retailers’ association, said.
Total spending on Friday could be even higher, with shops expected to take £2.57 billion – up more than seven per cent on last year’s £2.4 billion on December 27 – and £400 million more expected to be spent online on Friday.
Ten million people flocked to the shops on Thursday after poor weather in the run-up to Christmas. Shopper numbers fell by between 1 per cent and 5.7 per cent during pre-Christmas storms. The total number of shoppers in stores on Thursday was 1.5 per cent higher than last year’s 9.8 million.
Although the number of high street shoppers fell compared with last year, retail parks enjoyed a 12 per cent increase, while 11 per cent more people chose to look for their post-Christmas bargains in shopping centres, sheltered from any adverse weather.
Howard Archer, the chief UK and European economist at IHS Global Insight, said: “Consumers are likely to be especially keen to take advantage of the genuine, major bargains in the sales to acquire items that they are otherwise struggling to afford or are reluctant to make at the moment.”
He added: “However, we suspect that given still squeezed purchasing power, many people will be likely to be careful in buying – or reluctant to buy – items that they don’t really want or need in the sales. If this is the case, interest in the sales could fall away pretty quickly once the best of the bargains have gone.”
Selfridges, which has stores in London, Manchester and Birmingham, took nearly £2 million in its first hour of trading on Thursday, an increase of more than 15 per cent on last year.
Internet shoppers spent an average of 40 minutes online between Christmas Eve and Boxing Day, while John Lewis said 50 per cent of its traffic came from mobile devices.
Harrods also began its winter sale on Thursday and offered mugs of hot chocolate, smoked salmon canapés and blankets to people in the queue, which was serenaded by a string quartet and a performance by a street magician.
More than 1.4 million shoppers were expected to have spent a total of more than £50 million in London’s West End alone on Thursday.
At Cabot Circus in Bristol, shoppers began queuing at 6am on Thursday for the chance to grab a bargain. At St David’s shopping centre in Cardiff, retailers were expecting 150,000 visitors, with sales tipped to reach £2 million. Bluewater in Kent predicted that more than 800,000 people would come through its doors between Boxing Day and New Year’s Eve.
Darren Pearce, a director at the Meadowhall shopping centre in Sheffield, said staff started work at 3am to prepare for “our busiest Boxing Day to date”.
Social media recorded sporadic reports of fights between shoppers as bargain-hunters scrambled for sales items.
The John Lewis clearance began online at 5pm on Christmas Eve. Within the first hour, sales were up 13 per cent on last year. Some 56 per cent of all traffic came from mobile devices.
Sue West, from Selfridges, said the ITV drama Mr Selfridge has done “wonders for the brand”. “We’ve seen a lot of new clients, a lot of new customers come in, ever since the series went live.”
Liberty also reported better than expected Christmas trading after a Channel 4 documentary about the store. Kate Brindley, a spokesman, said: “Liberty has seen a really remarkable Christmas trading period so far. Footfall has been up between 45 and 60 per cent.
“Sales are up 17 per cent on last year.”
Tom Nathan, the general manager of Brent Cross shopping centre in north London, said people came out the day after Christmas to face the madness of the sales “because it’s the thrill of a bargain”.
The South West, the North and Yorkshire saw the biggest increase in numbers visiting shopping centres, rising by 30 per cent year on year according to the analysts Springboard.
In Scotland, shoppers were expected to have spent a total of around £232 million across the country, with £187 million being spent in stores.
Many shops opened their doors at 6am to cope with the demand, with prices discounted in some by up to 75 per cent.
However, analysts pointed out that, despite the record spending, the discounts offered mean that some retailers may not necessarily consider the sales an unmitigated success. Retail websites were the biggest winners on Thursday. By the end of December, it is estimated there will have been three billion visits in the UK, the first time that figure will have been reached in a single month.
James Murray, digital insight manager at Experian, an information services company, said habits were changing, with more people spending on Christmas Day. “Christmas 2013 has consistently outperformed 2012 on virtually every single shopping day this December, with online visits from Christmas Eve through to Boxing Day up from last year,” he said.
Google has released its 2013 Google Zeitgeist, listing the most searched-for terms, people, places and moments throughout the calendar year.
US leather goods brand Coach topped the list for most searched for fashion brand by UK Googlers this year, toppling Stella McCartney who was last year’s most searched-for fashion brand.
Coach has three stores in the capital, including a flasgship store on New Bond Street, Regent Street and in Westfield shopping centre. Coach also appointed British designer Stuart Vevers as executive creative director in June this year.
Hermes – who won a long-drawn-out lawsuit against LVMH earlier in the year – was the second most searched-for fashion brand, with French fashion house Chanel coming in at third and Italian label Gucci fourth.
Michael Kors, Louis Vuitton, Prada, Vivienne Westwood, Lacoste and Tommy Hilfiger also made up the top ten.
Cara Delevigne topped the list for most Googled fashion figure of 2013, as well as most re-blogged model on Tumblr ahead of Miranda Kerr and Candice Swanepoel.
Waitrose has announced that it will be opening six new branches at Welcome Break sites across the UK within the next four months.
The partnership between Waitrose and Welcome Break began in 2009, and has seen new branches being rolled out across the UK in order to satisfy customer demand. A deal was struck earlier in the year extending the franchise partnership for a further ten years.
Waitrose said the six new stores will create 120 jobs and means the retailer now has 25 branches at Welcome Break sites.
The next branch opens this week on the forecourt at Welcome Break Hopwood Park on the M42 near Birmingham. Five further branches will open in the Midlands and the North, and the first Waitrose at a Welcome Break site in Scotland will also open in Gretna Green, Dumfries on the M74 later this month.
Waitrose business to business director David Morton said: “Our partnership with Welcome Break has proved a real success with customers and these new branches will give us the opportunity to increase our presence in other areas where customer demand is high.
“As these new stores are predominantly in the midlands and the north of England, our recently opened distribution centre in Leyland will also help to support our growth in the area. We’re also delighted to open the first Waitrose at a Welcome Break in Scotland.”
Tiffany Ordered to Pay Swatch $449 Million in Watch Case
Dec. 23 (Bloomberg) — Swatch Group AG won an arbitration award of about 402 million Swiss francs ($449 million) from Tiffany & Co, after the timepiece maker claimed a breach of contract at their joint venture. Strategic Group’s Burt Flickinger and Citigroup Global’s Steven Englander speak on Bloomberg Television’s “Bloomberg Surveillance.” (Source: Bloomberg)
Tiffany & Co. (TIF) will have to pay an arbitration award of about 402 million Swiss francs ($449 million) to Swatch (UHR) Group AG after the timepiece maker claimed a breach of contract at their joint venture.
Swatch and Tiffany became embroiled in a legal battle in 2011 after the biggest maker of Swiss timepieces alleged the U.S. jeweler blocked development of their partnership. Tiffany said it honored obligations under the terms of the alliance the two companies had begun almost four years earlier, when they agreed to develop and sell watches under the Tiffany brand and share the profits.
Last month, Tiffany posted third-quarter profit that topped analysts’ estimates and boosted its annual earnings forecast, helped in part by higher prices and falling precious metal costs. The $449-million award doesn’t affect the company’s prospects, according to two analysts.
Tiffany “has the means to pay the total award with cash on hand, and the announcement eliminates a long-term overhang on the stock,” Ike Boruchow, an analyst with Sterne Agee & Leach Inc., wrote in a note to clients today. Citing a favorable outlook for Tiffany for next year, the New York-based analyst said “we would be buyers on any weakness in the
David Schick, an analyst with Stifel Financial Corp. in Baltimore, described the award as “the very definition of one-time.” Watches represent 1 percent of Tiffany’s sales and the jeweler was already preparing other options for the category, he said in a note to clients today. Schick recommends buying the shares.
Tiffany is reviewing options with its legal counsel, the U.S. company said in a statement yesterday. Beatrice Howald, a spokeswoman for Swatch, said she couldn’t comment on whether Tiffany can still appeal the decision. The payment is due immediately and interest dating back to June 2012 will be added to that, Howald said by phone today.
Tiffany will take a charge of $295 million to $305 million in the fourth quarter for the decision by an arbitration panel in the Netherlands. The charge may reduce earnings by as much as $2.35 a diluted share for the fiscal year ended Jan. 31, relative to the forecast of $3.65 to $3.75 a share given in November, Tiffany said in the statement.
“We were shocked and extremely disappointed by the decision of the arbitral panel,” said Michael Kowalski, Tiffany’s chief executive officer, adding that the company has sufficient financial resources to pay the damages and that it won’t affect the company’s ability to execute its business plans.
“This is great news for Swatch,” said Luca Solca, an analyst at Exane BNP Paribas. The amount to be paid is “not immaterial and it clears a question mark on the stock.” Before today’s trading, Tiffany stock had gained 58 percent in New York this year. Swatch has advanced about 27 percent, valuing the company at 30.4 billion francs.
Tiffany’s counterclaim was dismissed by the Netherlands Arbitration Institute, said Biel, Switzerland-based Swatch in a separate e-mailed statement.
The Swiss maker of Omega watches in January announced the $1 billion purchase of the Harry Winston watch and jewelry unit, adding a luxury label to its portfolio. That purchase filled the gap in its portfolio left by the dissolution of the Tiffany collaboration, analysts said at the time.
Aldi Einkauf GmbH, the German-based discount grocer, will open 650 new U.S. locations by 2018, increasing its store count by 50 percent as it expands across the nation.
Closely held Aldi plans to invest about $3 billion to open 130 stores a year, to reach 1,950 by 2018, and build a regional headquarters and distribution center in Moreno Valley, California, the company said today in a statement. The expansion will create about 10,000 jobs, it said.
The U.S. grocery business is getting more competitive as Americans shop for less-expensive foods at supercenters, as well as look for more natural and organic options. Big-box retail chains such as Wal-Mart Stores Inc. and Target Corp. (TGT) have also taken share from traditional supermarkets.
Aldi currently has about 1,300 stores in 32 U.S. states and has recently opened in Houston and expanded in southern Florida and New York City. Kroger Co. (KR) is the largest U.S. grocery-store chain with more than 2,400 supermarkets and multidepartment stores.
New York — Saks Fifth Avenue, a subsidiary of Hudson’s Bay Company, announced the appointment of former Harrods executive Mark Briggs as chief marketing officer for Saks, effective March 2014. He will report to new president Marigay McKee, another former Harrods executive.
Briggs was director of store image at Harrods for 20 years and was a close colleague of McKee.
“Mark brings a wealth of experience in luxury brand management with a proven track record of creating retail magic around heritage brands,” said McKee in a statement. “His passion for retail theater and essential understanding of the customer will be integral to our success. I am thrilled to welcome Mark to the Saks team, where he will play a key role on the executive committee.”
In his new role, Briggs will oversee all marketing, creative and visual merchandising for Saks Fifth Avenue.
Nike has seen profits jump 40 percent, helped by higher average selling prices and an increase in revenue around the world.
Fiscal second-quarter net income topped analysts’ expectations, though revenue came in slightly short. Nike’s shares rose 39 cents in aftermarket trading, having closed at $78.26 before the report. The stock has risen 52pc in the year to date, and hit an all-time high of $80.26 last week.
The world’s largest athletic goods maker said Nike brand sales grew across every product type and region. Sales of Converse brand items were especially strong in North America, Britain and China. Profit margins were helped by Nike’s shift toward more profitable products and businesses, higher average prices and an easing in the cost of raw materials.
Net income for the three months that ended on November 30 rose to $537m, or 59 cents per share. That compares with net income of $384m, or 57 cents per share, last year.
The company, based in Beaverton, Oregon, said revenue rose 8pc to $6.43bn from $5.96bn. Analysts expected earnings of 58 cents per share on revenue of $6.44bn, according to FactSet.
Selling and administrative costs rose 14pc to $2.1bn as the company ramped up advertising and marketing ahead of upcoming global sporting events such as the football World Cup in Brazil and Winter Olympics in Russia next year.
At the end of the quarter, worldwide future orders for Nike brand shoes and clothes scheduled to be delivered between December 2013 and April 2014 rose 12pc year-on-year to $10.4bn.
House of Fraser is in talks to be acquired by the French department store chain Galeries Lafayette, it was reported today.
The retailer, which has 61 stores in the UK and Ireland, is said to be looking at a price tag of at least £450million, according to the Financial Times.
However, House of Fraser is also believed to be continuing with preparations for a flotation on the London Stock Exchange early next year.
Family-controlled Galeries Lafayette, which has 65 stores, has exclusivity on the talks with House of Fraser until the end of January.
It is looking at overseas expansion as a way of compensating for a slow-growing domestic market in France.
House of Fraser, which generates sales of £1.2billion a year and employs 7,300 people as well as 12,000 concession staff, has been the subject of takeover speculation in the past year.
It is believed to have held informal takeover talks with Sports Direct tycoon Mike Ashley and the Qatari royal family before setting its sights on a return to public ownership.
The chain, which is 161 years old, first listed on the stock market in 1948 and remained a public company until it was bought by Mohamed al-Fayed in 1985.
It was listed again in 1994 before being snapped up in 2006 by a group of investors led by Icelandic tycoon Jon Asgeir Johannesson’s Baugur Group in a £350m deal.
UNLISTED retail group Edcon has signed a franchise deal with British high street brand River Island, providing the local leading company with sole distribution rights in South Africa.
The first flagship store is set to launch in Rosebank, Johannesburg, in June next year, with additional flagship stores expected to open in Cape Town in October.
Edcon has introduced a slew of international brands like Topshop, Dune London and Lucky Brand through both franchise and store-in-store formats in an aim to attract footfall boost profitability. The group’s strategic initiatives also include improved sourcing and a beefed-up merchandising team for its core Edgars brand.
Local players such as Truworths, Woolworths and The Foschini Group have streamlined their fashion supply chain in the face of heightened competition as global players such as Zara and others expand in South Africa.
“River Island is a complete shopping experience all in itself. Not only is it extremely fashion forward but it is also very versatile and possesses its own unique flair. We expect it to be a hugely popular addition to our current range,” Edcon CEO Jürgen Schreiber said.
With more than 65 years of fashion retail experience, River Island continues to grow globally and has more than 300 stores in the UK, Ireland, Russia, Poland, Holland, Belgium and the Middle East.
“We are very excited to be entering into the South African market in partnership with Edcon. We are confident that together, with our combined knowledge and experience, we can deliver fantastic fashion and a great store experience to our South African customers,” River Island CEO Ben Lewis said.
Edcon, which also owns Jet, CNA and Boardmans, has grown from opening its first store in 1929, to trading in 1,368 stores in South Africa, Botswana, Mozambique, Namibia, Swaziland, Lesotho, Zambia and Zimbabwe.
The company would open stores in Ghana and Nigeria next year, Mr Schreiber said.
As the world’s second fastest-growing region, the continent’s booming economies have caught the eye of retailers in search of higher yields 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.
“This (Africa) remains an exciting opportunity going forward,” Mr Schreiber said. “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.”
UK retail major Tesco said on Tuesday that it is planning to enter multi-brand retailing in the country in partnership with Trent, the retail arm of the $97 billion Tata Group. Tesco said it has made an application to the Foreign Investment Promotion Board (FIPB) in this regard, making it the first multinational retailer to enter multi-brand retail in India after the country opened up the sector to Foreign Direct Investment (FDI) in September 2012.
“Trent and Tesco have been in discussions regarding an investment by Tesco in Trent Hypermarket Limited which operates the Star Bazaar business and is engaged in multi-brand retail trading,” a statement from Trent said. “If the application (to the FIPB) is successful, the intent would be to enter into a partnership where Trent and Tesco will each own a 50 per cent stake in THL.” Shares of Trent were up 6.97 per cent on the BSE on Tuesday to close at Rs 1,066.55. ( Must Read: India makes FDI in multi-brand retail a tad easier )
Picture for representational purpose.
THL currently operates 16 stores across the southern and western regions of India. The proposed partnership will operate and build on the existing portfolio of Star Bazaar stores in Maharashtra and Karnataka.
Noel Tata, Vice Chairman of Trent, said, “We believe that our understanding of the Indian market coupled with Tesco’s unparalleled global retail expertise will allow us to leverage the tremendous potential of the market to the benefit of all stakeholders.”
Policy uncertainties had been deterring MNCs from entering the Indian multi-brand retail. (Also See: There will be delay in economic reforms due to 2014 Lok Sabha polls, India tells US )
As per the retail FDI policy, a foreign entrant in multi-brand retail will have to invest a minimum $100 million, of which 50 per cent must be in back-end infrastructure. However, there is no clarity on what the “back-end” would be, as it could mean different things to different retailers. Also, they have to mandatorily source a minimum 30 per cent of merchandise from domestic micro, small and medium enterprises.
Other drawbacks were that e-commerce, a fast-growing segment, has been left out of the ambit of FDI and states will have the freedom to approve or disapprove retail investments. Another concern was that that a change in government at the Centre in 2014 can potentially reverse the FDI decision and put investments in peril, with the main opposition party BJP opposing FDI in multi-brand retail.
Wayne, N.J. — Toys “R” Us announced that, beginning at 6:00 a.m. on Dec. 21, it will remain open continuously through 9 p.m. on Christmas Eve, leveraging last-minute toy shoppers’ most frenetic shopping hours.
All Toys “R” Us stores nationwide are advertising around-the-clock savings and deals during the final 87 hours of Christmas shopping, along with daily deliveries through Christmas Eve. Only full-service stores in Paramus, N.J., and Puerto Rico, will not be open 24 hours a day.
“With only eight shopping days remaining until Christmas, we are offering customers extended, uninterrupted time in stores, providing them the opportunity to shop whenever is most convenient for them – whether early in the morning or late at night,” said Troy Rice, executive VP, Stores and Services, Toys “R” Us.
The chain is promoting Christmas Eve delivery for online orders placed by noon on Dec. 23, as well as its buy-online-pickup-in-store purchasing options.
The New York City Times Square flagship is well into its continuous holiday operating hours, having launched on Dec. 1 its 566-hours-straight of uninterrupted shopping.
Accessory brand, Mat & May, opens kiosk in Cavendish Square, Cape Town
Accessory brand, Mat & May launched its new fashion kiosk in Cavendish Square Mall in Cape Town earlier this month.
The brain child of The Foschini Group, Mat & May has caught the attention of fashionistas around the country since its launch in April, attracting men and women that are more trend aware and are looking for accessories with a difference. “Customers who purchase our products want items that are on trend and are of high quality” said Marketing Merchandiser Renee New. “We satisfy this need and do it in a fun way.”
The opening of a funky new kiosk was the next step in taking the brand further in the a new, exciting retail space to ensure it stays top of mind for the style conscious consumer. “There is no limiting ourselves, we adapt to our environment and go wherever we believe we need to be” said New. “Cavendish Square attracts a fashion savvy shopper and Mat & May offers the perfect range of trendy accessories to suit this customer.”
All stores sell local Mat & May branded items and well-known international branded eyewear such as Rayban, Police and Guess. New additions to this international range include luxury labels like Diesel Michael Kors and Armani Emporio.
Mat & May works closely with a global partner as well as their local buying team who travel abroad frequently to stay abreast of international trends before they hit the mainstream. Keeping ahead of all that is hot and happening is the key focus as it allows them to offer a unique product mix that can both create and finish the fashionista look.
“Trends change so quickly and this creates a lot of room for fun for us to play with. Every six weeks, we redesign and update our store to suit a new, trend-hitting theme,“ said New. Christmas holiday shoppers can enjoy ‘Art School’ theme this December, which offers an array of pop-art inspired, brightly coloured accessories, perfect for the beach or poolside party.
The guests at the Cavendish Kiosk were the first to see Mat & May’s fashion head-turning forecast for 2014. According to New, colour and pattern will continue to drive the season next year. As we move into deeper winter, the colour palette will warm to richer jeweled tones mixed with strong monochromatic geometrical and graphical lines touched with gold. Print inspiration taken from Aztec maps and atlas’s will inform 2014’s trends as travel becomes a hot top. “The old school Hollywood movie glamour of ‘lights, camera, action’ will also play a large role in fashion next year” said New.
With plans to open more stores and kiosks next year, Mat & May continue to set the benchmark for lust-have fashion accessories for 2014. With the new year around the corner, update your look with fun, affordable accessories that are one step ahead of the rest, curated by Mat & May.
Dubai-based shopping mall, retail and leisure group Majid Al Futtaim has heralded a new era in the family-owned company by announcing Tuesday a $5bn investment plan as part of its new unified branding push.
Under the new direction, a diverse group of companies will unify under one umbrella corporate brand – Majid Al Futtaim – with the symbol “M” to be displayed across its assets, including City Centre Malls, VOX Cinemas, Carrefour, Magic Planet, Najm Credit Cards, Ski Dubai and Mall of the Emirates.
Majid Al Futtaim Holding CEO Iyad Malas said despite 20 years of history, the rebranding would make clear that Majid Al Futtaim was behind brands and experiences provided to 250 million customers across the Middle East each year.
He said it was also a chance to “stand out from the competition” and deliver “long-term results and financial returns”, though he declined to give specifics other than say it was aiming for double revenue growth this year.
“We’re taking this opportunity to strengthen ourselves in new and existing markets around the region to our consumers, our people and the communities in which we operate,” he said.
Malas said the company, which had about $10bn in assets, planned to double in size by 2018, after similar growth over the past two decades, and was in a position to make investments totalling $1bn a year for the next five years.
Majid Al Futtaim owns and operates 16 shopping malls and 11 hotels in the MENA. It also holds the rights to the Carrefour franchise in 19 markets in MENA and Central Asia, operating 50 hypermarkets and 47 supermarkets in 12 countries.
Malas said the company’s expansion will be driven by new malls opening in Saudi and Egypt, residential projects in Lebanon, hypermarkets, cinemas, family entertainment centres and snow park openings.
He said investments, especially in property, depended on finding the right land at the right location and price.
George Kostas, Majid Al Futtaim CEO of Properties, said the company had made announcements for AED3bn ($817bn) in the UAE, including the refurbishment and expansion of the Mall of the Emirates and expansion of the Sharjah City Centre.
It was also developing designs for a super regional mall in Sharjah and had recently acquired land in Tecom for a new community centre.
In other countries, it would on Friday sign a deal for a new mall in Muscat in Oman, while he expected work on a City Centre in Beirut to start in two to three years, which would then be followed by a third.
Kostas said the Mall of Egypt was on track for delivery in 2016, while it was eyeing two extra sites in Egypt that were under design development.
“In addition to our current markets, Saudi Arabia plays a very important part in our future growth in the region and we are currently looking at Saudi for where we can potential open,” he said.
Kostos said Majid Al Futtaim was involved in three large mixed-use projects, which were underway, but flagged further growth in the residential sector as a result of the rebranding.
Martin Lindstrom, an international branding consultant who worked with Majid Al Futtaim to deliver the new brand direction, said the aim of the new logo was to be simple and immediately recognisable.
He said it took three components that are unique to the heritage of Majid Al Futtaim – the sand, reflected by the colour, which represents the firm’s beginnings in the UAE, the arch, which was inspired by the iconic dome from Mall of the Emirates; and the M, standing for Majid.
Marks & Spencer is rolling out new self-service terminals in its high street stores, which allow customers to browse for products held either in-store or online as well as pay for goods with Chip and PIN.
The Polytouch screens have been supplied by retail and and banking solutions company, Wincor Nixdorf, in collaboration with Pyramid Computer.
As of November 2013, approximately 700 Polytouch kiosks in 32in and 22in format have been deployed. These next generation kiosks are expected to provide an even more convenient shopping experience by reducing queue times and further improving customer service, said Wincor Nixdorf.
Polytouch is an all-in-one multi-touch system and claimed to be an ideal platform for interactive applications.
The Polytouch device allows customers to browse for products held either in store or online, and is the first Polytouch screen interface in the UK to be equipped with integrated Chip and PIN to PCI DSS standards; allowing customers to safely pay for their purchases instantly.
Intelligent modular design has enabled previously deployed 32in units to be field upgraded from MSR to Chip & PIN technology, while new 22in units are shipping with Chip & PIN as standard.
Marks & Spencer said it is using the terminals to make the in-store shopping experience more convenient for customers by allowing them to move more freely between shopping channels and make payments as smoothly as possible. Wincor said it has utilised its substantial project management and quality assurance experience to help M&S develop and de-risk this first-of-a-kind in-store technology.
Kyle McGinn, head of M&S new channels and digital labs, said: “Our goal is to be the best of M&S in every store and these kiosks do that in a convenient and practical way, whilst also providing inspiration and choice. We’re encouraged with the customer feedback we’ve received so far and the performance we are getting from these devices.”
The Polytouch is a multi-channel solution that offers an innovative and interactive customer experience, designed to increase sales and interaction with the Marks & Spencer website.
Martin Smethurst, head of retail at Wincor Nixdorf, said: “The terminals allow the brand to offer an extended range of items, online as well as in-store, and more detailed product information at the point of sale. We are delighted that M&S chose us as they recognised the added value of dedicated quality assurance resource on the Polytouch product, and the full time project management we could provide. We hope all this will help M&S deliver the best retailing experience to its customers.”
Carrefour is teaming up with investors to buy 127 shopping malls in which it runs stores, in a $2.8 billion deal that marks the French retailer’s latest attempt to revive its struggling European hypermarkets.
The world’s second-biggest retailer behind US group Wal-Mart has been battling for years to turn around its core hypermarket business as time-pressed customers increasingly shop locally and online, and buy non-food goods from specialists.
Chief executive Georges Plassat has had some success with a drive to revamp stores, improve price competitiveness and cut costs.
Under the deal, Carrefour and a number of unidentified institutional investors will buy the shopping malls in France, Spain and Italy from real estate group Klepierre for €2 billion ($2.8 billion). – (Reuters)
Primark says it wants to capitalise on a “huge expansion opportunity” across Europe as it opens its doors for the first time in France.
The discount fashion retailer opened a store in Marseille on Monday, attracting crowds of shoppers as it offered its cut-price t-shirts, jeans and pyjamas to the fashion-conscious French for the first time.
Primark has been one of the retail success stories of the last few years in the UK as cash-strapped shoppers have increasingly turned to their retail chain for their clothing. In six months to September 14 its sales rose 22pc to £4.3bn.
The retailer has already successfully launched in Germany, Spain and Portugal, but Primark’s opening in France marks a new phase of its expansion given the country’s reputation for high fashion.
However, John Bason, the finance director of Primark’s parent company Associated British Foods, said the discount retailer is confident it will be a success in the home country of Louis Vuitton after its experiences in the rest of Europe.
“Primark is a follower of fashion and provides fashion at the best prices on the high street,” he said.
Primark already has deals to open a further four stores in France by Spring 2014, including three in the outskirts of Paris. The company plans to open 20 stores across Europe during the next 12 months.
Mr Bason said that Europe offer a “huge expansion opportunity”,
The most popular items at the Marseille store, opened by the mayor of the city, are expected to be a range of children’s pyjamas which cost €5 (£4.22), women’s skinny pencil jeans costing €8, and men’s hoodies priced at €12.
“The approach that Primark takes to each market is that we are essentially trialling. We trial various locations,” Mr Bason said. “The experience we’ve had gives us confidence [it will work].”
The Marseille store is based in the Grand Littoral shopping centre and covers 62,800 sq ft, a similar size to Primark’s average UK stores.
Last year, the combined wealth of the world’s 50 wealthiest Arabs stayed almost exactly the same as it had done in 2011. This came as something of a surprise, given the economic strength of the Gulf region – where the majority of our entries are based – and the signs of recovery witnessed elsewhere around the globe. Fast forward to this year and it’s abundantly clear that the largesse accumulated by the planet’s richest Arabs is back on an upward march. In total, the names you are about to see over the next few pages are worth a combined $266.21bn, a 3.5 percent increase on the year before. To put that figure into context, these 50 names alone are worth as much as the entire economies of Egypt or Hong Kong.
Much of that rise has been pushed by our number-one entry, Prince Alwaleed Bin Talal Al Saud. Over the last ten years of the Rich List, he has been the top-placed figure each year, and if anything the gap is widening. The Kingdom Holding chairman grew his wealth by just over 20 percent in the course of 2013 – helped by a canny investment in Twitter that has paid off in the billions after the social media firm went public in November.
Elsewhere, Mohamed Bin Issa Al Jaber also had a stellar year, with his wealth of $12.66bn a huge rise on the year before. Last year’s second-highest entry, the Olayan Family, has been pushed down to number three.
Kiehl’s, the premium skincare brand, is to double its presence in the UK with plans to open a further 24 stores within five years.
The upmarket brand, which has been owned by L’Oréal since 2000, is to expand in the UK as part of plans to triple the business globally in the next three years.
James Rickards, general manager of Kiehl’s, told The Telegraph that from its existing 26 stand-alone stores, he is hoping to have 50 open by 2018.
Recent openings include shops in Belfast and Brent Cross, north London, with plans for new stores in Glasgow and London. “We’ve tripled the business overall in the last three years and [want] to do the same in the next three,” said Mr Rickards.
The business, founded as an apothecary in New York’s East Village in 1851, now has 1,200 points of sale in approximately 40 countries. Of the 1,200, some 300 are stand-alone shops with the rest being concessions in department stores such as Selfridges and Bloomingdale’s.
In the UK, the brand has gone from having just 13 freestanding shops two years ago. Unusually for a major skincare brand, Kiehl’s spends no money on advertising and instead grows by word of mouth.
Its stores contain many of the hallmarks of the still-standing original store, including a large wooden cabinet containing samples of all its products, and a skeleton, known as “Mr Bones”.
The business was started by John Kiehl, a homeopathic pharmacist, then passed to an apprentice, Irving Morse, whose descendants ran the business until its sale to L’Oréal.
At that stage, Kiehl’s sales stood at $30m (£18.4m), against an expected $500m this year.
Shoe retailer Pavers has made an 11th hour rescue offer for footwear chain Barratts, which fell into administration last month for the third time in four years.
Barratts hired financial advisers Duff & Phelps as administrators in November, risking 1,035 jobs, after failing to secure a £5m cash injection from investors in difficult trading conditions.
It is understood that Pavers, which is being advised by accountancy firm Ernst & Young, is offering more than the £5m and has put in a final offer for the business. Pavers is keen to seal a deal soon, in order to retain staff and as much stock as possible. The rationale for Pavers weakens if the business ends up as just empty stores, it is thought.
Barratts has started deep discounting in closing down sales across its 75 UK and Irish stores. If Barratts shuts up shop, Pavers is unlikely to be interested in acquiring the entire retail estate.
The family-owned Pavers, which is headquartered in York, has made a leap from starting out on a £200 loan in 1971 as a door-to-door seller of comfortable shoes, to becoming one of India’s fastest growing retailers.
The Indian unit, called Pavers England, uses its British branding to position itself as a luxury retailer, and plans to add 120 stores to the 40 shops it runs in the region.
Paver’s UK business, which focuses on selling comfortable shoes to middle-aged Britons, has 950 staff across 32 stores and 120 concessions. The group reported turnover of £63m and pre-tax profits of £5.3m for the year to Jan 2012.
Barratts has had a troubled history since beginning life as a rescued buy-out from Dolcis Shoes. Barratts owner Stylo fell into administration in 2009 but boss Michael Ziff bought back 160 shops from administrators Deloitte. The firm’s concessions business collapsed two years later but a buyer was found to rescue 89 stand-alone stores.
Six new stores have opened in Dublin, creating 100 new jobs.
Jervis Shopping Centre, on the north side of Dublin city, said the new shops are open for Christmas shoppers.
The shops include Irish retailer Carraig Donn, fashion accessory store Parfois, Cherry Crystal which sells crystal jewellery, eateries Kay’s Kitchen and Waffely Good, and The Flower Factory.
Centre manager Derek McDonnell said: “We are absolutely thrilled to announce these exciting additions to our centre, which have all enhanced our already-vibrant retail mix.
“Not only have we an exciting choice of shops and stores to offer our customers, it has created over 100 new jobs in the process, something which I know is very welcome, particularly at this time of year.”
The centre is already home to stores including Ireland’s only Forever 21, the world’s largest New Look, and the biggest Next outlet in the city centre. Home
Suzanna Harlow was yesterday promoted to Debenhams board of directors, becoming the first female board-level executive director at the department store.
Harlow has worked at the retailer since 1994, and as group trading director since 2008.
Nigel Northridge, chairman of Debenhams, said: “We are delighted to welcome Suzanne to the board. We have made significant improvements to our customer proposition under her direction and we look forward to her continued contribution to all aspects of the business as a member of the board.”
The news was announced as the retail industry faces continued pressure to appoint more women to the boards of UK businesses. Writing for My-Retail Media, former chief executive of The Garden Centre Group, Nicholas Marshall last week called on retailers to realise “a huge reservoir of, as yet, untapped talent” by underrepresenting women in the workplace.
Will SA retailers follow Woolworths and pull out of Nigeria?
Thursday, 12 December 2013 13:35 Published by eProp Commercial Property News
In fact, Broll expects more South African retailers, especially value retailers, to seek opportunities in the Nigerian market in the coming months and years.
“Yes, doing business in Nigeria is a challenge. But if you can offer middle class Nigerians the right price, product, service, quality and choice, the sky is the limit,” says Norman Sander of Broll Nigeria, who manages Ikeja City Mall in Nigeria.
South African retailer Shoprite is notching up exceptionally strong trading at Ikeja City Mall, according to Sander.
Sander says South African retailers should be prepared to change their models for the Nigerian consumer. If they do so, they stand to gain a firm foothold in a marketplace in a country where consumers are brand loyal and value good service, which is in short supply.
He adds the Nigerian market is vastly different from that of South Africa and its neighbouring countries. “Research is essential to understanding this unique set of consumer needs and norms, before venturing into this exceptional territory.”
Broll is increasingly being called upon for its professional property services and insights to support retailers and property owners alike seeking to unlock the many retail opportunities in Nigeria.
“The market and spend needed for retail success is here and growing. Retailers wanting to crack this market need to customise their models to meet the unique consumer needs and aspirations,” says Sander. He also notes the call of the mall is gaining the support of more Nigerian shoppers.
“Nigerians enjoy a first-world shopping environment that is pleasant, safe, cool, unrushed and offers a complete retail experience from shopping to relaxing at the food court. Mall dwell times are increasing and foot counts are growing.”
Sander offers a few suggestions that Broll has picked up for retailers planning to enter the Nigerian market, starting with using a cash-based model initially, rather than counting on sales from accounts or cards.
He explains that there is little, if any, brand recognition for South African retailers in Nigeria, where consumers are more familiar with US and European retailers. This requires a marketing strategy that goes beyond advertising store opening and extends to launching a new brand.
The markets’ buying patterns are also different to what South African retailers are used to.
For fashion, there’s no seasonal shopping – Nigeria is hot year round. Sizes are also important and different to Europe and South Africa. Some 50% of men’s shoe sales are sizes larger than size 10. And, while there’s a market for luxury goods, prices that are noticeably above those of Europe won’t be tolerated.
With the mobile phone boom in Nigeria, and an increasingly tech-savvy population, Sander says digital and social media marketing are effective tools for retailers.
“Offering guarantees and sticking to these promises is a tremendous way of growing customer loyalty,” says Sander. “We’ve also found that give-away events enjoy great participation at Ikeja City Mall. At first journalists were genuinely surprised to find that these were fair and above board.”
Despite all the opportunity, Sander cautions that retail in Nigeria is not for sissies. “Mall rentals are high because of infrastructure and development costs which, in turn, demands high turnovers. Infrastructure is poor, red-tape is plenty and officials often interfere. The supply chain also takes far greater focus, with a host of potential obstacles to be navigated.”
Sander explains that retailers will need excellent warehousing to overcome shipping issues in Nigeria, where goods don’t move as fast as they do in South Africa. “The choice of clearing agents is important and there is often a price attached to clearing goods,” notes Sander. Yet, with all these challenges, Nigeria’s retail opportunities keep on growing on the back of mass urbanisation, the emerging middleclass, rising retail awareness and an increasing consumer culture.
“For retailers who are prepared to develop a country-specific model and invest in research to support a supply chain, the right stock, the best price and service, there’s a bright future in Nigeria,” says Sander.
He adds that right now there’s a massive gap in the market for homeware retailers.
British lifestyle clothing brand, Joules, is opening its first airport store at London Gatwick’s South Terminal.
The unit, which opens on December 13, is the brand’s first in an airport and, if successful, there are plans to roll more out across the UK’s airports in 2014.
Blackjack Promotions has supplied retail sales assistants to get the store up and running for the first five months.
Tom Joule, CEO of Joules, said: “We are thrilled to be opening at Gatwick. With so many people coming and going, it has a truly vibrant atmosphere we can’t wait to become a part of.”
Due to popular demand, Cotton On Body opened their second stand-alone Cotton On Body store in South Africa at Blue Route Mall, Tokai, on 7 December 2013.
To date, South Africans have only been given a small taste of Cotton On Body, which was part of the Cotton On Group Mega Store and has since launched a stand alone store in Menlyn, Pretoria. The new Cotton On Body Blue Route store will stock the full Cotton On Body range including fun flirty Intimates, Sleep, Active and Swim.
Cotton On Body was born to provide a fresh and new approach to the intimate apparel industry. In addition, the Cotton On Body ACTIVE range will be available at the new store.
All about living in the moment, Cotton On Body is about celebrating a healthy, outdoorsy, active lifestyle while having fun. South African women can look forward to receiving the complete offering of Active, Swim, Intimates and Sleep; every woman’s top drawer essentials can be found at Cotton On Body Blue Route Mall, Tokai.
The store will be located at Shop F224 & F224A Blue Route Mall, 16 Tokai Road, Cape Town. The doors to the Cotton On Body store officially opened on 7 December 2013.
A number of large retail chains in South Africa announced that they will not open for business on the day of Nelson Mandela’s funeral.
The late peace icon will be buried on Sunday, December 15 at Qunu in the Eastern Cape.
According to a Moneyweb report, the retailers say they want staff and customers to be able to follow the funeral proceedings.
Massmart, Woolworths, Clicks, Nedbank and Virgin Active gyms have all confirmed that they will not be trading on Sunday.
Massmart operates a number of different chain stores which include Builders Warehouse, Builders Express, Builders Trade Depot, Builders Superstore, CBW, Cambridge Food, Dion-Wired, Game Stores, Jumbo Cash & Carry, Makro, Rhino Cash & Carry shops. These will all be closed on Sunday.
The Spar Group says that its stores are independently owned and the decision to trade will be left to the individual owners.
Pick ‘n Pay and Shoprite/Checkers will make a decision later this week on whether or not to trade.
Fifth & Pacific on Tuesday announced the sale of Lucky Brand Jeans as it looks to focus its resources on what it describes as “the huge opportunity at Kate Spade”.
Private equity firm Leonard Green & Partners LP will spend USD 225 million to acquire Lucky Brand Jeans, USD 140 million of which will be paid in cash, and the remaining in the form of a three-year seller note.
It’s well known that Fifth & Pacific is keen to turn its attention to Kate Spade, after announcing the sale of its Juicy Couture brand to Authentic Brands Group in November.
Speaking back in November, Fifth & Pacific group chief executive William McComb said that after assessing the market values of its Juicy and Lucky brands, the group “concluded that the best way to increase shareholder return would be by monetizing the value of Juicy Couture’s powerful trademarks today to further de-risk our company and its ability to execute over time.”
McComb added: “Ultimately, this is all about bringing Kate Spade to its full potential.”
The chief executive echoed this sentiment on Tuesday, stating: “We believe that by focusing all of our resources on the huge opportunity at Kate Spade, we can deliver the strongest value creation opportunity for our shareholders.”
Fifth & Pacific said it expects the Lucky Brand deal to close in the first quarter of 2014.
Louis Vuitton is centrally heaquartered in Paris but also has an outpost in the UK Photo: REX
Louis Vuitton will be the first company to inhabit the Gidiron building at One Pancras Square when it decamps some two miles from Bond Street, Mayfair to King’s Cross.
Formerly a red-light district, the area once simply known for its seedy night activities and trains serving the north of England, has benefited aggressively regenerated. It is now home to the beautifully restored Renaissance Hotel, Central Saint Martins College of Art (alumni include Sarah Burton of Alexander McQueen and Stella McCartney) and conveniently for the Paris-based company – the Eurostar, which whizzes passengers to the Fench capital in just over two hours.
Vuitton have chosen a 10,000 sq ft space on the fifth floor of the building, which has been designed by David Chipperfield Architects.
And they’re not alone – Google and French bank and financial services company BPN Paribas have also committed to the development.
Louis Vuitton recently appointed former Balenciaga creative director Nicolas Ghesquière to take over from American designer Marc Jacobs, who left the fashion and luggage house in October after 16 years.
2013: The year in retail
This year we saw retailers integrate social into every aspect of their business, from using Twitter and Facebook to market to and engage with customers to implementing social CRM to drive customer insights.
The most successful retailers are investing in content and social media as they attempt to bridge the gap between physical and digital commerce. As competition rises, creating a two-way dialogue with customers is more important than ever in impacting the purchase journey, driving loyalty and ultimately boosting revenues.
Trust and how to lose it
The year started badly for food retailers with the horse meat scandal. Meat products from burgers to lasagne sold by companies including Tesco, Iceland and Aldi were found to contain horse meat, prompting an investigation by the Food Standards Agency.
All of the brands directly linked to the scandal attempted to quell growing public disquiet by launching press campaigns or online initiatives. However, brands’ reputations were hit in the wake of the crisis, with the majority of UK supermarkets suffering a drop in perception.
Morrisons was a notable exception. No horse meat was found in its product and it took this as opportunity to highlight its quality and provenance, key to building consumer trust.
Tesco waded into the at-checkout price matching arena this year, launching its “Price Promise” scheme in a bid to take on Sainsbury’s “Brand Match”. The two firms immediately clashed, with Sainsbury’s accusing its rival of making unfair comparisons and referring Tesco to the ASA. That complaint might have been rejected but it has since lodged legal proceedings.
Meanwhile, Asda’s CMO accused both firms of being “anti-competitive” by trying to match each others’ prices, rather than beating them.
Price remains a huge part of the marketing mix for retailers, particularly in the grocery market, which is more competitive than ever as the big four face pressure from both the high end and the rise of discounters such as Aldi.
M&S, a tale of two businesses
M&S’s food division goes from strength to strength and market share and sales are rising. Its general merchandise division, which includes fashion, however, continues to see sales drop.
The retailer has focused on marketing to turn this around, launching its “Leading Ladies” campaign and revamping stores. However, so far these have had little impact. All eyes are on its performance at Christmas.
High Street Recovery?
With the economy improving, hopes were that high street retail would pick up this year. However, as yet there is little sign of this as consumer incomes remain squeezed and online continues to steal revenues. A report earlier in the year suggested that one in five high street stores could shut in the next five years as consumers increasingly shop online. Plus high street retailers are still going into administration, with Blockbuster the latest casualty.
Convenience is king
Convenience is the new front in the battle for dominance in the retail world as companies look for ever more convenient ways to get their goods to customers. Click and collect is increasingly popular with both consumers and retailers. Ebay’s deal with Argos to open pick-up points, Asda’s plans to open collection centres at tube stations and Waitrose’s launch of automated temperature-controlled lockers are just a few examples
In delivery, retailers are aiming for faster turnarounds and tighter time slots. Supermarkets will now let customers pick one-hour periods while eBay and Amazon are trying to make same day delivery work. Amazon took this further than anyone else this year, claiming that in five years there might be unmanned drones flying around major cities delivering packages.
Christmas campaigns as events
Retailers played it safe in their festive ads this year, keen to avoid the complaints in the crucial Christmas period that some suffered from last year. Most notable in 2013 was Sainsbury’s campaign, which moved away from its usual focus on product to promote a 50-minute film that reveals how Britain celebrates Christmas.
Elsewhere, John Lewis yet again captured the heart of the nation with its animated story of the bear that has never seen Christmas. It is making a concerted effort to exploit interest in its ad this year, selling merchandise ranging from onesies to bear and hare cuddly toys.
Tesco went down the nostalgia route, while Morrisons chose gluttony, advertising a festive spread fit for an army. Asda eschewed the spirit of Christmas, instead to choosing to take digs at its rivals.
Mike Coupe, group commercial director, Sainsbury’s
More savvy customers with better values: You don’t need a crystal ball to see that many households will continue to struggle in 2014. Household budgets will remain under pressure and until we see an uptick in employment, the much-vaunted economic recovery won’t boost consumer confidence overall.
But shoppers are becoming increasingly savvy and better than ever at finding value. This doesn’t always mean the lowest price possible; customers increasingly expect the right choices in product quality, and the right values in terms of provenance and ethics. We call this the ‘value of values’ and I think we’re all going to be talking more about it in 2014.
Jo Causon, CEO, Institute of Customer Service
Customer service in the boardroom: The explosive growth of multichannel retail will place further emphasis on choice for the customer, shifting dialogue with retailers and fellow shoppers to mobile, tablet and PC alongside more traditional phone, written and face-to-face methods.
The value of recommendation will continue to gain weight as people interact with social media as they browse, using it to inform their shopping decisions. Retailers that focus on customer satisfaction will reap the rewards, but it’s not just what happens on the sales floor; 2014 will see customer service move decisively to the boardroom as a critical strategic element of business success.
Jeremy Michael, managing director, Service Management Group
Holistic shopping experiences: In-store customer service will be a priority for retailers in the face of showrooming. With customers able to compare prices online via their mobile devices, brands must create loyal customers that not only return, but recommend.
Luring in customers with discounts is a popular short term approach, but dilutes brand value, as too much focus is paid on getting customers to the store rather than focusing on them once they are in the store. Next year will see a rise in stores creating a holistic shopping experience and focussing on customer service in order to differentiate themselves and increase loyalty.
Kieran McBride, partner, Joylab
Smarter omni-channel retailing: With the surge in mobile adoption and the evolution in delivery/returns options, omni-channel is a real proposition. The consumer has been empowered to choose whichever purchasing channels they prefer, using a mix of devices and offline interactions to research and complete that purchase. Marketers have lost the ability to refine and control the consumer journey.
The only way to capture custom is to provide better service, incentivise, and reward. Ensure there are no gaps in your multichannel offering. Take an evidence-led, research-based approach to design and development. Be agile, iterate and adapt to the changing consumer market. Give the consumer what they want.
Darryl Adie, managing director, Ampersand Commerce
A refocus on the high street: Next year, the high street will be central to both online and bricks-and-mortar retailer success. Online retailers will eye up the high street to establish a physical presence, through pop-ups or more permanent showrooms.
Traditional retailers will continue to develop in-store value propositions that trump online, such as delivery times of as little as 90 minutes thanks to their closer proximity to customers. Click-and-collect will move from being a differentiator to being a hygiene factor for high street retailers as consumers’ expectations continue to grow.
Australian luxury retailer makes debut in Gulf
Australian luxury accessories and lifestyle brand Oroton has added another milestone to its 75-year history with the official launch of its first boutique in the Middle East in Dubai.
Located at the new extension of Al Ghurair Centre, in the heart of Deira, it follows the opening of international stores in Asian markets such as Hong Kong, China, Singapore and Malaysia.
Oroton CEO and managing director Mark Newman said he expected the store to be one of many in the UAE.
“We are delighted to have had the opportunity to partner with BAIS fashion in the opening of our first store in the UAE in Dubai at the Al Ghurair Centre,” he said.
Reflecting the elegant sophistication of the brand, the new store at Al Ghurair Center resembles a glass jewel box, with a façade comprising golden monogrammed “O” tiles.
The name “Oroton” stems from “Oro”, meaning gold, and “Ton” implying tonnes of gold.
Grant Parnell, general manager, BAIS Fashion, said: “We are very happy and proud to partner the Oroton Group in the Middle East, and we strongly believe that this iconic Australian brand will perform exceptionally well in our market, as it has done in Australia and other markets where it is available.”
He added: “During the last five years, the Middle East has risen to the forefront as a rapidly emerging market in terms of fashion. Dubai specifically is the standard bearer in this regard.
“Research also tells us that there are only a handful of brands which fall into the ‘Affordable Luxury’ category. We believe there are a large number of consumers who would benefit from the introduction of this wonderful brand into our market.”
As part of the launch and to celebrate its 75-year milestone, Oroton showcased its Winter 2013/14 Collection in Dubai.
In a nod to its origins, the brand has chosen pieces from its signature mesh and gold.
The collection takes inspiration from Australia’s fauna, sun-drenched skies, and vivid landscape, depicting the country’s unique environment.
Also, the use of materials like stone, brushed metals, and natural wood, has been influenced by 1970s Australian architecture.
Founded in 1938 in Sydney, Australia, Oroton says it combined “chic simplicity with playful design essence” to produce a wide range of products for men and women, including handbags, small leather accessories, sunglasses, jewellry, apparel and shoes.
Every collection is designed in Sydney at the hand of GM & Creative Director Ana Maria Escobar. “We are very excited to see Oroton expand into another new market, especially one where the customer is fashion savvy and appreciates unique and distinctive designs,” Escobar said.
Oroton now has 58 stores in Australia, as well as nine in Asia and two in New Zealand.
The Spanish fashion retailer is to debut a new plus-size line, Violeta by Mango, in early 2014. The range, dubbed a ‘youthful fashion collection’ will come in sizes 12 to 24.
It will launch online in the UK on January 15 and in store in its seven largest markets: France, Germany, Italy, the Netherlands, Turkey, Russia and Spain.
The star of the campaign is Australian plus size model, the statuesque 6ft 2″ Robyn Lawley (though admittedly only her pert derrière is visible in this teaser shot) who also boasts her own line of swimwear.
READ Daria Werbowy for Mango
Lawley spoke to the Daily Mail last week on the set of a shoot with Rankin for her agency, MILK Management. “I am the perfect shape for plus-size modelling. I don’t feel any pressure to lose weight as I’ve been this size for years now and I don’t want to change or diet,” she said, “I enjoy exercising and being able to eat foods I like.”
However, she does believe that the plus-size industry is a double-edged sword as on the one hand “there are some opportunities I wouldn’t have had otherwise. But there are also less jobs available, particularly in mainstream and high-end fashion.”
Aimed squarely at a “modern and demanding woman who wants to feel attractive, sexy and fashionable,” the 400-piece Violeta collection has been designed to feel “comfortable, feminine and modern.”
According to the brand, technical pattern details were paramount and to this end, it assembled a crack team of “up to 40 experts in various disciplines.” In addition to the initial 400 garment launch, the line will be an ongoing concern with new products being added every month.
Lawley is in good company: the current face of Mango is Daria Werbowy and previous faces of the brand have included actresses Scarlett Johansson, Penélope Cruz and Diane Kruger and supermodels Kate Moss, Naomi Campbell, Claudia Schiffer and Miranda Kerr .
L Capital has gone on shopping yet again. LVMH’s investment vehicle has sealed the acquisition of a 40 percent stake in Australian sports fashion brand 2XU at 75 million Australian dollars. LVMH’s top executive for the Asian market has valued the brand in circa 200 million Australian dollars.
2XU and Lazard Private Equity’s choice of L Capital Asia as an equity partner was based on “a shared vision” as they expect L Capital Asia to provide 2XU with a valuable consumer markets understanding and access to global markets.
“We will build a bridge to Asia” for 2XU, Ravi Thakran, group president for LVMH in south Asia, Southeast Asia and the Middle East, in an interview with DataRoom. “We have knowledge of brand building and will keep 2XU distinct, as we do with all our brands,” he advanced.
Thakran has valued 2XU at 200 million Australian dollars. This is the second foray into the down under’s active-wear market for L Capital this year, after buying a stake in the Australian outdoor clothing company R.M. Williams.
2XU’s founders to cut their stake to allow L Capital investment
2XU’s founders Clyde Davenport, James Hunt and Aidan Clarke have agreed to reduce their participation in the company’s capital, although they’ll remain the main stakeholders with a joint 42 percent stake. “The founders have given up their shareholding to accelerate our growth”, Davenport said. Lazard Australian Private Equity has also reduced its position in 2XU from 30 to 18 percent.
“We are thrilled to have L Capital Asia as a partner,” said 2XU executive chairman and co-founder Clyde Davenport. “We believe that its experienced international team will accelerate us towards our goal of becoming Australia’s first major global sportswear brand,” he added.
Commenting the deal, Thakran said that “We firmly believe that the combination of this strong proposition, with our unique approach to performance enhancement across our portfolio companies will help the brand in achieving its full potential as a strong, globally recognised performance sportswear brand”.
Since founded eight years ago, 2XU has gone from zero revenue to about 65 million Australian dollars this year, proudly explained Davenport, who expects the company to overcome the 150 million Australian dollars landmark by the end of 2015.
2XU has one store in The Philippines, 12 stores in Australia, one in New Zealand and one in the US with plans to open another outlet in the US.
Improvements in infrastructure have helped the UAE overtake South Korea, Chile and Malaysia in a poll ranking countries on the ease of entry for retailers.
The UAE rose four rungs to 11th spot on the annual league table compiled by the consultancy EC Harris.
The ranking of 48 countries is based on the quality of infrastructure, the capability of the construction supply chain, the legal framework, the quality of project delivery and the business environment.
The consultancy raised its ranking of the UAE’s infrastructure by 21 per cent from last year, while its rankings for most of the other categories remained broadly similar to last year’s. That reflects the country’s improving logistics facilities in areas such as Jebel Ali and Kizad.
However, the UAE’s rating for project delivery fell 15 per cent, as some planned retail schemes remained postponed because of the global financial crisis.
Chris Seymour, EC Harris’s head of UAE property, said retailers were increasingly seeing the benefits of expanding into the UAE and the Middle East because of the strong consumer base, high levels of wealth and established construction market.
“Successful retail expansion in the Middle East as a whole relies heavily on the pace of delivery of major programmes and a high-quality store end product,” he said.
Qatar, ranked number seven in the world, was the highest placed Arab country, according to EC Harris. That is a boost of four places from last year following an improvement in its project-delivery capabilities. In contrast, Saudi Arabia fell four places from number eight to 14, slipping slightly in all the categories.
Britain topped the poll this year, as its good infrastructure, legal framework and business environment continued to draw foreign retailers despite struggling high-street sales and the rise of internet shopping.
In contrast, last year’s winner, Germany, slumped into third place behind the Netherlands.
Russia placed last on the poll – behind the hard-to-enter markets of Argentina, Nigeria and Pakistan – despite its lucrative and expanding retail market and status as a so-called Bric (Brazil, Russia, India and China) country.
China, the world’s largest consumer market, received a poor ranking of 23rd position.
“While many of the top ranking countries – including those in the Middle East – are those with established markets and a well-developed consumer base, those that rank lower include developing Bric nations who pose greater risk and reputational damage to retailers,” Mr Seymour said.
In May, the property broker CBRE found that Dubai was the fourth most attractive city for retailers looking to enter new markets.
It had mapped the global presence of 320 retailers across more than 200 cities, and found that Dubai was the world’s second-biggest destination for retailers in which to operate, following closely behind London.
There were 25 new retailer entries into Dubai last year, including the American firms Franklin & Marshall and The Cheesecake Factory.
US OUTDOOR lifestyle brand Timberland, which has 25 stores in South Africa, is opening in Angola and Mozambique this month.
The company, which first launched in South Africa in 1996, has a distributorship and retail development agreement with local firm Keystone Apparel Company, which also owns the rights to high-end men’s label Hackett London in South Africa.
The country has attracted a slew of international brands, many of which are eyeing it as a stepping stone to other sub-Saharan markets.
The fast-growing economies of Africa present a compelling investment case. By 2030, the continent’s top 18 cities could have combined spending power of $1.3-trillion.
Timberland’s brand image, recently renewed, blends outdoor craftsmanship and contemporary design aimed at a younger, millennial customer.
“African expansion is important on our growth agenda … it will include further Angolan openings, Ghana and Botswana,” Timberland South Africa director Abdullah Mayet said last week.
European men’s fashion brand Suitsupply is testing the African waters through its e-commerce website, Africa.suitsupply.com. Payment options have been tailored to include cash on delivery, and processors such as Kenya’s M-Pesa and Nigeria’s Interswitch. The company is eyeing Nigeria, Angola, Kenya and South Africa for store roll-outs.
The launch of franchise stores and shop-in-shops also reduces the potential risk of entering new markets and ensures that a retailer gains local market knowledge. It also enables rapid expansion, where premium sites are scarce.
Senior analyst at London’s Planet Retail, Isabel Cavill, says that for a long time retailers shied away from South Africa because of the logistics and the seasonal differences, although they are now starting to get around these problems by creating ranges that are less season sensitive.
“There are also wholesale opportunities for retailers looking to open in South Africa via a strong department store network.”
Last year, brand management company Brand Capital introduced the Ted Baker brand in South Africa at Stuttafords and it has just launched UK handbag and accessory brand Radley.
Brand Capital CEO Marco Cicoria says: “Our strategy for Ted Baker is based on a three-to five-year plan.
“The first two years we’re looking at a shop-in-shops concept in Stuttafords and then for wholesale we will choose another retail partner, possibly another department store.
“The third phase would then be a careful look at locations for standalone stores.”
With the proliferation of international retailers such as Zara and Topshop expanding in South Africa, local groups are boosting their fashion credibility.
Woolworths last week showcased the autumn-winter 2014 collections of Witchery and Mimco, fashion brands it will bring to South Africa in March. Along with new brands in its arsenal, Woolworths’ enhanced procurement strategy and better relationships with its suppliers has allowed the group to shorten lead times. The up-market player, which wants to be a leading fashion retailer in the southern hemisphere, hopes to emulate the success of its other Australian labels, Country Road and Trenery.
Edcon has also beefed-up merchandising teams and introduced brands such as TM Lewin, Lucky Brand and Tom Tailor.
Noah Capital Markets retail analyst Roger Tejwani says international brands coming into the country collectively added “a little bit” of pressure on local fashion retailers.
H&M will open its first store in South Africa in 2015.
Following the successful introduction of Country Road and Trenery to South Africa, Woolworths will exclusively offer the iconic Australian brands Witchery and Mimco from March 2014.
In October 2012 a Woolworths subsidiary, Country Road Limited, acquired the Witchery Group, including the Witchery and Mimco retail brands. Initially, Woolworths will offer Witchery’s women’s apparel, footwear, and accessory collections, as well as Mimco’s unique accessories and footwear.
As one of the most inspiring of Australia’s big fashion brands, Witchery is a global style authority loved by Australians and New Zealanders since the 1970s. Ahead of the curve, Witchery’s fashion radar casts a worldwide eye, delivering feminine, fashion-forward collections that capture the latest ready-to-wear runway trends.
“The Witchery woman adores fashion and loves to put her own spin on the latest trends to make a stylish, personalised statement. She looks to Witchery for pieces that are fresh, glamorous, edgy and wearable that can take her from day to night, and from work to a party,” says Witchery’s Managing Director, Matt Keogh.
“Our partnership with Woolworths will be instrumental in taking this brand to the next level in South Africa, including the opening of standalone Witchery stores,” explains Keogh.
As an iconic Australian accessories brand, Mimco is at the forefront of delivering accessible luxury with its quirky designs and statement pieces. It celebrates unique design, eclectic styling, quality and collectability. The brand will offer leather and non-leather handbags, evening bags, wallets, tech accessories, footwear, jewellery, timepieces and hair accessories.
Each season, Mimco’s design team creates limited edition pieces to push the boundaries with creative design, materials and styling that offer customers rare and dynamic pieces. These personality-filled pieces will also be available locally.
“Since 1996, we have designed beautiful pieces for women who love to add a touch of glamour to their every day and who understand the value that a unique accessory adds to their wardrobe,” says Mimco’s Managing Director Cathryn Wills. “It’s an exciting time in the Mimco journey and we look forward to offering Woolworths customers the opportunity to discover, explore, and fall in love with our brand.”
Says Woolworths CEO Ian Moir, “Both Witchery and Mimco are strong brands with their own clearly defined points of view. We believe that they will help cement our place as a leading fashion destination and resonate with the South African woman who is looking for fashion that reflects the latest international trends and her own personal sense of style.”
In addition to standalone stores at the V&A Waterfront in Cape Town and at Hyde Park in Johannesburg, Witchery will be available at Woolworths V&A Waterfront, Cavendish Square and Tygervalley in Cape Town, Gateway in Durban, and Menlyn, Brooklyn, Eastgate, Sandton, and Melrose Arch in Johannesburg.
Mimco will have standalone stores at the V&A Waterfront in Cape Town and at Sandton and Hyde Park in Johannesburg, and will be available at Woolworths V&A Waterfront and Cavendish Square in Cape Town, Gateway in Durban, and Eastgate and Sandton in Johannesburg.
Witchery and Mimco will launch in stores from 25 to 27 March 2014.
French luxury good company Hermès has opened its first stand alone fine watch and jewellery boutique in the United Kingdom at the Qatar-owned Harrods department store in London.
The new boutique, opened in the Fine Jewellery room on the ground floor of the iconic Knightsbridge store, will showcase the brand’s most precious pieces from its artisanal watch and jewellery ranges.
The first Hermès wristwatch was created in 1912 for Jacqueline Hermès, at the request of her father Emile Hermès, the grandson of the founder Thierry Hermès.
In 2010 Hermès launched its first collection of Haute Bijouterie, designed by Pierre Hardy and inspired by the equestrian world.
British retailer Warehouse stands to open its first flagship shop on Oxford Street by next year February in hopes of reaching a wider and more international audience. The newly rented store, which offers 2,500 square feet of retail space at 264 Oxford Street used to be a Monsoon store, according to Retail-Week. The new flagship store will use the same store concept that was launched in Trinity Leeds shopping mall beginning of this year, and will include big, airy fitting rooms were customers can try on Warehouse garments comfortably. Paula Stewart, the Brand Director at Warehouse believes that new store concept, which is similar to a ’boutique’ store, with lounge chairs and iPads available for customers to browse the latest collections, sets the brand apart from other high street competitors.
According to a recent research analysis from property consultancy Savills, 78 percent of newly opened stores in London over the past 2 years were rented by international retail companies, making London more of an international hub than ever before and a key location for any retailer to open up a shop.
Chief executive officer for Warehouse and Oasis, Liz Evans told Retail-Week: “Our international growth for Warehouse is fantastic. But one of the challenges we’ve always had is that we’ve never had a flagship store in London to showcase our brand to international franchise partners.” Evans added that the new flagship store is set to attract tourists and will hopefully turn into one of the largest turnover stores the brand owns.
Warehouse opened its first international store in Singapore in 1999 and currently has 423 stores around the global and ships to 44 countries.