Monthly Archives: March 2014
Newly opened in Hamburg is British icon Paul Smith‘s very first retail location in Germany. Situated in an elegant mid-19th century Biedermeier-era townhouse in the city’s historic Altstadt district, the shop carries both men’s and women’s clothing alongside accessories, furniture, and more. Within the stone facade, each room has been uniquely designed to pay homage to the building’s Biedermeier origins as apropos pastel shades of green and lilac appear throughout. Enjoy a look inside Smith’s newest storefront above.
Chinese business tycoon Yuan Yafei is in talks with British department store group House of Fraser regarding a bid that values the company at more than 450 million pounds ($749 million), according to a source familiar with the situation. The proposed take-over, first reported by British newspaper The Sunday Times, was tabled by Sanpower, the Nanjing-based conglomerate founded by Yuan.
The source said that although the talks were advanced there was no certainty a deal would be done.
The 160-year-old House of Fraser, which trades from 61 stores in Britain and Ireland and has annual sales of about 1.2 billion pounds ($2 billion), has been running a dual track sale process – looking for potential buyers while also considering a possible initial public share offer.
Talks about a sale to French counterpart Galeries Lafayette ended in January.
House of Fraser declined to comment. Reuters was not immediately able to contact Yafei for comment.
House of Fraser has a complicated ownership structure, with 49 percent of the holding company Highland Group Holdings owned by the representatives of failed Icelandic banks Landesbanki and Glitnir. Chairman Don McCarthy owns 20 percent, retail entrepreneurs Tom Hunter and Kevin Stanford own 11 percent and 9 percent respectively, Lloyds Banking Group has 5 percent and other management 6 percent.
European coffee house, Caffè Nero, opened its first store in the Republic of Ireland on 13 March, creating eight new jobs. The launch into Dublin represents an investment of €20million into the Irish economy over the course of the next five years, creating a total of 320 jobs.
Headquartered in London, Caffè Nero Group Ltd was founded in 1997 by Gerry Ford. With one of its taglines being, “The best espresso this side of Milan”, the family-owned group is currently the largest independent coffee retailer in Europe, with more than 650 stores, operating across seven countries.
The company operates its own roastery, where it says it creates the unique espresso blend which is the foundation for every cup of coffee it serves.
The European brand has won accolades for the quality of its coffee and the overall Caffè Nero experience, most recently winning ‘best tasting coffee’ on the high street by independent consumer magazine Which? The company is keen to point out that this success is replicated across Europe with the brand performing well in all territories in which it operates. Most recently, in 2013, Green Caffè Nero was voted “the best independent coffee shop brand in Poland” as part of the Food Business Awards.
Speaking about the opening of the new Dublin store located on Merrion Row, Gerry Ford, chairman and founder of Caffè Nero said: “We are delighted to be introducing Caffè Nero and the entire Caffè Nero experience to Dublin coffee drinkers for the very first time. Our premises on Merrion Row allows us to begin the journey of sharing our award-winning blends and the hours of craftsmanship that go into each cup, with coffee lovers at the centre of this beautiful city. We plan to introduce further Caffè Nero coffee houses to Ireland over time.”
Along with serving its handcrafted coffee, Caffè Nero says it aims to bring a European coffee house atmosphere and cosy neighbourhood gathering spot for locals, including local residents, the surrounding workforce and tourists alike.
Japanese fast-fashion retailer Uniqlo is in advanced negotiations to open a 35,000 square foot store at Toronto’s Yorkdale Shopping Centre, according to the Financial Post. Uniqlo is also negotiating to open other Canadian stores, the first of which could open as early as 2016.
Uniqlo’s negotiations with Yorkdale are “are pretty advanced,” according to one source familiar with the talks. The same source says that Uniqlo intends to open both mall-based as well as street-front stores in Canada.
Yorkdale Shopping Centre is in the process of leasing out retail space in a new wing that will be anchored by a 191,000 square foot Nordstrom store. Uniqlo could end up in the new wing alongside Nordstrom, according to lease plans provided by Yorkdale landlord Oxford Properties.
The Financial Post reports that Uniqlo formalized its Canadian trademark in August of 2013, possibly in anticipation of opening Canadian stores.
Debenhams is preparing to open the latest addition to its Baltic expansion with a new store in Riga next month.
The British department store chain will launch a new £2 million store at the Spice mall in the Latvian capital, covering an area of 2,948.5 m. The new store will create 40 jobs, and joins Debenhams’ first Baltic store in Tallinn, which opened last year.
The multinational retailer currently operates over 240 stores in 28 different countries through a number of franchise agreements.
SuperValu breathes down Tesco’s neck after Superquinn rebrand
Tesco is perilously close to losing its pre-eminent position in the Irish supermarket sector with the latest figures from retail analysts Kantar Worldpanel indicating that its market share has fallen again while both Aldi and Lidl outperform the market.
The research published this morning, shows that Aldi and Lidl are growing while the market as a whole is shrinking. The German discounters have seen their market share increase by 1.4 and 0.8 percentage points respectively.
SuperValu is now the State’s Ireland’s second largest grocer after last month’s rebranding of 24 Superquinn stores to SuperValu’s fascia. The supermarket share figures cover the 12 weeks ending up to March 2nd and show that it now accounts for just over 25 per cent of the total market. Tesco remains the most popular retailer although the gap between first and second is now little more than 1 per cent.
“Bringing 24 Superquinn stores under the SuperValu banner has enhanced the retailer’s position as a major player in the grocery market,” said Kantar Worldpanel’s commercial director David Berry. “SuperValu now accounts for 25.3 per cent of Irish shoppers’ grocery market spend, just 1.1 percentage points behind Tesco. Its sales have remained broadly in line with the market, which shows that it has been able to retain its market share while acquiring assets.”
He said the main challenge for SuperValu was to convince previously loyal Superquinn shoppers of the merits of its brand and “ultimately hold onto their custom”.
Although the overall grocery market has declined for the fifth successive month, Aldi and Lidl continue to impress with retailers are delivering double digit sales growth and increasing their overall market shares by 1.4 and 0.8 percentage points respectively.
“Over the past three years Aldi and Lidl have captured a combined 3.8 share points from the competition, and have grown sales by 37 per cent in an overall grocery market which has grown by just 1 per cent,” Mr Berry said. “Conversely, Tesco and Dunnes have both experienced declines in market share and actual sales as the result of the pressure exerted by the increasingly competitive market place.”
Last month saw the grocery market’s weakest performance since September 2011 with sales declining by 0.6 per cent. Falling inflation has played a significant part in this as vegetables and bread, two important staple items, are now cheaper than they were last year.
Grocery inflation stands at 1.7 per cent for the 12 week period ending March 2nd down from 2.9 per cent over the previous 12 weeks and the lowest level since April 2012.
ARROYOMOLINOS, Spain – At the Xanadu shopping mall in Madrid’s suburbs, the indoor ski slope is busy with children but the designer stores are quiet. In this former mecca for high spenders, discount shop ‘Lefties’ looks like just another post-recession pop-up budget brand.
In fact the store belongs to the world’s biggest fashion retailer Inditex – and may be its secret weapon to lure back austerity period shoppers who have turned away from its fashion brand Zara to the cheaper styles of H&M and Primark.
Since the 2008 financial crisis, mid-market retailers in developed markets have lost ground to both discounters and high-end brands as shoppers economize on basics, while treating themselves to the odd luxury.
Inditex does not break out sales figures for either Lefties or its Zara stores in Spain. But it has shrunk the number of its Zara stores in Spain from 514 in 2008 to 469 at the end of 2012 while adding five or six Lefties stores a year “in recent years”, according to a spokesman. Lefties now has 86 stores in Spain and 16 in Portugal.
With consumers now wearing Primark fashions alongside luxury labels, Inditex may be changing the mix of its stores to test the waters of this new, evolved retail market, said one sector analyst.
Inditex’s sales in Spain dropped 5.5 percent in 2012, to 3.5 billion euros, and accounted for only 21 percent of total sales against 37 percent in 2007 as the group has grown fast in emerging markets.
By contrast, Sweden’s H&M and British Primark expanded fast in Spain during that time, as unemployment topped 26 percent and retail sales shrank steadily in the 2011-2013 period. Both brands have much lower average prices than Zara.
H&M’s sales in Spain rose 5 percent to 6 billion Swedish crowns ($940.39 million) in 2013 compared with a year earlier, while its number of stores rose to 156 from 146 in the same period. Primark, owned by Associated British Foods, has grown to 39 stores since arriving in Spain in 2006.
Together their total outlets are still dwarfed by Inditex’s total of 1,900 for all of its brands, but H&M and Primark’s offering makes them well placed to capitalize on the latest shopping trend: Though Spain’s economy is slowly healing, consumers remain frugal as companies freeze or cut salaries.
“No one has any money to spend,” said Mercedes Granda, 38, having a coffee with her mother Laura in Xanadu mall. “At first I didn’t fancy shopping in a cheap store like Primark. Then I got used to it. I think the quality is good.”
John Bason, chief financial officer of Associated British Foods, insists Primark is not dependent on hard times for growth but acknowledges that Spain’s low-cost niche was underdeveloped.
“What Primark has demonstrated is the potential for growth of the value segment in Spain,” he said.
For now Inditex barely acknowledges the existence of Lefties. The 21-year-old brand, created to sell Zara’s leftover last-season rejects, is not promoted on Inditex’s corporate website. Two foreign investors in Inditex told Reuters they weren’t aware of the brand.
And yet in recent months Lefties stores have been redesigned. Gone are the dim rooms with haphazardly laid out tops and trousers where shoppers rifled through odd sizes. Instead attractively bright units display new Lefties-branded clothing lines, surrounded by posters and TV screens on which models show off designs.
“Women’s shorts from 9.99 euros. Kids’ knitwear from 7,” reads the tickertape display above the entrance to the Lefties store in the Xanadu mall.
Behind the scenes, Lefties is recruiting designers, pattern makers and buyers to report to its new head Xavier Ruz – formerly of Inditex’s teenwear brand Bershka, who was appointed in January. The label has also just launched its own newly designed website.
Inditex declined to provide information on its Lefties strategy, investment or sales figures.
But with the boost to its stores it is clear that Lefties is taking a larger share of its parent’s Spain strategy.
“I think it’s only a matter of time before Inditex treats it as a separate brand and breaks out its figures,” said Carlos Hernandez from retail consultancy Planet Retail.
MALL TO HIGH STREET
Two-thirds of the Spanish Lefties are in shopping centers, where sales have plummeted 25 percent since 2007.
It will be taking on a very confident Primark, which is seen now as a desirable tenant for such malls, said David Brown, associate director of retail capital markets for real estate company JJL.
“In some centers footfall has increased by up to 30 percent after Primark entered,” he said.
Hernandez at Planet Retail noted that Inditex was replacing some of its Zara stores with Lefties – where the goods cost a third less – in poorer areas.
“You have a clearly impoverished society – people who can’t afford to pay 30 euros a blouse in Zara and unfortunately we’re talking about millions of people.”
Already there are signs that the low-cost battle is moving from the malls to the streets. Madrid Mayor Ana Botella has announced that Primark will open a store on Madrid’s Gran Via, a major shopping avenue in the heart of the capital.
Hernandez believes Inditex has every incentive to treat Lefties as a separate format – and roll it out abroad too.
“I think they could export the brand to other countries where Inditex has a large presence like the UK and Germany,” he said. “Spain is not the only country where the crisis has taken its toll
Dubai: Community mall Oasis Centre, owned by retail and hospitality conglomerate Landmark Group, will open seven new properties by the end of 2015, bringing the total number of malls to 12, according to Neelesh Bhatnagar, director of Oasis Centre.
Bhatnagar was speaking at a press conference in Dubai on Tuesday.
There are currently five Oasis Centre properties, one each in the UAE (Dubai), Saudi Arabia and India, and two in Bahrain. According to Bhatnagar, there are no immediate plans to open properties outside the region.
“I don’t foresee Oasis going out of the Gulf Cooperation Council (GCC) countries in the near future, not at least in the next three to five years. Once [Landmark’s] business grows in Egypt and Iraq, that’s the time we will look at taking Oasis Centre out of these cities,” he said.
Sharjah and Muscat are expected to have one mall each, while Saudi Arabia is set to have five. The malls in the kingdom will be in cities that “lack organised retail.”
“I am sure that in the future there will be many more Oasis Centres coming up in Saudi Arabia,” Bhatnagar said.
While Oasis Centre accounts for a small percentage of Landmark’s turnover, it is expected to command around 15 per cent in the next five to 10 years, Bhatnagar said.
“Community malls are going to form a key component of the retail scenario in any country,” he said.
With an occupancy rate of between 97 and 98 per cent, up to 75 per cent of tenants at Oasis Centre in Dubai are Landmark-owned brands.
Oasis Centre in Dubai saw footfalls increase by 11 per cent last year compared to 2012. By the end of this year, it is expected to go up 10 per cent.
The mall will continue to focus on its retail offering, followed by wellness, food and beverage and entertainment, which account for 25 per cent of the mall’s space.
Nakheel on Tuesday announced plans for two new shopping destinations, offering a total of 1.5 million sq ft of retail space in Dubai.
The Dubai developer revealed plans for a 1 million sq ft regional shopping mall in Jumeirah Village Triangle and a 500,000 sq ft mall in Jumeirah Village Circle as part of its growing portfolio of retail projects.
The regional mall, located on Al Khail road, will feature a 15 screen cinema, an 80,000 sq ft hypermarket, an entertainment area, a department store and a selection of retailers, restaurants and cafes, Nakheel said in a statement without giving a value for the retail projects.
The mall will serve Nakheel ‘s communities including Al Furjan, Jumeirah Park, Jumeirah Village as well as Al Barsha area and all other surrounding areas.
Nakheel added that the second shopping mall located in Jumeirah Village Circle will also contain cinemas, a supermarket in addition to other retailers, restaurants and cafes.
Jumeirah Village is expected to accommodate about 300,000 people when the project is complete.
A Nakheel spokesman said: “Retail expansion is key to our business strategy and bringing new services and facilities to our community is one of our top priorities. These new shopping malls will further enhance new Dubai and provide exciting new destinations for Dubai’s residents and visitors.”
The new malls, for which designers will be appointed shortly, are among several new Nakheel retail projects underway.
The company is also building Nakheel Mall on Palm Jumeirah, a new mall on Deira Islands, extensions to Dragon Mart and Ibn Battuta and a number of neighbourhood shopping centres in its communities.
Shoprite opened its first outlet in northern Nigeria on Thursday, as part of an aggressive expansion drive and defying wider concerns about security in the region.
The store in Kano, the north’s largest city and main commercial hub, is situated in the new $110 million (R1.2 billion) Ado Bayero Mall that has taken three years to construct and claims to be the biggest in the country.
Hundreds of upper- and middle-class Nigerians thronged the mall as it opened its doors. The new venture, at a cost of $20m, brings to eight the number of Shoprite stores in Nigeria. A further four of the supermarkets, which sell food, goods and clothes, are due to open before the end of the year.
“We decided to expand our reach to Kano as part of our commitment to widen our presence in the Nigerian mega cities,” store manager Adulhakeem Abdulganiyu said.
“Kano, as a commercial city with its huge population, provides ample business opportunity which we want to exploit.”
Kano’s economy has suffered in recent decades, even before the start of the Islamist insurgency, which has claimed thousands of lives in a wave of deadly shootings and bomb attacks. Hundreds of factories have closed because of power supply problems and competition from cheaper Asian goods, putting many people out of work and leaving them unable to provide for their families.
Unemployment rates in Kano, which was famous for its textiles and tanneries, are the highest in Nigeria, according to the government.
In 2011, the National Bureau of Statistics said as many as two-thirds of the population were out of work.
Businesses, including foreign firms, have also relocated or shut because of the Boko Haram threat. But Abdulganiyu said the unrest was not a reason not to set up in the city.
“If we continue saying we will not come due to the prevailing security situation we will not move forward. All we need to do is make adequate provisions to overcome such challenges,” he added.
Kano is already home to several shopping malls owned by Nigerians and Lebanese, as well as Indian nationals, but they are now dwarfed by the new 24 000m2 centre.
Abdulganiyu insisted that “the market is big enough for all of us”, while others said that the new venture would be good for competition.
“Nigeria is a big country with a great market, which is why South Africa and other countries are investing here,” said Mohammed Hayatudden, one of the owners of the mall.
According to WWD, talks to sell close to 80 per cent of the company are said to be ‘entering the final stages”, though there is still some issue over the company’s valuation.
Equity fund Permira, which owns Hugo Boss, New Look and R.Griggs Group Ltd, parent of the Doc Martens brand, is said to be the lead contender.
In 2009, Cavalli aborted plans to sell a 30 per cent stake to Italian private equity firm Clessidra SGR SpA after disagreeing over price.
A spokeswoman for Permira, which was said to be contender in the recent Versace sale, said “the fund does not comment on market rumors,” while the Cavalli Group had no comment.
If the reported sale does go ahead, it is not known what it would mean for the 73-year-old designer, who has previously said he can’t imagine retiring.
“How could I stop? Indeed, I could not stay away from the catwalk,” he said recently. “When I go out, it’s such an emotion…and I look you all in the eyes.”
Florence-born Cavalli founded his brand in 1970, introducing his secondary line, Just Cavalli in 1990. His second and current wife Eva Duringer acts as co-creative director of both labels.
Marks & Spencer confirmed the departure of two senior executives as the brain drain from the high street chain continues.
IT director Darrell Stein and Clem Constantine, director of property, both of whom sit on the M&S management committee, are leaving in the summer.
The retailer has suffered a stream of senior defections, but a spokeswoman said that the departures reflected significant changes to both roles.
Stein – who is understood to have a job to go to – has completed a major revamp of the website while M&S’s “property focus” changed, she said, after chief executive Marc Bolland put the brakes on store openings last year.
“We have a very strong talent pool at M&S that is being recognised internally and externally,” said the spokeswoman.
Mumbai, March 21: Tesco, the £72-billion British retailer, today announced that it had picked up a 50 per cent stake in Tatas-owned Trent Hypermarket Ltd (THL), becoming the first global supermarket chain to enter India’s multi-brand retail segment.
The world’s second-largest retailer by profits will invest £85 million (or Rs 850 crore) in THL.
In a separate filing with the Bombay Stock Exchange, Tatas-owned Trent said Tesco Overseas Investments, a wholly-owned subsidiary of Tesco, would purchase a part of the equity shares that Trent held in THL for an amount of
Rs 150 crore.
Tesco Overseas would separately subscribe to additional THL equity shares for Rs 700 crore, the filing said.
It added that the proposed investment by Tesco Overseas was subject to necessary approvals.
THL operates the Star Bazaar and Star Daily retail businesses in India.
Last December, Tesco had won an approval from the Foreign Investment Promotion Board (FIPB) to pick up the stake in THL.
Tesco was the first foreign retailer to win an approval to enter the arena after the UPA government relaxed its policy in September 2012 to allow up to 51 per cent foreign investment in multi-brand retail operations.
Under the rules, foreign investors were required to invest at least $100 million in the retailing venture.
THL runs hypermarkets under the Star Bazaar brandname in four states which stock Tesco products under an arrangement.
Since 2008, Trent Hypermarket Ltd had a franchise and a wholesale supply arrangement with Tesco Plc and its wholly-owned Indian subsidiary, Tesco Hindustan Wholesaling Pvt Ltd, respectively. The exclusive franchise agreement granted Star Bazaar access to Tesco’s extensive retail expertise and technical capability.
Star Bazaar, a multi-format hypermarket chain, has 15
discount stores — three in Mumbai, four in Bangalore, two each in Ahmedabad and Pune, and one each in Aurangabad, Surat, Chennai and Kolhapur.
At present, Gujarat and Tamil Nadu — two states where Star Bazar retail outlets already exist — are opposed to FDI in multi-brand retail.
The two partners are aware of the opposition in several states to their collaboration. And that is why they had said in a press release last December that the “proposed partnership will operate and build on the existing portfolio of Star Bazaar stores in Maharashtra and Karnataka” — the two states that aren’t opposed to the idea.
Trent Hypermarket Ltd recorded a 21 per cent increase in total revenues at Rs 785.19 crore in 2012-13 from Rs 649.51 crore in the previous year. But it reported negative earnings before interest and tax (EBIT) of Rs 64 crore.
Asian tycoon Li Ka-shing will sell a near 25 per cent stake in his AS Watson health and beauty chain to Singapore’s Temasek for $5.7bn, rather than pursue a planned dual listing in Hong Kong and London.
The investment was announced late on Friday by Hutchison Whampoa, the conglomerate controlled by Mr Li that owns Watsons, putting paid to what would have been one of the biggest listings of the year.
The deal is a huge bet by Temasek on the growth of a middle class in Asia, where rising incomes are spurring domestic consumption. Watsons is the largest pharmacy chain in China, with a one-fifth market share.
Hutchison had been seeking a $5bn-plus share sale but only if it were certain of inclusion in the Hang Seng and FTSE 100 indices, according to people close to the company.
“It may have been that they felt jittery about an IPO for this business and were looking at the possibility of a strategic investor as well,” said one person. Hutchison approached Temasek with the idea, the person said.
Hutchison will pay out about two-thirds of the proceeds of the sale to shareholders of Hutchison and Cheung Kong – which owns about half of Hutchison – in the form of a HK$7 per share special dividend.
The deal will leave Hutchison with about $1.8bn, which it will put towards working capital. The company is keen to invest more into its European mobile telecoms businesses. Hutchison and Temasek would work together towards a listing of Watsons at a “suitable time” in the future, which could be a couple of years away, Hutchison said.
The more recent Hong Kong listing by Hong Kong Electric, part of Mr Li’s empire, struggled to entice investors and was priced lower than expected. That was partly due to local investors having become wary of buying something that Mr Li wanted to sell, due to his reputation as a savvy asset trader, according to bankers.
A deal would leave Temasek as a “strategic investor”, with the second-largest stake in Watsons, which has 3,500 stores and more than 900 pharmacies in 12 Asian and European markets.
Through acquisitions in recent years, Watsons has already become a global business that owns Superdrug in the UK and Marionnaud in France.
About one quarter of its sales last year came from its miscellaneous Hong Kong businesses, which include Fortress, the electrical chain, and ParknShop, the supermarkets business that Mr Li tried and failed to sell last year. Another quarter of its sales come from the fast-growing Chinese and Asian parts of the Watsons health and beauty chain, while about half come from its European stores.
“Urbanisation and the needs of a growing middle-income population underpin the long-term prospects of growth markets such as Asia and Latin America,” Temasek said in its latest annual review.
The Singapore investor already owns a 3 per cent stake in Li & Fung, the Hong Kong-listed distributor of pharmaceuticals, beauty products and clothing for global consumer goods companies.
The Watsons investment would be Temasek’s largest since it spent $2.5bn on a 5 per cent stake in Repsol, the Spanish oil and gas group, bringing its total holding to 6 per cent.
Temasek is an active investor and regularly shuffles its portfolio. Last month it emerged that it had been in talks with SingTel, southeast Asia’s largest telecoms group by revenues, about selling its 41.6 per cent stake in Shin Corp, which runs Thailand’s largest mobile operator.
Sources tell us that Japanese fast-fashion retailer Uniqlo will open in Canada, and that it will arrive via Nordstrom. We cannot confirm this information, though we have been contacted by sources from across Canada (as well as one in the United States) notifying us of Uniqlo and Nordstrom’s potential business relationship. If these sources are correct, we could see Uniqlo open stores in Canada within the next two years.
One source informed us that Nordstrom has “purchased the rights” to open Uniqlo stores in Canada, not unlike Hudson’s Bay’s licensed operation of Canadian TopShop/TopMan stores. Our source would not confirm if Uniqlo would open locations within individual Nordstrom stores or if Nordstrom would open free-standing Uniqlo stores. Another source stated that Uniqlo will “certainly” be opening a store in Downtown Vancouver by the fall of 2015, if not sooner.
Nordstrom will open its first Canadian location at Calgary’s Chinook Centre on September 19th, 2014. Its second Canadian store will open at Ottawa’s Rideau Centre in the spring of 2015. Its third location, the largest in Canada, will open in the fall of 2015 at Vancouver’s Pacific Centre. Following these will be three Nordstrom stores in Toronto: two in the fall of 2016 (at Toronto Eaton Centre and at Yorkdale Shopping Centre) and one in the spring of 2017 at Sherway Gardens. At least two more Canadian Nordstrom locations are expected to follow.
Again, we must make it clear that this is speculation and that none of our sources will go on record to confirm Uniqlo arriving in Canada via Nordstrom. We are nevertheless publishing this information, as all of these unrelated sources have essentially relayed the same message. If you can provide any further information on this topic (or if you have any retail-related tips in general), please email us here.
Apparel retailer Express Inc forecast a profit for the current quarter that fell far short of analyst expectations, citing deep discounting and a steeper-than-expected fall in store traffic.
The company’s shares fell 17 percent in premarket trading after the specialty fashion apparel retailer also reported fourth-quarter results that also missed analyst estimates.
Express said it expects first-quarter earnings of 12 cents to 18 cents per share, below analysts’ average forecast of 41 cents per share, according to Thomson Reuters I/B/E/S.
“The start of 2014 has … been extremely difficult,” Chief Executive Officer Michael Weiss said in a statement.
In the past two days, U.S. apparel retailers, American Eagle Outfitters and Urban Outfitters Inc have warned that results in the current quarter would be hurt by stiff competition and choppy sales trends at malls.
In recent quarters, sales have slumped at most U.S. teen and fashion apparel retailers, including Abercrombie & Fitch Co and Aeropostale Inc, as young shoppers shift to the trendier and cheaper options at chains such as Sweden’s Hennes & Mauritz and Inditex’s Zara.
Express forecast comparable sales to fall in the low double digits to the high single digits in the first quarter.
The company’s net income fell to $47.93 million, or 57 cents per share, in the fourth quarter ended Feb. 1, from $63.94 million, or 75 cents per share, a year earlier.
Sales fell 2 percent to $715.9 million, while comparable-store sales rose 1 percent.
Analysts on average were expecting a profit of 59 cents on revenue of $721.13 million.
“The heavier than planned pace of promotions impacted both top-line and margins,” Weiss said.
The company’s shares closed at $18.24 Tuesday on the New York Stock Exchange. The stock slumped to $15.10 in trading before the bell on Wednesday.
Dubai’s Outlet Mall is planning an expansion, tapping demand for bargain brands.
“Phase two will be expanding the Outlet Mall. It has been on the cards for sometime, but we are working more seriously now towards expansion,” said Mr Vishal Mahajan, the mall’s director. “It takes a couple of years to build so not before 2016. The spades are not in the ground yet but it has moved on from the drawing board and the plans – with regard to space available, number of outlets, etc – are being finalised as we speak.”
The mall, owned by Al Ahli Holding Group, opened in 2007 offering an uneven retailing experience. The churn rate of retailers opening and closing led to vacant stretches of empty shops.
But today it has 240 shops with 97 per cent of its retail space leased and 150,000 to 160,000 customers a week.
“The growing number of expatriates moving into the country especially after the Expo 2020 is expected to contribute to the outlet mall expansion,” says Fatemah Sherif, a retail analyst at Euromonitor. “Furthermore, with the growing number of compounds due to open in Dubailand and this area becoming a hit, the outlet mall is likely to be closer in proximity encouraging more shopping there. Rising prices are likely to benefit the business – low-mid income earners will still be seeking value for money products.”
Dubai’s mall developers are benefiting from rapidly rising tourist arrivals and improving consumer confidence that has triggered a wave of retail spending across the emirate. The outlet mall offers products at frequently deep discount as fashion brands look to sell excess inventory and older products. The mall offers both upmarket and mass market brands.
“We have high street brands and luxury such as Burberry and Armani mixed with value brands like Giordano and Mango,” said Mr Mahajan. “Every two to three months the collection is changed in the main malls, which means they have to get rid of the ‘old’ merchandise. It may have only been there two weeks, but the new concepts and styles take precedence. The outlet mall gives them the chance to make more money from what was dead stock.”
Next has reported a 12% increase in annual profits to £695m.
The UK fashion retailer also reported a 5.4% growth in sales to £3.7bn to the end of January, and increased its expectations for the year ahead.
Sales via its online and catalogue business, Next Directory, grew by more than 12%, while sales at its stores grew by 1.7%.
Next chief executive Lord Wolfson said he was also optimistic about 2014, but warned of a credit-driven recovery.
“If anything has been learnt from the last ten years, it is that credit cannot continue to grow faster than wages forever,” he added in a statement.
“Until we see significant increase in the supply side of the economy (profitable investment and improved productivity), we cannot bank on a return to sustained growth.”
Next has forecast sales growth of up to 8% this year, raising its previous estimate of 4%. And it expects profits in 2014 to rise by up to £770m.
Despite his credit warning, Lord Wolfson added that the “modest improvement” in the consumer economy looked set to continue through 2014, thanks in part to wages gradually closing the gap with inflation.
Next also said it would increase full year ordinary dividends by 23% to £1.29.
Over the past year it returned £461m to shareholders through share buybacks and dividends, having said it had amassed more cash than it could productively invest in the business.
Bloomington, Minn. — Mall of America has launched a $325 million expansion project in cooperation with Mortenson, a U.S.-based construction and development services company, Hotel Development LLC, an enterprise of the Shakopee Mdewakanton Sioux Community, and the city of Bloomington, Minn.
The expansion will include a 342-room JW Marriott hotel, office tower, high-end retailers, new dining options, a tourist welcome center and large event space. An extension of the mall on all three levels on the north side, it is the most significant construction project at the property since opening in 1992.
The JW Marriott located at Mall of America is a ground-up, 14-story, 342-room hotel with direct access to the mall. The hotel will be owned by Hotel Development LLC and will be managed by Marriott International. It includes a full-service restaurant and bar, grand lobby with a lobby bar, fitness center, pool, and extensive meeting space that includes a grand ballroom. It also will offer an executive lounge and underground parking.
A 180,000 sq.-ft. Class-A office complex is also a part of the expansion plan. It will be home to a mix of national and international business tenants that will be located atop a new multi-level parking garage, providing direct access to the mall. The expansion is expected to generate 1,000 construction jobs and 2,500 permanent jobs from ongoing retail, hotel and office operations. Construction has begun and anticipated completion is scheduled for fall 2015.
“This is a major milestone for Mall of America,” said Paul Ghermezian, chief operating officer for Triple Five Worldwide. “For more than 20 years, it has been our dream to increase the size of the Mall, firmly establishing it as a world renowned attraction. Today, I couldn’t be more pleased to say that dream is becoming a reality.”
San Francisco — Gap Inc. plans to open five franchise-operated Old Navy stores in the Philippines in 2014. The first two Old Navy stores will open in Manila in March and there are plans to open three more stores in the second half of the year for a total of five Old Navy stores in 2014.
The first of two Old Navy stores, a dedicated three-story building, will open in the heart of Manila’s fashion and shopping district, Bonifacio High Street, on March 22. The second store will open in the prominent Glorietta mall on March 29.
The three additional Old Navy stores are targeted to open in the Manila area in the second half of 2014 in new and existing developments. Old Navy is partnering with Stores Specialists, Inc. to open the stores, which already operates Gap brand and Banana Republic stores in the Philippines.
“The Philippines is a natural fit for Old Navy as the country has a strong and growing economy, and consumers in the market are interested in iconic American apparel brands,” said Blair Dunn, general manager, Old Navy franchise. “Through local partners we have immediate access to a deep understanding of the marketplace and consumer needs.
Sephora (LVMH) has inaugurated in Via Durini in Milan, and in world preview, the new retail concept of the brand. Baptized Techno experience beauty store, the space, born by architect Giacomo De Zoppi’s pencil, is an authentic trip of the senses where an olfactive wall turns into an experience to breathe, while the virtual make up emits every chromatic possibility.
Fossil plans to set up 25 stores in 5 years
Bangalore: Watches and accessories maker Fossil Inc. will open 20-25 stores under its namesake brand in malls in India over the next five years and will also start selling jewellery as it seeks to increase its presence in the country.
After Fossil India got approval to open fully owned stores in India in February 2013, the company opened its first outlet in Mumbai earlier this month. India allowed 100% foreign direct investment (FDI) in single-brand retail in 2012.
“Currently, we’re focusing only on malls for the Fossil brand till we establish the brand to a certain level. High streets typically get dedicated traffic whereas in malls there’s a lot of brand exposure. There are some 400 malls in India out of which only a handful are relevant for our brand,” Nangia said.
Fossil, which sells watches mostly priced between Rs.5,000 and Rs.25,000, started operations in India in 2005. It sells its products through more than 500 stores, including Shoppers Stop, Lifestyle and Helios. For the year ended 31 March 2013, Fossil India reported a 60% increase in sales to Rs.95.6 crore. The Indian unit reported a profit of Rs.8.4 crore compared with a loss of Rs.6 crore in the previous year, according to documents available with the Registrar of Companies.
India’s watch market was worth Rs.5,000 crore in 2012, out of which organized retail accounts for 40%, according to a 2012 study by the Associated Chambers of Commerce and Industry of India.
Though Titan Co. Ltd owns the largest-selling watch brand with more than half the share of the organized market, it generates a majority of its sales from lower-priced products. While the availability of luxury watches such as Omega and Rolex is improving, they are still out of reach for a majority of Indians.
“There’s a big gap between the low-to-mid segment on the one side and luxury on the other side. That’s where the growth is going to be for us. We’re also introducing Fossil jewellery for the first time, but only in our stores,” Nangia said.
He said Fossil had benefited from the weaker rupee last year as the company, which makes some of its brands in India, held prices while its rivals were forced to raise prices because of a high quantity of imports.
Fossil will likely find its task cut out in the Indian market.
“Fossil will have to aggressively advertise and market themselves in terms of TV ads to get noticed in India because it’s a very cluttered market, and I don’t think they are doing that,” said Abneesh Roy, an analyst at Edelweiss Securities. And even though Titan is not that strong a brand in the over Rs.5,000 range in smaller cities and towns they are the preferred brand even in this price point because of their distribution strength and servicing ability.”
“However, in the large cities, Fossil is a well known international brand and has an advantage over Titan.”
Fossil is also looking to launch its e-commerce website in India—if the government allows FDI in e-commerce.
“We’re waiting for the FDI laws to change to launch our own e-commerce website. Not only as a selling medium but to also reach out to a wider customer base, do market research and to improve our customer connect,” Nangia said.
Mint reported on 16 March that some fashion and accessories brands are in discussions with e-commerce firms to reduce discounts on websites after wholesalers and brick-and-mortar retailers, the worst hit by the boom in online shopping, put pressure on brands.
Nangia said Fossil, which sells on Flipkart, Myntra and three other sites, too would take up the matter with its e-commerce partners.
“We’re going to talk to the sites to try and stop discounts. It’s fine to give discounts on older stock and when you’re trying to liquidate stock but it’s unfair give discounts on new products,” he said.
Moynat (LVMH Group) opened this week a new flagship store in London’s fashionable Mayfair on Mount Street. The new Moynat store is the second global flagship after the one in Paris on Rue St Honore. The iconic French trunk maker features in London its entire accessories collections, including handbags and luggage for men and women. Last week, Moynat also inaugurated a pop-up boutique in New York at the recently opened Dover Street Market concept store.
Milton Keynes, UK, 2014-3-18 — /EPR Retail News/ — Home Retail Group today announces a new management structure for Argos as a result of the promotion of John Walden, formerly Manager Director of Argos, to the role of Group Chief Executive. All changes are effective immediately.
As Group Chief Executive, John Walden will continue to provide guidance to Argos, particularly on its strategic direction, transformation priorities and cultural development. In addition, the existing Argos leadership team will be restructured as follows:
David Robinson, currently Argos Commercial Director, is promoted to the new role of Chief Operating Officer of Argos. Reporting to John Walden, he will have responsibility for day-to-day business operations and for the delivery of commercial strategies and financial plans. In addition to his current commercial team, several key Argos functions will now report to David, including retail operations, marketing, finance and human resources.
Bertrand Bodson, currently Argos Digital Director, is promoted to the new role of Chief Digital Officer for the Group. He will continue to lead the digital strategy for Argos, including digital development, trading and other functions, catalogue and new media, and the overall commercial and financial performance of the digital business. Bertrand will further assume broader responsibility for Argos information systems, and for the growing digital strategies across the Group.
John Walden said:
“As I step into the new role as Chief Executive of Home Retail Group, it is critical that Argos continues its current positive trading momentum and delivers on its ambitious transformation plan. I will naturally remain involved with Argos, and be committed to the success of that plan. The restructuring of the Argos leadership will help strengthen that team as they assume some of my former responsibilities.
“I am delighted that David and Bertrand have proven their readiness for further responsibilities. David has led a substantial upgrade in the capabilities of the Argos trading function in the past two years, and the strong trading performance of the business over that period is a reflection of his leadership. Bertrand, having joined Argos only last year, has significantly elevated the vision and digital capabilities of Argos as a whole, and overseen good progress across digital channels. I look forward to the continued partnership of David, Bertrand, and the rest of the Argos executive team.”
The British government is hopeful that high-income earners in the United Arab Emirates are ready to splash out on luxury brands exporting their products to the country.
Lord Ian Livingston, UK Minister of State of Trade and Investment, is visiting the UAE to launch a brand awareness campaign for British retail, luxury and design companies.
Livingston said the GREAT Week UAE is a “great opportunity” to “highlight British brands, retailers and luxury products.”
Livingston was speaking to the media during a roundtable at an event at the British Embassy in Dubai on Sunday.
He said the launch of GREAT Week, which is in the UAE for the first time, is an “important step in the UK’s relationship with the UAE.”
As part of GREAT Week UAE 35 British companies are showcasing their products, which kicked off at the British Embassy in Dubai on Sunday. Brands include Fortnum & Mason, which will launch its first international store in Dubai on March 21.
Other brands include LuLu Guinness, a designer handbag retailer with prices ranging from Dh400 to Dh 4000, Halycon Days, a men’s and women’s fashion accessory brand with prices for a bang starting at Dh695 for a bangle and as high as Dh5145 for a gift box. Bremont, the high end watchmaker is also showcasing their products this week
Livingston said the companies are able to export British innovation, fashion and culture to the Emirati market.
He added that there is potential for the British companies to establish their own operations as well as connect with local partners who can introduce them to the market.
Executives from the British companies are expected this week to meet with potential and existing UAE partners to discuss possibilities of expanding the presence of their brands.
On the potential to grow trade opportunities Livingston said, “apart from a growing retail market, the construction design sector [offers significant potential] with Expo, the airport and a number of new retail sites being developed.”
London is also bidding to become a hub for Islamic finance and last year it became the first non-Muslim country to host the World Islamic Economic Forum. Livingston said that Dubai, which is bidding to become the global hub of Islamic finance, will be key to the development of the sector but that the UK will offer its own incentives.
The UAE is the UK’s largest export market in the Middle East and is home to some 125,000 British expatriates. In 2011 the UAE’s average net income reached $35,770, according to the World Bank.
The online discount clothing website M and M Direct is to change hands for more than £80m amid a frenzy of deals involving some of the UK’s best-known retailers.
Sky News understands that TA Associates, the private equity group which bought M and M in 2007, has appointed bankers from Canaccord Genuity to handle the auction, which is expected to attract significant interest.
Set up in 1987 by Mark Ellis and Martin Churchward to sell end-of-line clearance sports products, the website now sells products from more than 300 brands such as Diesel, New Balance and Nike, and claims to attract nearly one million visitors each week.
TA, which is also trying to sell its interest in the premium lifestyle retailer Cath Kidston, bought M and M from ECI Partners, another investment firm, seven years ago.
It has flirted with a sale of the business before, being stalked by Mike Ashley, the tycoon behind Sports Direct International, in 2011.
News of M and M Direct’s plan to sell itself again comes on the same day that Asos, one of the City’s most popular internet retailing stocks, delivered one of the most disappointing trading updates in its history.
Shares in Asos plunged by 20% as investors digested the revised profit forecast, while shares in Boohoo, the fashion retailer which listed on London’s junior AIM market last week, also fell sharply.
M and M, which sells products at discounts of between 40% and 90% off high street prices, is understood to have had a decent Christmas trading period, although the company has not been without its difficulties.
Accounts filed at Companies House for the 12 months ending February 24 last year reveal that the previous year had been especially troubled.
“The company encountered a number of market and strategic issues which led to [its] turnover decreasing by 4%. A wholesale review of the business was conducted and a new strategic plan has been introduced which, along with new management, has allowed the business to return to profitable growth.”
Porsche Design inaugurated yesterday in Milan’s Via Spiga its largest store globally, covering over 400 sqm on two floors. The new Porsche Design store features and expanded ready to wear collection for both men and women, as well as its extended range of accessories. The opening of the Milanese store is not only symbolic in size but also pays homage to Italy, where most of the leather handbags and shoes of the brand are designed and manufactured.
In 2013, Porsche Design reported an exceptional growth of 20% in its turnover compared to 2012, reaching a total of 75,5 million euros. The company operates 30 mono-brand stores and is present at 123 door globally. Porsche Design confirmed with the occasion of its Milanese store opening that it aims to double its retail network by 2018.
It’s been more than a year of planning, but the Walmart to Go convenience-store format quietly opened in Bentonville on Saturday (March 15), with the grand opening set for March 19.
Store workers told The City Wire this was a soft opening and it was a busy day with heavy in-store traffic as travelers on the busy intersection near 1300 S. Walton Blvd., sought a look inside what is the first store in a new effort by Bentonville-based Wal-Mart Stores Inc. to capture a different and growing element of the retail market.
The small store is a hybrid format — part traditional convenience store, part grocery, part quick serve restaurant. Walmart partnered with Bentonville Butcher & Deli, one of the more popular names around in terms of quality meat, to operate a quick serve meat counter in the back of the store. Fresh deli sandwiches or hot barbecue brisket, ribs, smoked chicken and traditional sides were available by the plate or by the pound.
Krispy Kreme has a donut stand between the beverage stations on the right wall of the store. There is a traditional soda fountain, Icee fountain, milk shake option and full coffee/cappuccino area.
Refrigerated food-to-go includes market fresh pizzas, sandwiches and other meat entrees. There is also fresh fruit and a Greek yogurt smoothy station. The center of the store closely resembles a traditional convenience format with cashiers in a corral with a wide range of tobacco products.
The left side of the store is merchandised much like a tiny grocery. Coolers line the outer wall offering wine and beer with a walk-in cooler. Frozen foods can be found in two large freezers along the outer left wall.
The mini grocery includes five wide aisles that contain hundreds of packaged foods and non-edible items from breakfast cereals to dog food and diapers. Shirley’s Flowers has a fresh floral stand near the front doors next to Hallmark Cards. The store also has magazines, books, and ATM and a seating area near the front of the store.
The convenience store also features six gas pumps out front with a covered awning that sports the Walmart sunburst on the underside. One unusual feature is a large awning that connects the pump area to the front door. Ice, Blue Rhino propane and Red Box are all positioned outside the store under awnings. There is a picnic area outdoors to seat those wanting to eat onsite.
With this new convenience format Wal-Mart hopes to capture some of the $415 billion quick trip marketshare it is losing to Dollar General and other convenience stores. Walmart U.S. CEO Bill Simon said earlier this month that the retailer has just 10% of that marketshare and is vying for more with the hybrid stores that can serve consumer fill-in trips, which Walmart estimates to be 40% of their grocery spend.
Sanjay Lalbhai-controlled Arvind has finalised a deal to buy out 49% stake jointly held by the Murjani Group and the US-based private equity fund Matrix Partners in Calvin Klein India for close to 100 crore, said three persons close to the transaction.
The deal will help the denim major widen its ties with its existing joint venture partner American clothing giant Phillips-Van Heusen Corp for Tommy Hilfiger brand.
Phillips-Van Heusen Corp also owns Calvin Klein worldwide.
The negotiations, which started last year, culminated in a transaction five days ago and a formal announcement is expected soon, said one of the persons quoted above. Ambit Corporate Finance was the sole advisor to the deal. While a spokesperson for Arvind declined to comment, the head of Murjani Group Vijay Murjani and Matrix Partners did not respond to telephone calls and text messages. While the Murjani Group holds 25% in the joint venture, Matrix holds the rest 24%. The deal also signals Arvind Group’s founder Sanjay Lalbhai’s ambition to grow in the mid-premium segment of the apparel market by forging alliances with marque overseas brands.
It all started in 2003 when Arvind struck a joint venture with Murjani Group to sell Tommy Hilfiger in India. Though the worldwide ownership of Tommy Hilfiger moved to Phillips-Van Heusen, Arvind continued to be the Indian partner. Two years ago, Arvind acquired the business operations of British fashion retailer Debenhams, Next and American lifestyle brand Nautica in India from Ramesh-Tainwala-led Planet Retail.
Though the move was an attempt to boost market share in kidswear, womenswear and sportsware segments, the economic downturn triggered a sharp fall in customer purchases, leaving some retail brands struggling. Experts feel that these alliances allowed Arvind to consolidate brands under a single umbrella and offer a one-stop platform for aspirational customers.
“These joint ventures not only bring marque brands under a single platform, but also help Arvind to negotiate better for retail space. Instead of negotiating for a single brand, the company can now look at having more brands in a retail mall by paying lesser rents,” said Harminder Sahani, founder and managing director, Wazir Advisors, a consultancy firm for retail and lifestyle companies.
Despite the fallout of recession, the company’s brands business grew by 25% in the last nine-month period to 1,412 crore. The company’s profit before tax and interest from brands business grew by 17% to 34.7 crore in the last nine months. The company’s brands include Excalibur, Flying Machine, Colt and Newport.
HONG KONG – Fast Retailing Co Ltd jumped 4 percent in its Hong Kong trading debut on Wednesday as the operator of Japan’s Uniqlo clothing outlets listed in the island city in an effort to boost its profile in mainland China and beyond.
At one point, the shares shot up as much 31 percent in thin trade before quickly back falling back. In Tokyo, the stock (9983.T) was trading 2.8 percent higher.
The strong debut underscores strong investor appetite for high profile brands that has atttracted several other global names such as Coach and casino operator Melco Crown Entertainment Ltd to Hong Kong without actually raising capital.
Fast Retailing’s Hong Kong listing is part of a plan to become the world’s top apparel retailer by 2020, and which may include offering shares at other exchanges, Chief Financial Officer Takeshi Okazaki said last month.
Fast Retailing’s Hong Kong depositary receipts were trading at HK$28.45 in morning trade compared with a reference price of HK$27.36, which is based on the close of the company’s Tokyo listed shares on Tuesday.
Fast Retailing shares closed on Tuesday at 35,890 yen, or an equivalent of HK$27.36 per HDR, according to a securities filing. Each HDR representing one hundredth of the Japanese company’s Tokyo-traded stock.
By comparison, Hong Kong’s benchmark Hang Seng Index .HSI was up 0.4 percent higher and fashion peer Prada up 1.2 percent.
Fast Retailing expects China, as well as the rest of Asia, to drive its rapid expansion and account for three-quarters of its global outlets by that time.
It wants to more than triple the number of stores in Greater China to 1,000 by 2020, when it hopes to be the world’s biggest apparel retailer surpassing Zara’s Inditex, Hennes & Mauritz and Gap.
Sources have said that Fast Retailing is also exploring a bid for U.S. apparel chain J.Crew Group Inc.
The so-called listings by introduction have had limited success compared with typical initial public offerings because there are no new shares to trade, which reduces their liquidity.
The deal’s sole sponsor was Morgan Stanley, which earned about 150 million yen ($1.48 million) in fees, according to Fast Retailing’s listing prospectus.
Prada buys a slice of Pasticceria Marchesi, a Milanese pastry shop
Milanese fashion house Prada has finally got a bite of the cake business as it acquires an 80 per cent stake in 190-year-old patisserie Pasticceria
Let them eat panettone! That’s what we imagine the big wigs at Prada Group HQ were saying as the deal confirming an 80 per cent acquisition in Pasticceria Marchesi was closed.
The 101-year-old fashion house is pleased to invest in another Milanese institution, albeit one famed for the contents of its bags as opposed to their exterior. Since 1824, Pasticceria Marchesi has served the people of Milan with its revered pastries and chocolate from its premises on Corso Magenta.
A Prada statement revealed that the investment in Angelo Marchesi Srl ‘seeks to promote and assure the strategic strengthening of the brand within a series of future development projects, both within Milan – in the new Prada spaces in the Galleria Vittorio Emanuele II – and internationally’.
Just last year the Prada Group lost out on acquiring Cova Montenapoleone SpA, the holding company of another deluxe patisserie in Milan, to luxury conglomerate LVMH. The two powerhouses went head to head in the bun fight, with Prada claiming it was engaged in talks with its previous owners, the Faccioli family, to take control of the Cova café on Via
Patrizio Bertelli, managing director of Prada SpA and husband of Prada and Miu Miu creative director Miuccia, said: “Marchesi represents a symbol of Milanese excellence and I am happy we have stipulated this agreement with the family that founded the historic brand. Our goal is to collaborate in an effective manner in its development and in full respect of its tradition”.
We wonder if that will signal lots of Florentines and biscottis backstage at the Prada show…
Bolingbrook, Ill. — Ulta Beauty’s fiscal fourth-quarter earnings rose 9.5% on better-than-expected sales. The fast-growing beauty products retailer plans to add 100 net new stores, expanding square footage by 15% and remodel 12 locations in its current fiscal year.
“Ulta Beauty achieved excellent top line growth in the fourth quarter,” said Mary Dillon, CEO. “We delivered earnings growth consistent with our expectations and made significant progress with our key growth strategies.”
For the quarter ended Feb. 1, Ulta reported a profit of $70.7 million, up from $64.5 million a year earlier.
Revenue increased 14% to $868.1 million. (The year-earlier period include an additional week of sales.) Same-store sales rose 9.2%. E-commerce comparable sales skyrocketed 82.5%.
For the fiscal year, Ulta said it opened 127 new stores, completed four store relocations and remodeled seven stores.
“I am very proud of the team’s accomplishments during 2013,” Dillon said, “including the completion of the most ambitious store opening program in our company’s history; the addition of 25 significant new brands contributing to 7.9% annual comparable store sales growth; exciting growth in our loyalty program, now 13 million members strong; and rapid growth in Ulta.com, driven by major steps forward in our e-commerce platform and fulfillment capabilities.”
Although Ulta plans to open fewer stores this year, the company is increasing its capital expenditure budget to $265 million from $226 million last year.
“From a position of strength, we are making important investments to support the long-term growth and success of Ulta Beauty,” Dillon said. “We are building the right supply chain and systems to support 1,200 stores and a much larger e-commerce business, we are developing our customer loyalty programs and CRM capabilities, we are investing in brand awareness to drive new customer acquisition, and we are working to deliver a differentiated customer experience. All of these initiatives are designed to drive sustainable growth and create shareholder value.”
Ann Summers is putting the underwear brand Knickerbox up for sale as the lingerie and adult toys company tries to recapture the risqué edge that made it a success story.
The retailer has hired accountants KPMG to run a sale process for the business. It is thought interest may come from big supermarkets and department stores looking to bolster their underwear offering, with Tesco and Debenhams understood to have shown early interest.
Ann Summers bought Knickerbox, which focuses on feminine and comfortable lingerie, in 2000 for an undisclosed sum. The business was founded in 1986, but at the time of the acquisition the group had posted a £5m loss.
Ann Summers took on the Knickerbox group’s 33 UK stores and has sold the brand in store, online and through its Ann Summers parties, establishing it as a recognised lingerie brand.
Jacqueline Gold, the chief executive of Ann Summers, has run the family business since 1981, after being brought in by her father, David, the co-owner of West Ham United football club.
She widened what was a very male-focused adult brand by introducing Ann Summers parties to circumvent regulations that at the time restricted the display of adult toys, and making it appeal more to women.
There are now more than 5,000 Ann Summers party planners, holding more than 2,500 parties per week.
The group’s fortunes have been revived recently by the success of EL James’s erotic novel Fifty Shades of Grey, and its sequels.
Pre-tax profits rose by 43pc in 2012 to £4m on the back of increased sales, particularly in product lines mentioned in the Christian Grey novels. Ann Summers’ more mainstream products are now sold by the beauty retailer Superdrug.
David McCorquodale, head of retail at KPMG, confirmed the appointment. “The Knickerbox brand has a strong identity and a respected market position. We can envisage the brand sitting with a retailer, pure player or brand owner who can reach a broader sector of its customer base than its current positioning.”
Ms Gold said: “Knickerbox has been a very successful part of the Ann Summers brand for over 13 years and we have made this decision as part of a wider strategic plan that we believe will allow us to experience continued growth and brand development.”
Online fashion retailer boohoo.com has seen its shares jump by more than 50% on its first day of trading on the stock market.
The company, listed on London’s alternative investment market (AIM) exchange, is now valued at around £870m.
Its shares first started at 70% above the offer price of 50p each, before easing.
Boohoo.com is the latest retail business to eye flotations in Britain, amid a return of consumer confidence and a tilt towards online retailing.
More than 10% of all retail purchases are made online, according to the Office for National Statistics.
Last month online domestic appliances retailer AO saw a share surge and its larger fashion rival Asos has seen its shares climb since floating last year.
B&M and House of Fraser are also expected to come to market this year.
Shopping by mobile phones and tablets is seen as a key driver of online retailers’ market success.
Manchester-based Boohoo is majority-owned by its Kamani family founders, has discovered a niche in the industry.
It designs, sources and sells own-brand clothing, accessories and shoes through its website to a core market between the ages of 16 and 24.
Online sales have also allowed it to move beyond a UK focus towards global markets.
Its sales soared 70% to £91.9m in the 10 months to December 2013, while pre-tax earnings shot up 188% to £10.1m
LVMH owned Sephora to open 7 stores in India this year
NEW DELHI: Louis Vuitton owned Sephora is planning to open 7 stores in India by the end of this year; Afif Haddar, General manager, South East Asia for Sephora, told ETRetail.com. When queried on the choice of cities for expansion, Haddar said Delhi would continue to be of prime focus for Sephora in India. The other cities on radar for expansion for this world’s beauty behemoth are Pune and Hyderabad.
Sephora is a French-based beauty retailer founded in 1970, and specialises in beauty cosmetics, fragrances and personal care.The French luxury goods conglomerate Moet Hennessy Louis Vuitton SA (LVMH) acquired Sephora in the year 1999 and operates 1300 stores in 27 countries worldwide.
Currently, Sephora operates two store in India – both of them present in Delhi. The second store recently opened at the DLF Promenade mall.
Italian luxury menswear house of Ermenegildo Zegna has recently inaugurated its 9th mono-brand store of its main label Ermenegildo Zegna in Ciudad de México at Santa Fe Mall. The new Zegna opening follows the recent inauguration of a new Ermenegildo Zegna mono-brand boutique in Cancun at the Fashion Harbour La Isla shopping centre. Ermenegildo Zegna also operates 6 mono-brand sales point of its Z Zegna label in Mexico.
In line with this week’s theme of shop-in-store concessions, we’ve been told that Nordstrom is looking to possibly feature Prada and other concessions within some of its Canadian locations. Nordstrom has become more receptive to the concept of in-store concessions (designer-operated shops within a larger store), evident by the increase in boutiques for Gucci, Chanel and Dior within existing Nordstrom stores. Saks Fifth Avenue and Holt Renfrew will have to compete for these concessions as Nordstrom attempts to secure luxury designers for its Canadian stores, especially for its Toronto and Vancouver flagship locations.
Prada concession in women’s designer handbags at Nordstrom, Broadway Plaza, Walnut Creek, California [Image Source]
In the past, Nordstrom stores generally lacked designer shop-in-stores. Nordstrom’s first luxury concession was the 1992 opening of Chanel at its Seattle flagship. Nordstrom secured Chanel following the bankruptcy of the neighbouring Fredrick & Nelson department store, which included Chanel and many other upscale shops-in-store. It has only been over the past eight years that Nordstrom has become increasingly receptive to concessions and in-store designer shops, led by the October, 2006 opening of Nordstrom Topanga Plaza in Canoga Park, California. At the time, Topanga was the most luxurious Nordstrom store in the chain. It featured Chanel and Dior accessories concessions and in addition, Nordstrom’s first Gucci boutique. Gucci shops have since become common at Nordstrom.
Chanel at Nordstrom in Downtown Seattle. Saks and Nordstrom will compete for similar concessions in Canada [Image Source]
Prada currently has four leased concessions within Nordstrom stores (in Downtown Seattle, Minneapolis (Mall of America), Walnut Creek, California (Broadway Plaza) and San Diego (Fashion Valley). Chanel boutiques are located within six Nordstrom stores. The king of concessions, Louis Vuitton, operates one concession at Nordstrom’s Chicago Michigan Avenue store and according to a representative at Nordstrom, Louis Vuitton won’t be opening further concessions within any American (or Canadian) Nordstrom stores.
Currently, Holt Renfrew is the only Canadian store to house concessions for Prada, Gucci and Chanel in Canada. We’ve been told that Saks Fifth Avenue would like all three of these at its new Toronto Eaton Centre flagship, and it may attempt to secure Gucci and possibly Chanel concessions for its Sherway Gardens Saks store. As Nordstrom will also open at both the Toronto Eaton Centre and Sherway Gardens, a luxury concession war may emerge as we see an unprecedented number of upscale department stores expand into Canada.
Besides concessions, Nordstrom will be looking to secure plenty of upscale menswear and womenswear designers for its Canadian stores, designers also carried at Holt Renfrew, Saks Fifth Avenue and The Room at Hudson’s Bay. We see a potential label war amongst these retailers as they expand in Canada, and we’ll dedicate a separate article to this topic.
Saudi Arabian retail franchise operations Fawaz Abdulaziz Alhokair on Monday announced it is considering an acquisition in the UK or US after purchasing Spanish brand Blanco for EUR 11 million.
Speaking in Dubai on Monday, Al Hokair Fashion Retail company strategy and investor relations director Rob Cass said the company is considering three to five targets and aims to close a deal in the financial year that runs to April.
“We open a store every 18 hours somewhere in the world, which means that the partner needs to be like-minded with the rate at which we grow,” Cass said.
Operating in 20 countries across Saudi Arabia, the Middle East, North Africa, Central Asia and Caucasus regions, Al Hokair Fashion Retail currently represents over 80 fashion brands through its 1,885 franchised stores.
“We’re going to be adding 404 stores in the 2014-15 financial year, 200 stores in Saudi and 200 internationally,” Cass said. “Saudi share of sales has fallen from 89 per cent in 2010-11 to 67 per cent in 2013-14. We plan to reduce this further to 54 per cent in the next five years.”
The group spent EUR 11 million on Spanish retailer Blanco, which Cass said the company would now look to expand outside of Spain, adding 50 stores each year through franchises.
Cass added that Al Hokair Fashion Retail expects total sales to surge by SAR 12 billion for its 2018-2019 financial year, from an estimated SAR 5.7 billion during this financial year.
Centrepoint, a retail concept comprising four brands from Dubai’s Landmark Group under one roof, has unveiled expansion plans across the Middle East, Asia and Africa.
With 100 stores in its retail portfolio, Centrepoint is set to launch 20 stores this year and 15 stores next year across existing territories as well as new markets including Iraq, Libya and other African countries.
The announcement was made during the launch of the brand’s store at Al Ghurair Centre, Dubai – Centrepoint’s 100th outlet in the region.
The brand that was launched in 2005 in Kuwait currently includes Babyshop, Splash, Shoe Mart and Lifestyle and operates across Saudi Arabia, the UAE, Kuwait, Oman, Bahrain, Qatar, Egypt, Lebanon and Jordan.
Vinod Talreja, director, Centrepoint, said: “With our experience of almost a decade, Centrepoint is well geared to enter new markets and explore further opportunities.”
Centrepoint has enjoyed significant success particularly in Saudi Arabia where the concept has 56 stores.
Simon Cooper, head of Centrepoint, said: ” We process 35 million transactions annually. The average customer visits Centrepoint at least nine times in a year and shops for at least three of the four brands with their families. These trends are strong indicators of Centrepoint’s viability as a successful retail format.”
Baby products retailer Mothercare has appointed former Shop Direct boss Mark Newton-Jones as interim chief executive after Simon Calver resigned last month.
Mr Calver was ousted after less than two years in charge following a profits warning that caused shares in the retailer to slump more than 30pc, wiping out a year’s gains.
Mr Calver, a former boss of Lovefilm, had bolstered Mothercare’s online service but suffered a sales decline over the critical Christmas trading period. Analysts pointed to Mr Calver’s decision to cancel the company’s free delivery offer as a reason behind the sales fall.
For almost a decade Mr Newton-Jones was chief executive of Shop Direct, which operates Littlewoods and Very.com. Before that he worked at Next, leading its Directory business.
Mr Newton-Jones will take the role from March 17 but will not gain a seat on the board while Mothercare searches for a permanent replacement.
Mr Calver stood down as chief executive with immediate effect but will stay with Mothercare until the end of March to provide “transitional support”.
Alan Parker, chairman of Mothercare, said that Mr Newton-Jones’ “leadership skills and depth of experience in retailing through stores and online will further enhance our drive to deliver the recovery of the UK business to complement the strong and growing international operations”,
Men’s Wearhouse Inc. (MW) agreed to buy smaller rival Jos. A. Bank Clothiers Inc. (JOSB) for about $1.8 billion in cash, ending a five-month takeover battle between the two menswear retailers.
Both companies’ boards have approved the transaction, the retailers said today in a statement. Jos. A. Bank also will terminate a separate deal to buy the Eddie Bauer brand and cancel a plan to buy as much as $300 million of its own stock.
Today’s agreement settles a feud Jos. A. Bank began in October with an offer for its larger rival. Men’s Wearhouse turned down that proposal and countered with multiple bids for Jos. A. Bank, all of which were rejected as too low. Jos. A. Bank said it would begin talks with Men’s Wearhouse last month following a sweetened $1.78 billion offer.
“It’s a strong acquisition that is mutually beneficial to both companies and shareholders of both companies,” Mark Montagna, a Nashville, Tennessee-based analyst for Avondale Partners, said in a phone interview.
Jos. A. Bank, based in Hampstead, Maryland, rose 3.9 percent to $64.22 at the close in New York. Houston-based Men’s Wearhouse climbed 4.7 percent to $57.14.
The combined company will have more than 1,700 U.S. stores and sales of about $3.5 billion. Jos. A. Bank can benefit from Men’s Wearhouse’s tuxedo-rental business, while Men’s Wearhouse can learn from Jos. A. Bank’s ability to inexpensively source products, Montagna said.
The deal will result in as much as $150 million of annual savings realized over three years, the companies said today. Jos. A. Bank’s approximately 600 stores will retain their name.
Those savings may come at an opportune time for Men’s Wearhouse. The retailer said in a separate statement today that it had a fourth-quarter adjusted loss of 38 cents a share, worse than the 9-cent loss estimated by analysts. Sales in the quarter ended Feb. 1 fell 7.9 percent to $560.6 million, trailing analysts’ $611.3 million average estimate. Same-store sales declined 2.5 percent, with weather-related closings accounting for 25 percent of the decline.
Jos. A. Bank had been told by five of its largest shareholders to start talking to its rival about a sale, people with knowledge of the matter said in January.
The retailer imperiled the possibility of a tie-up with Men’s Wearhouse in February, when it agreed to buy the Eddie Bauer brand in an $825 million deal that would have created a company too big for its suitor to acquire.
Eminence Capital LLC, a New York-based hedge fund that owns shares in both companies, applauded the agreement in a statement today. Eminence Chief Executive Officer Ricky Sandler said the firm is “happy to see these two great companies coming together.” Sandler said in February that the offer represented “a superior alternative” for shareholders over the Eddie Bauer deal.
Men’s Wearhouse had sued Jos. A. Bank, saying it was “economically irrational” for its rival to use the Eddie Bauer deal to fend off a merger. Men’s Wearhouse also accused Jos. A. Bank directors of breaching their fiduciary duties by enacting a shareholder rights plan, or poison pill, to make it more difficult for an acquirer to buy the company.
Golden Gate Capital Corp., the San Francisco-based private-equity firm that was selling Eddie Bauer, said it respects Jos. A. Bank’s decision to terminate the deal and is pleased to continue owning the brand.
Men’s Wearhouse’s $65-a-share purchase price is 56 percent higher than Jos. A. Bank’s closing price on Oct. 8, the day before its offer for Men’s Wearhouse was publicly disclosed.
“They finally got to where they felt like it was in everyone’s best interest to do the deal,” said Craig Hodges, chief investment officer of Dallas-based Hodges Capital Management Inc., which recently sold its Jos. A. Bank stake. “They got quite a bit more than what they were originally offered, so it sounds like they did a good job of negotiating.”
Men’s Wearhouse and Jos. A. Bank hold a combined 29 percent of the men’s clothing-store market, according to a September report by Vanessa Giraldo, an industry analyst at IBISWorld Inc.
Suits and formal wear accounted for an estimated 32 percent of menswear revenue in 2013, the largest share of industry sales, Giraldo said. Revenue in the men’s clothing industry is forecast to grow 3.1 percent a year to $10.9 billion in 2018.
“Suits are going to change a little bit in color and style, but they’re not going to fade away,” Giraldo said in a phone interview.
Suit spending that had shifted toward department stores and online retailers since the recession is likely to move back toward specialty stores because they have better service, she said.
The men’s suiting industry has evolved since the early 1990s, when work environments became more relaxed and casual Fridays were introduced, Tom Julian, men’s fashion director at the Doneger Group, a New York-based researcher of industry trends, said in a phone interview.
Now, with the ubiquity of the Internet and Millennials who came of age shopping for themselves, men are more aware of fashion and interested in wearing suit separates, buying brand names and imitating styles like the shrunken suit look inspired by the television show “Mad Men,” Julian said.
In response, retailers must adapt to provide men with more than a uniform, he said.
“There’s a guy who can go in and find a pseudo designer look at a great price at a corner store or at a mall,” he said. “It’s very self-expressed, it’s not driven by rules and fashion dictation but by likes and personal choices.”
Tesco is preparing the ground for the departure of its finance director amid tensions with its chief executive as the retail giant attempts to reverse the declining fortunes of its core UK operations.
Sky News has learnt that Laurie McIlwee, who has served as Tesco’s chief financial officer since 2009, could leave the company within months.
The company is understood to have held discussions at a senior level about Mr McIlwee’s position since an investor presentation late last month at which it ditched a key profit margin target.
Mr McIlwee, who has in the past been the focus of doubts expressed by unidentified City investors, is said to have an uncomfortable working relationship with Philip Clarke, Tesco’s chief executive.
A formal search for a new finance director is not yet thought to be underway, but senior sources said on Sunday that Mr McIlwee’s exit was now “more likely than not” at some stage this year.
“The feedback [from some investors] was that the status quo is not tenable,” one insider said.
If Mr McIlwee does depart, it would represent the latest stage of a sweeping overhaul of the executive management at Tesco, which still possesses a commanding share of the British grocery market.
Its seemingly-unassailable position has, however, begun to look more vulnerable as so-called ‘hard discounters’ such as Aldi and Lidl have eaten into its market share.
Last month, Tesco told investors that it would plough £200m into lowering the price of everyday food staples, while also scaling back the volume of new store space it will open in the UK this year.
The chain reported a 2.4% fall in like-for-like sales during the important Christmas trading period, adding its name to those of Wm Morrison, Debenhams and Marks & Spencer, which also saw festive sales disappoint the City.
Some investors have questioned whether the proposed new phase of Tesco’s price-cutting campaign will go far enough to win back the custom of shoppers who have defected elsewhere.
Mr McIlwee’s departure as chief financial officer would leave Mr Clarke with a crucial post to fill as he battles to convince shareholders that his plan to revive Tesco deserves long-term backing.
An external appointment is seen by investors as the most likely route to rebuilding the group’s executive team.
The head of Tesco’s UK business was replaced shortly after Mr Clarke took over from Sir Terry Leahy in 2011.
In addition to the challenges in the UK, Tesco is navigating its way through the establishment of a new joint venture in China, into which it will fold is existing assets there.
A similar outcome is expected in Turkey, where Tesco has also struggled to make a success of its standalone business.
Mr McIlwee joined Tesco in 2000 as the finance director of its UK business, prior to which he had worked for PepsiCo, the multinational food and drink company, in a variety of roles.
Last autumn, the Financial Times quoted an unnamed top 20 shareholder in Tesco as saying that there were “worries” about Mr McIlwee.
“He is very abrasive and is not communicating very well with shareholders… If things keep going wrong for Tesco, then his position could come under threat,” they were reported to have said.
Tesco is far from the only major UK food retailer facing questions about its strategy.
Morrison’s will announce full-year results this week alongside which it is expected to announce the sale of some of its property assets following weak trading.
Saks Fifth Avenue’s Canadian stores will feature large upscale food departments, modelled on the food hall at London’s iconic Harrod’s department store. Toronto will become home to the world’s first Saks food hall, and it’s expected to open in the fall of 2015 within the new Saks Fifth Avenue store at the Toronto Eaton Centre. Other Canadian locations will follow.
It’s by no accident that Canadian Saks stores will feature Harrod’s-like food halls: Saks’ new CEO, Marigay McKee, was ‘chief merchant’ at Harrod’s before joining Saks in September of 2013. Food halls will differentiate Canadian Saks stores from competitors Holt Renfrew and Nordstrom. The Canadian food halls will be unique to the company as well: currently, no other Saks stores carry extensive food offerings.
Toronto’s Hudson’s Bay/Toronto Eaton Centre will be Saks’ first Canadian location. Photo: Darrell Bateman
The Hudson’s Bay Company’s CEO Richard Baker estimates the size of Saks’ food halls to be approximately 25,000 square feet. A second 25,000 square foot Saks food hall is expected to open in 2016 within a 130,000 square foot Saks Fifth Avenue store at Toronto’s Sherway Gardens shopping centre. Subsequent Saks locations are expected to be announced for Montreal, Vancouver, and possibly Calgary.
The 25,000 square foot Saks food departments will be similar in size and, in some cases, larger than some urban grocery stores. Many Downtown Toronto grocery stores are smaller than what Saks has proposed (for example, McEwan’s new Downtown Toronto grocery location will be only about 9,000 square feet). Downtown Vancouver’s three Urban Fare grocery stores are each about 20,000-25,000 square feet. Montreal’s recently opened Marché Adonis is only 14,000 square feet, while its new Les 5 saisons store is almost 10,000 square feet. We can expect prices to differentiate the Saks grocery stores from the competition: Saks will no doubt be more expensive. As a tradeoff, however, we may expect a high level of service and beautiful store interiors at Saks’s new Canadian food halls.
An example of Harrod’s popular food hampers. Saks Fifth Avenue may replicate the concept for its Canadian Saks food halls [Image Source]
These food halls will immediately differentiate Canadian Saks stores from their American counterparts. There are currently no food halls in American Saks stores, though that may change under the direction of Marigay McKee. Finding approximately 25,000 square feet of space within existing American Saks stores will be a challenge; if Saks replicates its Canadian strategy, some American Saks stores may have to expand in size to accommodate food halls.
Harrod’s food hall features fresh meat and seafood, fine chocolates and desserts, cheeses, baked goods, prepared foods, other miscellaneous food items (including packaged items and its popular hampers) and fine wines. Wine and alcohol sales at Canadian Saks stores will likely be dictated by provincial liquor laws.
It will be interesting to watch if Canadians embrace Saks Fifth Avenue’s new luxury food halls, and it will also be interesting to see how competitor Holt Renfrew reacts. Rumour has it that Holt’s could expand further into food offerings as well, and we’ll provide further details when permitted. Holt’s will have to act quickly, however, as Saks’ first food hall is expected to open in September or October of 2015 within the Hudson’s Bay building at the Toronto Eaton Centre.
It has been confirmed by New Look that its chairman, Alistair McGeorge, is to step down from the Board at the end of May 2014 to pursue other opportunities.
McGeorge who entered the fashion retailer in 2011 following the retailer’s then chief executive, Carl McPhail’s departure. At that time, the retail had made pre-tax losses and McGeorge helped turn around the budget fashion brand back to growth, including assisting in the refinancing of the firm’s £1 billion debt.
In October 2013, McGeorge withdrew from his position as executive to non-executive chairman and handed over his responsibility to chief executive Ander Kristiansen to help guide the retailer to its next phase of the development which included its entry into China and make it a successful international brand.
Currently, the retailer’s founder, Tom Singh, will transition from commercial director to interim non-executive chairman until the firm finds a permanent successor.
McGeorge said: “I have greatly enjoyed my time at New Look but I feel that it’s the right time to seek new challenges. I am very proud of what we have achieved and I am fully confident that the Company will continue to flourish under Anders and his team. I wish all my colleagues the best for the future.”
Lidl is planning to add 20 new stores to its current 525 stores located across Spain in a EUR 180 million investment. Additionally, the retailer is also aiming to launch another warehouse in Murcia this autumn.
German discount supermarket is also looking to invest in a batch of existing stores, its Spanish arm’s spokesperson said. “We will invest as well in other 50 existing stores in order to increase the sales room and add new products in the assortment.”
The firm is also working on improving ranges in its existing outlets.
According to Kepler Cheuvreux retail analyst Inigo Egusquiza, the data showed Lidl was posting the highest growth in Spain, he said: “We believe that 2014 will be another tough year for the Spanish food retail industry with many different players expanding business including Dia, Lidl, Mercadona, Carrefour, ECI, Eorski among other players. We also believe that 2014 might be a tougher year than 2013 from a pricing perspective as Dia has already announced the intention of becoming more aggressive in pricing to try to turn around the negative LFL published in 2013.”
Staples Inc., the largest U.S. office supplies retailer, forecast a fall in current-quarter sales as it loses customers to mass market chains and e-retailers, and the company said it would close up to 225 stores in North America by 2015.
Staples’ shares fell 9 percent before the bell, after the company also posted lower-than-expected fourth-quarter results and forecast current-quarter profit below analysts’ estimates.
The company operates 1,515 stores in the United States and 331 stores in Canada.
Staples said it had initiated a multi-year cost reduction plan that was expected to generate annualized pretax cost savings of about $500 million by 2015.
Rival Office Depot said last week that it expected sales to continue falling in 2014, after reporting a surprise quarterly loss.
Staples and Office Depot have been struggling to keep shoppers from turning to mass merchants such as Wal-Mart Stores and online retailers like Amazon.com.
Staples has been shifting its focus to new categories such as tablets, breakroom supplies and copy and print services from traditional office supplies such as paper and toner.
It has also increased the number of items it sells online.
The company forecast earnings of 17-22 cents per share for the first quarter.
Analysts on average were expecting 27 cents per share, according to Thomson Reuters I/B/E/S.
Staples’ revenue fell 10.6 percent to $5.87 billion in the fourth quarter ended February 1, below the average analyst estimate of $5.97 billion.
Excluding the impact of an extra week in the year-earlier quarter, sales declined 4 percent.
Same-store sales in North America, excluding sales through Staples.com, fell 7 percent as Staples sold fewer business machines, technology accessories, office supplies and computers.
Revenue at the company’s international division fell 13 percent, hurt by weakness in Europe and Australia.
Net income from continuing operations rose to $212 million, or 33 cents per share, from $90 million, or 14 cents per share, a year earlier.
Staples earned 33 cents per share from continuing operations, excluding items. Analysts on average had expected 39 cents per share.
The company’s shares closed at $13.40 on the Nasdaq on Wednesday.
LONDON, United Kingdom – British retailer Tesco, under pressure to turn around declining sales in its domestic market, is considering reducing its exposure to Turkey, the Financial Times reported on Friday.
Tesco, the world’s third-largest retailer, is looking at combining its operations in Turkey, where it trades as Kipa, with the country’s biggest food retailer Migros, the paper reported, citing people familiar with the situation.
A deal could be along the lines of that which last year enabled it to fold its unprofitable Chinese operation into a state-run Chinese company as a minority partner.
“We don’t comment on rumour or speculation,” a Tesco spokesman said.
The owner of Migros, private equity firm BC Partners, also declined to comment.
Tesco is almost two years into a 1 billion pound ($1.6 billion) turnaround plan in Britain, where it generates two thirds of its revenues but has been losing ground after focusing investment on overseas expansion.
In addition to the Chinese deal last year, it also called a half to its loss-making Fresh & Easy venture in the United States. It pulled out of Japan in 2012.
Tesco said in October that its 191 stores in Turkey had a poor first half and that some restructuring of operations in the east of the country was possible.
The company’s chief financial officer, Laurie McIlwee, said then that its western business around the Mediterranean coastline was “very profitable” and that Tesco had no plans to exit Turkey.