Monthly Archives: May 2014
Canada is an international retail ‘hot spot’, according to the world’s foremost fashion-industry trade publication. Many international retailers are contemplating Canadian expansions, following Nordstrom and Saks Fifth Avenue’s lead. Home-grown retailers will need to innovate to compete, or risk facing demise, like bankrupt retailer Boutique Jacob.
Women’s Wear Daily referred to it as the ‘department store effect’: following Nordstrom and Saks Fifth Avenue’s announcements that they would open in Canada, other international retailers followed. Mary Mowbray, Senior Vice President of the retail group at Colliers International in Toronto, said the following:
“The Canadian consumer weathered the downturn better. They have more money to spend and are more comfortable spending it. Traditionally there have been fewer players in the mid- and higher tiers in Canada, and that’s left an opening for more brands to enter here.”
Rents on desirable streets in Toronto, Montreal and Vancouver are all rising. On Vancouver’s Alberni Street, rents jumped 43 percent between 2012 and 2013, averaging $147 per square foot. Alberni Street recently saw Tory Burch and De Beers store openings, and several of the world’s top luxury brands are currently examining Alberni Street retail space.
Laura Pomerantz, principal of her own real estate firm, said that growing tourism and a burgeoning Asian population in British Columbia triggered much of the expansion. Specifically, she said:
“You have a savvy and sophisticated customer in Canada who recognizes brands and is brand conscious. You have a lot of tourism between Canada and America, and that makes a built-in customer base.”
Not all is rosy for new retail entrants: Target lost almost $1 billion last year from its floundering Canadian operations, battling poor customer perception as well as empty shelves. Nordstrom Rack recognized Target’s struggles, delaying its Canadian debut until 2017.
Some Canadian retailers will struggle with the new competition, a fate most recently exemplified by Boutique Jacob’s bankruptcy. According to retail consultant David Ian Gray, other Canadian bankruptcies could follow, if retailers fail to innovate in the face of new competition.
COLUMBUS, Ohio, May 30, 2014 /PRNewswire/ — Express, Inc. (NYSE: EXPR), a men’s and women’s specialty retail apparel chain operating over 600 stores, today announced that one of its subsidiaries has entered into a franchise agreement with Edcon Group, a retail franchise operator in South Africa, to bring the Express brand to South Africa.
The Express brand is expected to launch as a store-in-store concept at select Edgars department stores by the end of 2014 with standalone Express store locations to open in 2015.
Michael Weiss, Chairman and Chief Executive Officer of Express stated that, “We are thrilled that the Express brand is going to be in South Africa, representing an exciting next step in our international expansion strategy. It’s a terrific market in terms of having a customer base our brand should resonate with. We are grateful to be working with Edcon to make it happen.”
Edcon Chief Executive Officer, Jurgen Schreiber says: “We are excited to be able to introduce Express and its on-trend fashions to the South African customer. Having such a fashion forward, established brand will enhance our ever-growing international brand offering in South Africa.”
Express has identified international expansion as one of the company’s four pillars of growth and a significant long-term revenue opportunity for the company given the fashion content of the brand and the universal appeal to the 20-30 year old demographic. Express serves a diverse customer base in the company’s U.S. stores in both tourist and border geographies. Currently there are 11 Express franchise stores in the Middle East and 15 franchise stores in Latin America.
About Express, Inc.
Express is a specialty apparel and accessories retailer of women’s and men’s merchandise, targeting the 20 to 30 year old customer. The Company has over 30 years of experience offering a distinct combination of fashion and quality for multiple lifestyle occasions at an attractive value addressing fashion needs across work, casual, jeanswear, and going-out occasions. The Company currently operates more than 600 retail and factory outlet stores, located primarily in high-traffic shopping malls, lifestyle centers, and street locations across the United States, Canada and Puerto Rico. Express merchandise is also available at franchise stores in the Middle East and Latin America. The Company also markets and sells its products through the Company’s e-commerce website, http://www.express.com.
Edcon is South Africa’s largest non-food retailer, with a market share of the South African clothing and footwear (C&F) market nearly twice that of its nearest listed competitor, trading through a range of retail formats. The Group has grown from opening its first store in 1929, to trading in 1 402 stores (as at 28 December 2013) in South Africa, Botswana, Mozambique, Namibia, Swaziland, Lesotho, Zambia and Zimbabwe. Edcon has been recognised in national surveys as one of the top companies to work for in South Africa and continues to make significant progress in its equity and transformation goals.
Our retail businesses are structured under three divisions: Edgars division, including Edgars, Boardmans, Edgars Active, Edgars Shoe Gallery, Red Square and the Group’s mono-branded stores such as Topshop Topman, Tom Tailor, Dune, Lucky, T.M. Lewin, Lipsy, Inglot, La Senza and Accessorize whose product is also available through Edgars stores, serves principally middle and upper income markets; Discount division including Jet, JetMart and Legit, serves principally middle to lower income markets; and CNA, the Group’s stationery, books, games, movies, music, hi-tech electronics and mobile retailer. The Edcon Credit and financial services division provides credit and insurance products to the Group’s customers.
With the launch of its “Thank U” loyalty programme, Edcon now has the largest retail customer database in South Africa which enables it to provide customers with relevant offers across its suite of retail and financial services products; this programme includes all mono-branded stores in South Africa.
For more information, please visit the Edcon website: http://www.edcon.co.za
Edgars is the Department Store of Choice for Men’s, Ladies, Kidswear, Footwear and Accessories for every occasion. Showcasing the widest range of the latest’s fashion trends from top international brands to own private label brands; Edgars offers something for everyone. There are 181 Edgars stores in South Africa including neighbouring countries.
Mr Price puts R2bn into staying on top
Shoppers browse through a Mr Price Home outlet. Picture: SUNDAY TIMES
MR PRICE will invest R2bn over the next three years to entrench its position as the continent’s leading fast-fashion value retailer.
The group, which on Tuesday reported diluted headline earnings per share growth of 22.4% for the year to March, is increasing its focus on new sales channels such as the internet. Online sales have grown threefold and the group will also expand its footprint into markets such as West Africa.
Mr Price is building a new distribution centre in Durban and investing in more stores and new merchandise systems.
These investments are being made against the backdrop of heightened competition as global retailers enter South Africa and peers such as Woolworths look to add scale through apparel buyouts.
Mr Price CEO Stuart Bird said the performance of new channels and markets was “very encouraging” and provided “early support for our intentions of taking our proven business concepts to new territories, rather than looking for acquisitive growth”.
Mr Price reported diluted headline earnings per share of 715.1c and a dividend of 482 c a share was declared, up 21.1%.
The company has taken market share from beleaguered Edgars, which is in the midst of a turnaround, and from credit rivals Truworths and Foschini Group, who have curbed credit extension due to the high levels of consumer indebtedness.
Sales at the apparel division — which houses Mr Price, Mr Price Sport and Miladys — grew 17%, to R11.4bn, with comparable store sales growth at 11.9%.
The group was “absolutely bulletproof”, said 36One Asset Management equity analyst Daniel Isaacs.
“You can’t fault these guys. The apparel sales were just superb. I think they’ve definitely picked up a lot of market share. In this economic storm I think Mr Price is probably the best positioned out of all of them (clothing retailers),” Mr Isaacs said.
The Home division, consisting of Mr Price Home and Sheet Street, grew 10.2% to R4.2bn, with comparable store sales growth up 7.3%.
The slower growth in this segment is in line with broader market trends as sales of home products tend to be more discretionary.
Mr Price’s cautious approach to credit resulted in cash sales growth of 16.1% outstripping credit sales growth of 9.6%.
“We may have lost some sales opportunities by restricting our credit growth, but we are confident that this approach remains the right one,” Mr Bird said.
Trade receivables increased 13.1% to R1.8bn, with much of the growth occurring in the first half of the financial year. The net bad debt to book ratio increased from 6.5% to 7.6%.
Mr Price started its online offering in 2012 and now ships to more than 130 countries.
An online presence is key to entering new markets, especially where space is a constraint or rentals are high — this is especially the case in many African countries.
“Online is growing so quickly, it’s already a moving target. We’re already doing R10m a month,” Mr Bird said.
Mr Price will open two stores in Nigeria and one in Ghana, and is also in the early stages of looking at the Angolan market.
Mr Price online sales surges 300%
Value fashion retailer Mr Price said online sales grew as much as 293.4% for the year ended March 2014.
The group took its home-ware division, Mr Price Home, along with Sheet Street, online in November, while Mr Price Apparel launched its online sales platform in South Africa in July 2012 and internationally in July 2013.
CEO, Stuart Bird, said that the local online offers for Mr Price Sport and Financial Services is planned for the new financial year.
“The online sales platforms are gaining momentum. During the year, the Apparel division opened its site globally and has shipped to over 130 countries,” he said.
Mr Price said that the number of units sold increased by 4.9% to 216.9 million, while trading space continued to expand, with 68 new stores being opened and 18 non performing stores being closed. At year end there were 1,079 corporate owned and 23 franchise stores.
For its financial services division, revenue increased in: insurance premium income by 38.1%, airtime sales by 41.7% and debtors’ interest and fees by 19.2%. The group said its international stores in Ghana and Nigeria continue to perform well, and additional stores are planned in both territories this year.
In March 2014, Nigeria became another multi-channel market for the group, when it became the first international e-commerce retailer to open with an in country operation.
Mr Price said that the performance of its new channels and markets, being online and West Africa, “are very encouraging, providing early support for our intentions of taking our proven business concepts to new territories, rather than looking for acquisitive growth.”
Overall, Mr Price Group reported a diluted headline earnings per share of 715.1 cents, up 22.4%, and dividends per share of 482.0 cents, up 21.1%. Total revenue increased by 15.2% to R15.8 billion while retail sales were up by 14.8% to R15.2 billion. Profit from operating activities improved 22.6%, to R2.5 billion.
“Looking forward, we are preparing for the tough SA retail environment to persist for the remainder of the year,” the chief executive said.
“Strategically the group is well placed to gain market share, however will be wary as competition will intensify and there are elements of the business that retail merchandise which is more discretionary in nature,” Bird said.
“We will devote appropriate time and effort to crystallising the entry strategies of our Mr Price brands (Apparel,Home and Sport) into new markets while being mindful of the challenges in the local market,” he said.
The group plans to invest in excess of R2 billion over the next three years to provide the means to realise its vision, which is to be a top performing international, omni-channel
retailer.From 2014 Copyright, BusinessTech. All right reserved.
A shop unit in Hong Kong’s Russell Street has been sold for $23m (£13.7m), making the shopping street the most expensive rental area in the world.
Hong Kong property power broker Sebastian Skiff said he believes it is a new record, beating New York City’s Fifth Avenue to the pricey shopping top spot.
Mr Skiff gave Bloomberg’s Betty Liu a tour of Russell Street and Causeway Bay, which houses luxury clothing and accessories brands such as Rolex and Gucci.
FRANKFURT, May 27 (Reuters) – Permira is selling a 5.6 percent stake in Hugo Boss, the latest step by the private equity house to exit from its investment in the German fashion retailer.
Hugo Boss said in a statement late on Tuesday that an investment company controlled by Permira is placing up to 3.96 million Hugo Boss shares in an accelerated book building process.
As a result of the placement, the free float of Hugo Boss AG will increase to around 48 percent of the share capital.
The latest sale will cut Permira’s 55.62 percent stake, but still leave the investment company as the largest shareholder in Hugo Boss.
Permira, which owns the Hugo Boss stake via its Red & Black investment vehicle, last sold off shares in May 2013 and November 2011, when it reduced its stake by 10 percent and 6.4 percent respectively. (Reporting by Edward Taylor; Editing by Dan Grebler)
HONG KONG – The China operating arm of U.S. retailer Wal-Mart Stores Inc said on Tuesday it planned to invest 580 million yuan ($92.99 million) to remodel 55 existing stores in China this year to enhance store operations and optimize customer experience.
Wal-Mart China also said it will open about 30 high-quality stores and additional distribution centers in China this year as part of its three-year growth plan announced last October.
China is key to Wal-Mart’s international ambitions but it has stumbled in a market where consumers value safe and authentic food over the low prices for which the retailer is known.
The announcement comes almost a month after Wal-Mart appointed a new chief executive for the China region, where the world’s largest retailer is battling stiff competition from local rivals. Sean Clarke, current chief operating officer in China, will take over the China CEO role from June 1.
The U.S. retailer, which operates about 400 units in China, said last October that it would open up to 110 facilities in the country between 2014 and 2016 and was looking to close 15-30 others over the next 18 months as part of a rationalization process in the country.
Its local rival, Sun Art Retail Group Ltd, said in March it would continue to maintain steady new store expansion after China’s top hypermarket operator posted a 15.2 percent rise in 2013 net profit with an expanding store network helping it shrug off an economic slowdown.
London is home to more international retail brands than any other city in the world, boosting its credentials as a global retail powerhouse.
A total of 31 international retailers opened stores in London for the first time last year, including US fashion retailer J Crew and luxury brand Tom Ford.
This means that 57pc of international brands – almost three in five – have a presence in London, according to a survey by property agent CBRE.
London claimed number one in the list ahead of Dubai, where 55.3pc of brands are present. New York was in third place ahead of Moscow, Shanghai, Paris and Hong Kong.
The survey highlights London’s status as a destination for international investment and the cosmopolitan nature of its major high streets and shopping centres, such as Regent Street and Westfield London.
Eric Eastman, executive director for luxury goods and international retailers at CBRE, said: “London now attracts more international visitors that any other capital in the world. A flood of brand-hungry overseas shoppers, many from China, has swept into Central London. Space demand from luxury and international retailers has moved into hyperdrive as a result.”
Mr Eastman said international brands are now looking to open outside London’s traditional retail heartlands, such as Covent Garden.
He added: “There are simply too many global brands now for the traditional pitches in London to absorb them, which is why we are starting to see lettings to Dior and Chanel in Covent Garden and Philip Lim and Carven in Brompton Cross.”
However, while London is the most popular destination overall, Paris is catching swiftly. The French capital attracted 50 new brands to its streets last year, more than any other city.
The most ambitious retailers were Michael Kors and Zara, which entered more new cities than other businesses. H&M, Hollister and Britain’s Superdry were also in the top ten.
US retailers accounted for one in four new entrants, with Italy claiming 16pc and UK chains the third most expansive, accounting for 12pc of new entrants.
JOHANNESBURG May 27 (Reuters) – South Africa’s biggest apparel retailer, Mr Price Group Ltd, broadly met forecasts with a 22 percent rise in full-year profit on Tuesday as cash-strapped shoppers flocked to its no-frills stores.
Mr Price, which runs discount stores of the same name, said diluted headline earnings totalled 715.1 cents a share in the year ended March 29, largely in line with an estimate of 719 cents in a Reuters poll of 12 analysts.
Headline EPS, the main profit measure in South Africa, strips out certain one-off and non-trading items.
Retail sales rose 15 percent to 15.2 billion rand ($1.47 billion) and the company raised its annual dividend by 21 percent to 482 cents per share.
South African retailers have been squeezed in recent years as their consumers battle with high personal debt, rising fuel and electricity prices and high unemployment.
But Mr Price, whose market value has shot past its nearest rivals Foschini Group and Truworths in recent months, has fared better because of its budget-friendly products.
Shares in the company, which are up about 8 percent so far this year, were down 0.38 percent at 167.70 rand by 1231 GMT, outpacing rivals Foschini and Truworths, which were down nearly 2 percent and more than 2.5 percent, respectively.
($1 = 10.3574 South African Rand) (Reporting by Tiisetso Motsoeneng; editing by David Dolan)
Roberto Cavalli is in talks with Bahrain-based private equity group Investcorp about a sale of a majority stake in his eponymous Italian fashion brand after failing to reach an agreement with Permira, reports the FT.
Cavalli is ready to consider a sale that would value the luxury company at 450 million euro including debt, equal to more than 15 times earnings before interest, taxes, depreciation and amortisation. The designer seems to be willing to make a decision by the end of June, however, discussions with Investcorp are at an early stage.
Takealot.com, South Africa’s fastest growing online retailer, has raised over $100 million for continued expansion in South Africa and sub-Saharan Africa.
The South African market has shown encouraging signs of ecommerce growth in the past three years as an increasing number of consumers become accustomed to transacting online. The potential for ecommerce is large: In a retail market in excess of R500 billion, online transactions currently account for less than 1%.
Tiger Global Management has invested in some of the leading online retail companies globally, including in India, China and Brazil.
“We are very excited about Tiger Global’s continued support of the business. This will allow us to accelerate growth and drive scale while continuing to delight our customers. We have tremendous potential in a large sustainable market and we are excited to keep investing for the long-term,” said Kim Reid, takealot.com CEO.
“We have been impressed with takealot.com’s execution since our initial investment in 2010 and believe the company is establishing a strong leadership position in South Africa and sub-Saharan Africa. takealot.com delivers a great customer experience, and we support its aggressive growth strategy,” said Lee Fixel, Partner at Tiger Global Management.
Global investment banking firm, Jefferies Group LLC acted as financial advisor on the transaction.
Selfridges is planning to revamp its flagship London store, famous for extravagant window displays, in a £300m, five-year investment.
The group will begin redeveloping the Oxford Street site next month in what Selfridges describes as the largest ever single investment in a department store.
The accessories offering will be expanded, with the handbag department more than doubling to encompass 50,000 sq feet, and a new store entrance will be created on the east side of the building, on Duke Street.
In addition, the bulk of the Selfridges UK head office will be moved to Wigmore Street nearby.
Galen Weston, Selfridges chairman, said: “This significant investment in the redevelopment of our Oxford Street store is part of our commitment across all our businesses to provide leading luxury shopping experiences for our customers around the world.”
Mr Weston, a Canadian billionaire, bought the department store group in 2003. The business was founded by American Harry Gordon Selfridge in 1909.
Bawabat Al Shamal Real Estate Company (BASREC), owner of Doha Festival City, which will be Qatar’s largest mall upon completion, has awarded a QAR1.65bn ($453m) construction contract.
The company said in a statement that Gulf Contracting Company in a joint venture with ALEC Qatar has won the main works contract for the mall.
The award of the contract is a significant milestone towards the completion of the development which is scheduled to open in the third quarter of 2016.
Upon completion, Doha Festival City Mall will be Qatar’s largest shopping mall with a gross leasable area of some 250,000 square metres.
It will house 550 outlets including 85 restaurants and cafes, the country’s first-of-its-kind Entertainment Zone, which will include VOX Cinemas and a snow park, and will feature around 8,000 parking spaces.
Phase one of thee mall was completed last March and included the construction of Qatar’s first IKEA store.
Kareem M Shamma, CEO, BASREC, said: “We have already signed tenancy deals with the region’s retail powerhouses, including Azadea, Alshaya, Landmark, Apparel, Rivoli, Dubai Holding Group, and Al-Futtaim Retail.
“Our main objective is to provide all of Qatar’s residents and visitors witha memorable experience every time they visit us.”
The mall’s substructure works contract for the construction of basement and ground floor levels was previously awarded to the same contractor in January. The main works contract is due to start in July.
Speaking on behalf of the GCC/ALEC JV, Darrell Bergesen, ALEC Qatar GM and Grahame McCaig, GCC GM, said: “We are delighted to have put forward a winning proposition for this scheme, which we have followed for a considerable period of time. This award is the culmination of a huge effort by the respective partners’ estimating, commercial, and technical teams.”
New British lingerie label All Undone is thrilled to announce their two new stockists: Edinburgh boutique Odyssey, and new luxury lingerie site Full Disclosure, which will join the brand’s growing team of partners across the UK, the USA and Australia. Catering specifically for the smaller back size, larger cup size market, All Undone is inspired by the luxury of vintage fabrics, showcased within a contemporary design.
Full Disclosure Managing Director, Shirine Modad Neill, said: “It was crucial for us to launch our website with All Undone as part of our portfolio; not only because they cater to larger cup-sized women but because they are offering an equally gorgeous, luxurious and contemporary option that no one else is. All Undone hasn’t re-invented the classics, they’ve started a very cool trend for the DD+ cup-sized market!”
Along with publication of its annual results, Giorgio Armani announced that it was taking 100% control of its fast-fashion brand A/X Armani Exchange. The Milanese designer launched the mens and womenswear collection in 1991.
The young and urban line, consisting essentially of t-shirts, jeans, shirts, etc. is the group’s most affordable and caters mainly to the American market, while also made available in Asia.
To accelerate development of the nascent line, Giorgio Armani co-established the joint venture company Presidio Holdings Ltd in 2005 alongside Como Holdings, the company owned by the Singaporean tycoon Ong Beng Seng Singapore that, since 1994, has held the production and distribution license for A/X Armani Exchange in the United States, Canada, Central and South America and Asia-Pacific.
Initially, the Italian company held 25% of Presidio Holdings, the remaining 75% in the hands of Como Holdings. In 2008, however, Giorgio Armani acquired an additional 25% stake. It has now acquired the remaining 50% “ensuring full ownership of the brand, which has 270 stores and over 3,000 employees,” the company said in a statement.
“It is essential to maintain control over a brand that is so important, especially in the American market. This acquisition will allow us to expand distribution and have more say in the brand’s products and image,” said Giorgio Armani in an interview with Il Sole 24 Ore.
The goal for the group is to develop “the first global Italian fast-fashion brand targeting a young customer whose DNA is strongly Armani,” said the house.
With that in mind, last year A/X Armani Exchange recruited the renowned designer Patrick Robinson as creative. The American has also been charged with overseeing product development in order to provide creative direction for the label’s marketing division and to ensure brand consistency.
Christian Dior opened this week a new store in Florence, Italy. The new Dior store is located on Via Tornabuoni, the city’s prime luxury shopping destination, within the Medieval Tower of Gianfigliazzi. The store features the complete range of Dior women’s collections.
Also this week, Christian Dior inaugurated a leatherwear manufacturing facility outside Florence in the town of Scandicci. The new manufacturing facility specialized in handbags and leather accessories.
Marks & Spencer is facing another setback in its attempts to get its financial performance back on track with the head of the retailer’s international business likely to depart.
Jan Heere, who was hired from Inditex, the owner of Zara, in 2011, is understood to be returning to a role in Russia, although he is yet to resign from his role at M&S.
As director of international Mr Heere has been at the forefront of a drive by Marc Bolland, chief executive, to evolve M&S into an “international multi-channel retailer”.
Last month M&S unveiled plans to step up its international expansion by opening 250 new stores outside the UK in the next three years.
Mr Heere joined M&S after five years running Inditex Russia. Mr Heere had worked for Inditex, the biggest retailer in the world since 2002.
An M&S spokesperson said: “We have a highly talented team at M&S, of course other businesses will be interested in our people, just like we always keep an eye on external talent. Jan Heere has not resigned and we have nothing further to say on this matter.”
On Tuesday M&S reported a decline in annual profits for the third year in a row. Mr Bolland conceded that “more needed to be done than we thought” to modernise M&S.
Pittsburgh – On the heels of disappointing results for the first quarter of fiscal 2014, American Eagle Outfitters Inc. has decided to close 150 stores in America, including 100 namesake stores. For 2014, the company is planning to close approximately 50 American Eagle and 20 aerie stores in North America.
Beginning in 2015, the company anticipates annualized after-tax savings of approximately $10 million-$15 million related to these store closures.
American Eagle’s net income plummeted 86% to $3.87 million from $27.98 million. Total net revenue fell 5% to $646.13 million from $679.48 million.
Same-store sales fell 10%. A significant decline in pretax income drove American Eagle’s net income drop.
“Results were consistent with our expectations,” said Jay Schottenstein, interim CEO. “The quarter reflected weak sales and increased markdowns. We are committed to improved profitability and are working hard to implement our plan to strengthen our brands, channels and operations. Specific actions underway include continuing to build strong omnichannel capabilities, rationalizing our store fleet, reducing expenses, growing international licensed stores, and most importantly, delivering great merchandise and customer experience across our brands. Our focus is on leveraging our strong brands and talented team in order to deliver long-term profitable growth and enhanced value for our shareholders.”
The new Gucci Cosmetics line will be produced and distributed in licensing by P&G Prestige. The new line will be endorsed by Monaco Royalty Charlotte Casiraghi. The Gucci cosmetics line will include products for skincare, nails and eyes. The new Gucci products will be available at select speciality stores around the world.
Michael Kors has appointed Cathy Marie Robinson as its new senior vice president of global operations.
Robinson joined the fashion label from Toys R Us where she was chief of logistics. Before this she worked at Babies R Us, Smart & Final and Wal-Mart.
John D. Idol, chairman and chief executive officer at Michael Kors, commented: “We are pleased that Marie will be joining our executive team. Her significant experience managing global supply chain operations for large retail distribution networks, both bricks and mortar and online, will be instrumental to us as we develop a world-class distribution network to meet the growing demand for our brand.”
New Delhi: Marks & Spencer is planning to open 60 more stores in India by 2016 in order to claim a “leadership position” in the domestic retail market. The retailer “plans to open a total of 100 stores by 2016,” M&S said in a statement on Tuesday.
At present, M&S operates 40 stores in India through 51:49 joint venture with Reliance Retail. A total of 100 stores also include 20 lingerie and beauty stores.
Commenting on the announcement, Marks & Spencer Reliance India MD Venu Nair said: “Together with our partner Reliance Retail, we are continuing to invest into accelerating our growth in India as we build a leadership position in the market. The strong performance of our products presents us with an exciting growth opportunity,” he added.
Global 2000: The Biggest Retailers Of 2014
No. 1: Wal-Mart Stores – Forbes.com
Wal-Mart Stores, Inc. operates retail stores in various formats around the world. It operates through three segments: Walmart U.S., Walmart International and Sam’s Club. The Walmart U.S. segment includes the company’s mass merchant concept in the U.S., operating under the Walmart or Wal-Mart brand, as well as walmart.com. and also offers financial services and related products, including money orders, prepaid cards, wire transfers, check cashing and bill payment. The Walmart International segment includes numerous formats of retail stores, restaurants, wholesale clubs, including Sam’s Clubs, and various retail websites that operate outside the U.S. This segment operates units in three major categories: retail, wholesale and other which consists of numerous formats, including discount stores, supermarkets, supercenters, hypermarkets, retail websites, warehouse clubs, restaurants and apparel stores. The Sam’s Club segment includes the warehouse membership clubs in the U.S., as well as samsclub.com. and also offers brand name merchandise, which include hard goods, some soft goods and selected private-label items and brands in five merchandise categories namely grocery and consumables, fuel and other categories, technology, office and entertainment, home and apparel and health and wellness. The company was founded by Samuel Moore Walton and James Lawrence Walton on July 2, 1962 and is headquartered in Bentonville, AR.
Clothing yet again proved to be the thorn in Marks & Spencer’s side as profits for the third year in a row fell despite continued progress in its food department.
The department store on Tuesday announced a 4 per cent drop in underlying pre-tax profits to £623 million for the year to the end of March. This was driven by a 1.4 per cent fall in like-for-like general merchandise sales, where M&S has continually struggled in recent years with its clothing sales. Like-for-like food sales were up by 1.7 per cent, resulting in a 0.2 per cent increase in UK like-for-like sales overall.
Speaking on Tuesday, chief executive Marc Bolland said the results showed “early signs of improvement” in its general merchandise division, and confirmed that capital expenditure will fall to between £500 million and £550 million, with profit margins also on track to improve.
Bolland said: “We are focused on improving our performance in general merchandise and were pleased to see early signs of improvement. Our food business had a very strong year, consistently outperforming the market.”
The results mark the end of Bolland’s three year plan to turn M&S into an international multichannel retailer, despite lagging sales in its clothing division. It’s now thought Bolland, along with the rest of the management team, will miss out on their bonuses this year due to the retailer’s lacklustre annual figures.
Prada has recently opened its first store in Austria, in the capital of Vienna. Situated in the heart of the city in the First District, at the corner of Bognergasse and Seitzergasse, the new Prada store in Vienna is housed within the historical palace which also comprises the Park Hyat Hotel Vienna. The store covers 1,400 sqm on two floors and features the entire product range of the house, for both men and women.
Dubai: The luxury label Bulgari has entered a joint venture with Al Tayer Insignia for the UAE marketplace. This upgrades an existing alliance of more than 20 years to the next level.
Bulgari currently counts five points-of-sales in the UAE, with two stores located in Abu Dhabi and three spread across key locations in Dubai. Luis Gasset, currently managing director for Bulgari Middle East, will take up the role of general manager of the newly created joint venture.
Al Tayer Insignia, which represents more than 30 of the world’s leading luxury brands, also has operations in Bahrain, Saudi Arabia, Kuwait and Qatar. “Together with ventures already set up, this agreement will guarantee effective control of distribution across most of the Middle East region, thus confirming our commitment in pursuing brand enhancement and sales growth,” said Jean-Christophe Babin, CEO of Bulgari Group.
“As our first mono-brand luxury venture in the UAE in 1992, Bulgari has been a key partner in our growth over the past two decades,” said Khalid Al Tayer, CEO – retail, Al Tayer Group. “The brand has seen phenomenal success in the market and we are delighted with this strategic development that will further strengthen our partnership.”
Walmart’s new convenience store test concept, Walmart To Go, is located in its hometown of Bentonville, Arkansas.
The approximate 2,500-sq.-ft. store is a hybrid. Part grocery store, part c-store and part quick-serve restaurant, it offers a mix of groceries, c-store staples, and refrigerated and fresh prepared foods, complete with a deli counter. Products are priced the same as they would be in a regular Walmart store.
Walmart To Go also sells gasoline, with a covered awning accented with the retailer’s iconic sunburst over the fuel stations. A large awning also covers the area from the pump area to the store. There is also a picnic area with tables outside for customers who want to eat onsite.
Asda is axing thousands of middle managers in its stores as part of a big restructuring in which more staff will be employed in e-commerce and grocery home shopping services.
The grocer said a consultation with 4,100 senior store staff had begun. It is thought as many as 2,600 will leave rather than accept an alternative, lower-paid job.
“We haven’t updated our structure for five to six years,” said Asda’s chief operating officer, Mark Ibbotson. “We believe we are about 18 months ahead of our competitors. They’re all going to have to do this.”
Ibbotson, who is tasked with finding £1bn of cost savings over the next five years, said the exercise would involve a sharp reduction in the number of department managers and the creation of more junior roles on the shopfloor in areas such as click and collect.
The shakeup was revealed as the Wal-Mart-owned grocer reported that like-for-like sales were up 0.1% in the 15 weeks to 20 April. Recent market share data shows that Asda is the best-performing of Britain’s big four grocers.
Last week, Morrisons, which issued a profit warning in March, posted a 7.1% slump in first quarter like-for-like sales.
Asked if a damaging price war had broken out in the grocery industry, the chief executive, Andy Clarke, said: “Not from my perspective … what others want to call their decisions is up to them. We have a strategy, not a slogan.”
The grocer said reductions it had made this year had widened the price gap with Tesco, Sainsbury’s and Morrisons and narrowed the gap with discounters.
Neiman Marcus announced today that Adam Brotman, Phillipe Bourguignon, and Vivek “Vic” Gundotra have been named to the Board of Directors.
Mr. Brotman is Chief Digital Officer for Starbucks Coffee Company. In this role, he has responsibility for Starbucks core digital businesses, including mobile and mobile payments, web, card, loyalty, e-commerce, wi-fi, and the Starbucks Digital Network. Prior to joining Starbucks in 2009, Mr. Brotman held key leadership positions at leading digital media companies including Corbis and PlayNetwork, Inc.
Mr. Bourguignon is currently the Vice Chairman of Revolution Places LLC and CEO of Exclusive Resorts, the preeminent destination club specializing in bespoke villa and experiential vacations. Prior to joining Revolution Places, Phillipe was co-CEO of the Davos-based World Economic Forum in 2003, 2004 and Chairman and CEO of Euro Disney. In addition, Mr. Bourguignon acted as chairman and CEO of Club Med and president of Accor for the Asia/Pacific region, one of the largest hotel groups in the world. Mr. Bourguignon is an active member on the Vinfolio board. He previously served on the board of directors for Zipcar and spent 11 years on the board at eBay.
Mr. Gundotra most recently served as Senior Vice President, Social for Google. In this role, he had responsibility for Google+, Google’s social networking and identity service. Prior to joining Google in 2007, he was the General Manager of Platform Evangelism at Microsoft.
The new appointees will be joining Nora Aufreiter and Norman Axelrod on the Board. Ms. Aufreiter was most recently a Director at McKinsey & Company where she previously led their omni channel, branding and retail practices. Mr. Axelrod is an Operating Advisor to Ares’ Private Equity Group and serves or has served on many of the Boards for Ares’ investments in the consumer and retail sector.
“We are pleased to welcome Adam, Phillipe, and Vic to our Board,” said Karen Katz, President and Chief Executive Officer of Neiman Marcus Group. “We are looking forward to working with them as we continue our mission to be the world’s largest multi-branded omni-channel luxury retailer in the world known for unparalleled customer service.”
Premium leatherwear maker Coach will open 30 new stores in China by the end of June 2014, adding to the brand’s existing 147 stores in mainland China, Hong Kong and Macau.
Disappointing Q3 sales at the brand’s North American stores contrasted with a 25% sales increase in China. Sales dropped 21 percent for the quarter ending March 29 at North American stores open at least one year, from which Coach derives 70 percent of its revenue.
With recent management changes that included the hiring of a new CEO, Victor Luis, and a new creative director, Stuart Vevers, Coach continues its transformation intoa lifestyle brand and expand its product line to include shoes and clothing.
Operating losses at the Irish arm of UK retailer Arcadia, which sells the Dorothy Perkins and Burton brands, last year totalled £1.54 million (€1.89 million).
Accounts filed with Arcadia Group Multiples (Ireland) Ltd to the Companies Office show the firm recorded the loss after revenues decreased from £46.6 million to £19.74 million in the 12 months to the end of August 31st, 2013.
The operating loss of £1.54 million followed an operating profit of £311,000 in 2012.
The firm’s revenues dropped after the company completed the sale of its Top Shop and Top Man brands to connected firm Top Shop/Top Man (Ireland) Ltd for £8 million.
A large factor in the £1.54 million operating loss was an exceptional charge of £2.4 million. The firm recorded a pretax profit of £6.2 million through the profit of £8.2 million on the internal sale of the top Shop and Top Man brands.
The pretax profit includes interest payable of £512,000.
Top Shop/Top Man (Ireland) Ltd has yet to file accounts for last year.
Christopher Bailey, the fashion designer and new chief executive of Burberry, has been handed a golden hello in shares worth up to £7.6m and an annual pay package worth up to £8.1m a year, including a £440,000 cash allowance to cover clothing and other items.
Bailey, who keeps his role as creative head of the luxury fashion house, took over this month from US chief executive Angela Ahrendts, who controversially received a £387,000 annual cash perk to cover the cost of her car, driver, Burberry clothing and other costs described as an “overseas allowance”.
The latter was first awarded to Ahrendts in 2006 after she moved from America and was initially designed to cover “accommodation, travel and school fees etc for a period of no longer than five years”.
The contract for UK-born Bailey, however, entitles him to receive an allowance worth £53,000 more than the perk awarded to Ahrendts, who recently went to work for Apple as its head of retail.
The company declined to say what expenditure Bailey’s allowance is expected to cover. Bailey, like all senior managers, receives an 80% discount on the retail price of Burberry products.
His contract of employment, seen by the Guardian, simply states: “The executive shall have a taxable, non-pensionable allowance of £440,000 per annum, payable in equal monthly instalments.”
The allowance does not include medical or life insurance, which are all provided for separately by Burberry, as is the cost of first-class air travel for work and other expenses.
The highlights of Bailey’s employment contract were recently sent to major shareholders after the paperwork was signed just one day before Bailey started in his new role on 1 May. Some investors are known to dislike large awards of shares for internal promotions, and Burberry could face tough questioning over the its decision. Large golden hello payments are typically reserved for top executives arriving from other businesses, where their departure caused them to lose out on a performance payout.
The one-off award of 500,000 shares is understood to be subject to performance criteria and will be released between 2017 and 2019. It is described in Bailey’s contract as an award “in consideration for the executive’s appointment to the roll of chief executive”. However, the small print also makes clear that Bailey does not lose the performance-linked share awards he had already accrued in his previous role as chief creative officer. He has been at the company since 2001.
Only limited details of Bailey’s employment terms will be disclosed when Burberry publishes its annual report next month because he was promoted to chief executive after the company’s year-end.
His contract, however, sets out in detail how he will receive a salary of £1.1m, a £440,000 allowance, and an annual cash bonus of up to £2.2m as well as £330,000 in pension contributions. In addition, the Guardian understands he will also receive share awards of up to £4.4m separate to the golden hello.
Bailey has indicated that he will donate 10% of his salary after tax to The Burberry Foundation, a charity that supports projects targeted at disadvantaged young people.
In addition to setting out his pay, Bailey’s contract makes clear that Burberry has agreed that “it will cooperate with the executive to … take reasonable measures to protect the name ‘Christopher Bailey’ as a trademark and within internet domain names to its expense”.
Meanwhile, Bailey has pledged to allow Burberry to use his name and image rights for publicity and marketing. “The executive shall make himself available to attend and participate in public events,” the contact stipulates.
Sears Considers Selling Rest of Its Canadian Business
Sears Holdings Corp. (SHLD), the department-store chain struggling to rebound from three years of operating losses, is considering a sale of its Canadian stores.
The company may divest its 51 percent stake in Sears Canada, possibly as part of a sale of the whole business, according to a statement today. Sears, run by hedge-fund manager Eddie Lampert, will hire an investment bank to study options for the division, which has a market value of about $1.5 billion.
The move would mark the latest effort to shrink a company that was once the largest retailer in the U.S. Lampert, Sears’s chairman, chief executive officer and largest shareholder, spun off the Lands’ End clothing business last month. He’s also sold real estate, closed stores and tried to refocus the 128-year-old company on e-commerce.
“This is the playbook that they’ve been running,” said Matt McGinley, managing director at International Strategy & Investment Group in New York. “They need to sell stuff to fund the operating losses.”
Sears’s stock fell 5.9 percent to $40.70 at the close in New York. Shares of the Hoffman Estates, Illinois-based company have fallen 12 percent in the past 12 months. Sears Canada stock climbed 3.4 percent to C$16.30 today in Toronto.
Photographer: Patrick Fallon/Bloomberg
A customer makes a purchase at the Sears store inside the Del Amo shopping mall in Torrance.
In February, Lampert said he was taking steps that could generate more than $1 billion in cash this year. That included a possible sale of the auto-center business and “increasing and realizing the value of our investment at Sears Canada.”
The Canadian chain got its start more than 60 years ago when Sears teamed up with local merchandising company Simpsons Ltd. The operation has struggled in recent years, hurt by the entrance of U.S. competitors such as Target Corp. Sears partially spun off the Canadian operations in 2012, reducing its stake to 51 percent from 95 percent. Lampert and his hedge fund, ESL Investments Inc., own an additional 27 percent in Sears Canada, according to data compiled by Bloomberg.
Sears Canada, based in Toronto, said last year it would cut almost 800 jobs and sell store leases to raise cash. The Canadian chain has 118 full-line department stores, most of which are held under leases. The company also owns 14 of these department stores, as well as two Sears Home locations. As of March 1, the square footage for its full-line department stores had decreased to 14.5 million from 16.5 million in early 2012.
The woes could make it difficult for Sears Canada to fetch a high price in a sale, McGinley said.
“This is not the asset that it was even two years ago,” he said.
If Sears received market value for its 51 percent stake — about $800 million — that still wouldn’t be enough to offset its operating losses, McGinley said. It’s also difficult to imagine a strategic buyer who would step forward, he said. That may prompt Sears to just spin off the rest of the business.
“I can’t think of a strategic that would really want this,” McGinley said. “They stripped out some of the best assets.”
Keith Howlett, an analyst at Desjardins Securities Inc. in Canada, said major landlords, pension funds or private-equity firms may have an interest. The sale also may give Macy’s Inc. or Kohl’s Corp. an opportunity to expand in the country, he said in a report.
In October, Sears announced the sale of five Canadian leases to CadillacFairview Corp. for C$400 million ($376 million).
Sears has been offloading other assets, including Lands’ End. That spinoff, completed in April, generated a $500 million dividend for Sears. Stockholders received 0.3 of a share in the new entity for each Sears share they held.
Some investors have eyed the company’s reinsurance unit as another possible spinoff. That would give shareholders ownership of $1.25 billion of mortgage-backed securities and $1.8 billion of securities backed by its KCD IP unit’s rights to the Kenmore, Craftsman and DieHard trademarks, Mary Ross Gilbert, an analyst at Imperial Capital LLC, said in March.
Kmart merged with Sears Roebuck in 2005 in a $12.3 billion takeover — a deal that Lampert said would create a company with enough scale to compete with Wal-Mart Stores Inc. Instead, the retailer has suffered from declining shopping-mall traffic and the rise of online competitors such as Amazon.com Inc.
Sears is now struggling to reverse 12 quarters of operating losses and 28 straight quarters of declining sales. To attract more customers, Lampert has bolstered Sears’s e-commerce features and touted the Shop Your Way rewards program.
Popular American womenswear retailer Chico’s just announced its first three Canadian store locations. All three stores will open in August, with more Canadian location announcements to follow. Its first Canadian store locations will be in the suburban Toronto area.
Chico’s first three Canadian stores will be located in the following malls:
Square One Shopping Centre, Mississauga
Mapleview Shopping Centre, Burlington, and
Upper Canada Mall, Newmarket
Its Mississauga store will be 3,360 square feet, located across from Hudson’s Bay on the mall’s second level. Its Mapleview location will be roughly 3,100 square feet and will be on the mall’s lower level, between Maison Birks and White House | Black Market. Its Upper Canada Mall store will open on the mall’s second level. Both Square One and Upper Canada are managed by Oxford Properties, while Mapleview is managed by Ivanhoé Cambridge.
Chico’s Canadian stores will see updated interiors based on the company’s new prototype, featuring warm tones, subtle animal prints, iconic woven entry doors, luggage details on fixtures and layers of artifacts as props.
Chico’s was founded in 1983 in Florida. It sells private-branded clothing and accessories for women, “featuring a combination of great style with on-trend, expressive and one-of-a-kind designs to yield a wardrobe that is fashionable, unique, relaxed, figure-flattering, and comfortable,” according to a description on its parent company’s website.
Chico’s currently operates more than 600 stores and over 100 outlets across the U.S., the District of Columbia and Puerto Rico.
Chico’s is a division of Chico’s FAS, which has already opened White House | Black Market stores in Canada, including three in the Toronto area. Both Chico’s and White House | Black Market are expected to further expand into Canada. Besides White House | Black Market and its Chico’s women’s stores, Chico’s FAS operates Soma Intimates and Boston Proper.
The retail and hospitality conglomerate launched its ecommerce site two years ago
Dubai: Landmark Group, a UAE-based retail and hospitality conglomerate, could adapt “click and collect”, a service which allows consumers to order goods online and collect them in stores, according to the company’s top executive.
“We already have a mechanism here to return to stores but we would then have ‘click and collect’ and ‘reserve and collect’,” Renuka Jagtiani, vice chairperson of Landmark Group, told Gulf News on the sidelines of a session at the Retail Show Middle East 2014 in Dubai on Tuesday. She did not comment on when the two services could be introduced.
The service is popular in the UK. According to data by OC & C Strategy Consultants, the volume of UK non-food sales generated via the internet for collection in store is expected to increase by 33 million parcels this year compared to the previous year, the Financial Times reported. By 2015, the growth in the volume of units ordered online and collected in store is expected to surpass that for home delivery, increasing by 53 million parcels year on year.
Landmark‘s ecommerce site, which was launched in 2012, includes three of its brands — Splash, Emax and Babyshop, and delivers goods only to the UAE. However, the site is expected to host all of Landmark’s brands and expands the markets it delivers to in two years’ time, according to Jagtiani.
Founded in 1973, Landmark is present in 20 countries across the region.
New York — The United Kingdom’s Selfridges was named ‘Best Department Store in the World’ for the third consecutive time by the Intercontinental Group of Department Stores (IGDS).
The award was given at the group’s Global Department Store Summit, which was held last week. The event is held every other year.
Selfridges was in competition for the award with Macy’s and the German retailer, Breuninger.
“We are thrilled that Selfridges has again been recognized as the best department store in the world,” said Anne Pitcher, managing director of Selfridges & Co. “We have had a terrific couple of years since last winning, and it is a tribute to the commitment of our teams that we have been honored with the award again this year. It gives us even greater impetus to continue to exceed our customers’ expectations and deliver to them a unique and extraordinary shopping experience.”
IGDS is the largest association of department stores world.From ChainStoreAge.com
Online auction and ecommerce giant eBay this week announced it is repatriating almost USD 9 billion (GBP 5.3 billion) of its cash held overseas back to the US, as it looks to access funds for potential acquisitions.
The statement comes as eBay revealed its first quarter earnings for 2014, with revenues up 14 per cent year-on-year to USD 4.3 billion. However, the tax charge over repatriation of its overseas cash drove the business into a net loss of USD 2.3 billion. eBay added that it is now expecting a weaker-than-forecast result for the current quarter, with profit between 67 cents and 69 cents a share for the second threemonths of the year, compared to analysts’ expectations of 70 cents a share.
The repatriation of cash will cost eBay USD 3 billion in taxes, but will help it access funds the company can use for potential acquisitions in the states.
“If you look at our last 15 acquisitions, my guess is ten have been inside the US, maybe 11,” John Donahoe said.
“Just looking at that versus where our cash is located, you just say, alright it would make more sense to have more cash in the US for mergers and acquisitions.”
Montreal-based luxury outerwear brand Mackage will open stores in selected Canadian cities. The company has retained a real estate company to establish its brand across Canada. Despite being Canadian, its first and only free-standing store is in New York City.
Designers Eran Elfassy and Elisa Dahan Mackage founded Mackage in 1999. The brand focuses on creating detailed, tailored outerwear in leather, down and wool. It retails collections for men and women, as well as its recently-launched handbag and accessory lines. The company is part of fashion conglomerate APP Group, which also includes upscale clothing brand SOIA & KYO.
Mackage is working with real estate company Oberfeld Snowcap in its search for cross-Canada space. We don’t know what Canadian cities are targeted, though we expect Toronto, Montreal and Vancouver to be the brand’s top choices.
In late 2010, the company’s first North American bricks-and-mortar store opened in New York City’s SoHo. In Canada, Mackage sells its products in a number of retailers including Holt Renfrew, Harry Rosen, Aritzia, La Maison Simons and Mendocino, among others. It is also available in the United States at upscale retailers including Bloomingdale’s, Saks Fifth Avenue and Neiman Marcus.
Dubai-based developer Nakheel has signed a management agreement with UK-based Premier Inn for its new, 372-room hotel at Ibn Battuta Mall, the company announced on Sunday.
The hotel is part of Nakheel’s 28,000 sqm expansion of the Ibn Battuta complex and is scheduled to open in 2016.
It will have a restaurant, bar, Costa coffee shop, rooftop swimming pool and gym and will be directly linked by a pedestrian bridge to the Dubai Metro station and to the mall.
Ibn Battuta Mall, spread across 521,000 sqm, currently has 270 shops, 50 restaurants and a 21-screen cinema. The expansion will add another 150 shops to the existing complex.
Dubai developer Nakheel, one of the worst hit during Dubai’s property crash in 2009, has recovered strongly in the last year. As part of its current strategy, it is concentrating on developing cash-generating assets, with a focus on retail and hospitality.
The company recently revealed that it is planning nine hotels across Dubai over the next five years.
Last month, the developer confirmed that Accor will manage its 250-room Dragon Mart Hotel, currently under construction and due to open this year. The hotel is part of Nakheel’s Dhs1 billion, 177,000 square metre Dragon Mart expansion project, which also includes a second mall and a multi-storey car park.
In February, Nakheel launched over 500 luxury serviced apartments at The Palm Tower, its 50-storey, five star hotel and residential complex on Palm Jumeirah.
Nakheel is also planning hotels at Deira Islands and International City.
UAE fast food chain Just Falafel has signed a deal to open 57 stores in three European countries, the company announced on Sunday.
The new outlets will be in the Benelux region of The Netherlands, Belgium and Luxemburg and will be operated by Wadi Degla Holding, an Egyptian conglomerate that already has 27 Just Falafel stores in Egypt.
Just Falafel, which says its vision is to “elevate the status of the falafel from the Middle East to a global phenomenon”, has spread rapidly in the Middle East since its launch in 2007.
It has also expanded to the US, UK, Canada and Australia.
The new stores will be the first on mainland Europe and will gradually be opened from the end of this year.
“Europe is an important region for Just Falafel, as it represents an area of significant demand for Middle Eastern food, “CEO Fadi Malas said.
“The interest in our franchise offering has been overwhelming as we have a unique concept that is very compelling to prospective franchisees.”
Wadi Delga already has a presence in the Benelux region, as an owner of the Belgium football team Lierse SK.
French house of Longchamp opened last week in Barcelona its largest store in Spain. Situated on Paseo de Gràcia, Barcelona’s leading luxury shopping destination, the new Longchamp store covers 700 sqm on two floors and features the full range of products of the house, including handbags, accessories and shoes.
Robert Travers, Cushman & Wakefield’s head of retail agency in Spain, said:“Barcelona is becoming a top priority in the expansion plans of luxury brands. It is a top tier city and ranks among the 10 most visited places in the world – brands are therefore targeting Barcelona to showcase full collections in flagship concept stores. Additionally, Barcelona’s rents are still attractive compared to many other European cities.”
New York — Ralph Lauren Corp. on Friday announced that Roger Farah, executive chairman, will retire at the end of May. He will remain on the company’s board until his term expires in August. Farah, one of the retail industry’s most respected executives, is credited with turning Ralph Lauren into a global powerhouse. He has been mentioned as one of the potential candidates to take the reins of Target Corp. in the wake of Gregg Steinhafel’s departure.
“Roger is a spectacular leader, trusted advisor and a good friend,” said Ralph Lauren, chairman and CEO. “I am tremendously grateful for his important contributions to the growth of this company. During his tenure, Roger helped us assume direct control of our most strategically important regions and merchandise categories, evolving our company into a highly profitable, global business.”
Following Farah’s retirement, a number of top executives will make up the office of the chairman, including CEO Lauren and COO Jacki Nemerov.
Farah’s retirement was announced with the company’s report of fourth-quarter earnings results. For the three months ended March 29, net income rose 20.5% to $153 million from $127 million a year ago. Net revenues for the quarter rose 13.6% to $1.87 billion, from $1.64 billion.
Cork-based wholesale grocery group Musgrave recorded a loss of €94.9 million in 2013 largely due to poor trading in Britain.
The company was dragged into the red by €141.2 million in exceptional items. This comprised a write down of €131 million on the value of underperforming assets in Britain and costs of €12.2 million associated with its decision last year to axe the Superquinn brand and integrate its 24 stores into the SuperValu network.
Musgrave’s group turnover declined by 1.9 per cent to €4.8 billion last year while its operating profit fell to €68 million from €82.4 million in 2012.
Its interest costs reduced to €9.6 million from €12.4 million in 2012 as its net debt declined by €19.3 million to €120.9 million.
Sales in Britain fell by 3 per cent to €1.5 billion but the company declined to quantify the extent of trading losses. “The losses are sizeable …but manageable,” Musgrave chief executive Chris Martin told The Irish Times today.
Musgrave responded to its difficulties by clearing out the management team, which was led by Donal Horgan, and installing former Tesco executive Peter Ridler as managing director to lead a turnaround.
“In taking that write down, its’s enabling us to clear the decks in the UK to enable us to go forward,” Mr Martin said, adding that Musgrave remains “committed to its Budgens and Londis brands there.
Commenting on its problems in Britain, Mr Martin said: “Straight up, there are market issues and there are management issues. We pursued a growth strategy, which was relaxing our rules and disciplines, particularly around what sort of retailers we take on and also the standards that they have to put in place. We now have a turnaround situation.
“We’ve got to get to a core of good retailers who want to work with us and who we want to work with and then we’ve got the basis of a big business.”
While Musgrave owns the Budgens and Londis brands in Britain, the shops are run by independent retailers on a franchise basis. Musgrave then wholesales product to those shops.
“We have minimum purchasing loyalty requirements,” Mr Martin explained. “Some of those rules were relaxed [in Britain] on the basis that we’d get those accounts in and they would begin to comply with the way that we work but they didn’t.”
On when Musgrave might return to the black in Britain, Mr Martin said: “It’s going to take time. We are expecting reduced losses this year and it’s probably going to take two to three years to get it into the right shape for what we want.”
The handbag brand Radley is planning to take its famous Scottish Terrier logo across Asia after getting sales and profits back on track in the UK.
The company, owned by private equity houses Exponent and Phoenix, is in discussions with “multiple partners” about opening franchise stores across the Middle East and Asia, including China.
Radley was founded by Lowell Harder in 1998 when she started selling her colourful handbags from a stall in Camden Market.
The brand grew rapidly but slumped into the red after the collapse of Lehman Brothers as British shoppers reined in spending and Radley’s colourful handbags fell out of fashion. Exponent and Phoenix, who bought Radley in 2007, also pulled the brand out of the US as they scrambled to preserve cash.
However, in the year to the end of April, like-for-likes sales rose by 9pc and total sales by 7pc to £64m. Earnings before interest, tax, depreciation and amortisation doubled to £4m.
Radley has modernised its handbag designs – with Harder back as creative consultant – and launched new non-leather products with print designs including its famous dog. Radley is the bestselling handbag brand in John Lewis and House of Fraser.
Xavier Simonet, who was parachuted into Radley as chief executive last May, said that “now is the time” to open stores overseas.
Simonet said: “A big part of the strategy is international growth. The next step, as well as UK growth, is to expand internationally.”
It is understood that Radley’s owners are backing the plans by acquiring the company’s bank debt.
Exponent and Phoenix have bought roughly £20m of debt from NAB and BNP Paribas at a “material discount”, according to sources.
The purchase will potentially allow Radley to reduce its interest payments and focus its investment on growing outside the UK.
There have been rumours that the private equity houses are preparing Radley for a sale or a float amid a wave of activity in the retail sector.
However, Simonet, a Frenchman with an Australian citizenship who previously worked for LVMH across Europe and Asia, denied there were plans for a sale.
“I can confirm there is nothing happening at all,” Simonet said. “We are entering a new growth phase.”
Despite Radley struggling in the US, Simonet added: “There is a strong reason that Radley is going to go global – it distinctiveness.”
The company describes its products – which also include accessories such as purses and iPad cases – as “affordable luxury”. Its handbags are priced at between £80 and £350, below luxury rivals such as Mulberry.
According to Simonet, there is growing demand from the Chinese middle classes for upmarket fashion priced below the traditional luxury brands.
He said: “What is new is the importance of affordable luxury. It is a balance between beauty and functionality”.
Radley already has a store in Kuala Lumpur and sells its product in ten countries through department stores. However, it is planning to grow overseas by opening in Taipei, the capital of Taiwan, this month.
The company is looking to open 10 stores outside the UK by 2015, with talks over shops in Australia and the Middle East.
In addition, the company plans to open up to five more stores in the UK over the next three years alongside its concessions in John Lewis and House of Fraser.
Simonet is also looking to place the brand’s products into Harrods and Selfridges.
With this in mind, Harder has overseen the launch of a new range called No1 Radley. The new products are priced slightly above Radley’s existing handbags.
“We are not leaving our core strengths,” said Simonet. “We are not just trying to protect the UK [sales], we need to grow in the UK.”
Radley employs 500 people and has a team of six designers based in Camden, which has become a creative hub for British fashion businesses.
According to Simonet, Radley’s founder – who created the terrier logo because of her love of dogs – remains at the heart of the business.
“She is the brand,” Simonet said of Harder, who works two days a week. “She has the right and legitimacy [as a designer].
“In the UK we were one of the first to say ‘This is a bit boring, lets try some more colours.”
By Scott Campbell5:00PM BST 09 May 2014
Sales of the company’s Superdry brand dropped 1.3pc during quarter four
Shares in British fashion retailer SuperGroup tumbled by as much as 20pc on Thursday after the company warned that its full-year profits would be “towards the lower end” of analysts’ estimates.
Sales of the company’s Superdry brand – which first came to prominence after David Beckam wore one of its t-shirts in a photoshoot in 2005 – dropped 1.3pc during quarter four, ending 26 April, on a like-for-like basis compared to the same period last year.
“It is a tricky number but you have to look at the full-year. There is nothing to worry about,” said Mr Dunkerton, who founded the business in Cheltenham in 1985.
“We can explain what happened here. If you look at nine quarters of like-for-like growth it has been a consistent journey.
“Taking a quarter out of context would be crazy really. We are building for the long-term and we have delivered what we said we would.”
The company said that one reason profits were dragged down was because it discontinued its partnership with Ebay, where it sold items at a discounted price, during the year.
Mr Dunkerton added that soaring temperatures over spring meant that customers bought fewer high value items – such as jumpers and gilets – instead purchasing shorts and t-shirts,
Kate Calvert, analyst at Investec, said: “During quarter four, retail space contribution was better than we expected but this was offset by a weak underlying like-for-like sales performance.
“After a year of infrastructure investment, we expect European roll-out to be 2015’s story as the brand gathers momentum internationally.”
Started in 2004, SuperGroup operates 516 stores across the world, with 96 shops and 64 concessions in the UK, including a flagship store on London’s Regent Street.
The company is planning to “further internationalise” its offering with a rollout of stores in mainland Europe.
SuperGroup floated on the London Stock Exchange in 2010 at £5 per share and surged to almost £18 within a year. However, its shares then slumped after three profit warnings, caused by troubles with a warehouse IT system, accounting errors and stock availability issues.
Shares in SuperGroup fell by 12.54pc to close at £11.79.
Al Meera Bookstore Company, a subsidiary of Al Meera Consumer Goods Company, has announced the launch of three WHSmith stores in Doha.
Al Meera Bookstore Company, the exclusive franchise owner of the WHSmith brand in Qatar, said the shops have opened in Hayat Plaza at Al Aziziya, Ezdan Mall at Gharrafah District, and Nuaija Mall at Al Hilal.
The company added in a statement that it plans to open more stores in the coming years to “meet the demands of customers”.
The British-based WHSmith Travel is one of the oldest global brands, with over 550 bookstores falling under their portfolio, offering everything from books, stationary, magazines, and newspapers, to entertainment.
In 2012, WHSmith, which is listed on the London Stock Exchange, announced expansion plans in the Gulf region as it looks to offset weakness on Britain’s high streets.
The newspapers, books and stationery retailer, which operates over 1,100 stores primarily in Britain, said it was targeting growth in Dubai, Qatar and Saudi Arabia.
Dr Mohamed bin Nasser Al Qahtani, Al Meera deputy CEO, said: “Through WHSmith stores, our customers will have access to selected sources of information, helping them boost their education level, sense of creativity and enhance their active contribution to building the society. These stores will also offer all stationary requirements to all ages and students classes.”
American jeweller Tiffany & Co opened this week its new flagship store in Paris. Located at 62, Avenues des Champs Elysées, the new Tiffany store in Paris covers 976 sqm (10,000 sq ft) and is spread over 3 floors. The store features three VIP rooms and one library, one of the VIP rooms will host
The opening on the Champs Elysées marks a new milestone in Tiffany’s connection to Paris which began in 1850 when the company established its first store. At the Paris World’s Fair in 1867, Tiffany & Co. became the first American firm to win an award for the excellence of its silverware. In 1999, Tiffany returned to Paris with a store on rue de la Paix. Charles Lewis Tiffany founded the company with a vision to offer the world the finest diamond jewelry, and this year, Tiffany is celebrating 175 years of design excellence.
Aramex plans to roll out a network of parcel lockers across the Middle East and North Africa to support the growth of e-commerce.
The logistics giant yesterday said that it had formed a joint venture with Poland’s InPost, which has a parcel locker network across 17 countries worldwide, to establish a parcel network in the Mena region.
The locker network will operate in a similar way to international services such as Amazon Locker and those offered by national postal services in Australia, the US and elsewhere.
The first lockers are scheduled to become active by the end of this year. Aramex did not comment on which countries the service will be rolled out in first, nor on which locations would be used.
The agreement between Aramex and InPost comes on the back of growth in e-commerce services across the Mena region. Online spending in the region is forecast to grow to US$15 billion in 2015 from $9bn in 2012, according to a survey from PayPal and Ipsos last September.
“InPost have a long and highly successful track record in developing world-class products and services in Europe and Asia and we are delighted to now be partnering with them across the Middle East and Africa,” said Iyad Kamal, Aramex’s chief operating officer.
“Across our markets in the Middle East and Africa, we are seeing the rapid growth of the e-commerce industry and our new partnership with InPost will enable us to continue to capitalise on this trend by strengthening our e-commerce services,” Mr Kamal added.
E-commerce in the Middle East is dominated by the UAE, where online consumer spending reached $2.9bn in 2012, according to the PayPal-Ipsos study. This figure is forecast to grow to more than $5.1bn in 2015, according to estimates from Ekos Global.
“Aramex has deep local knowledge of the Middle East and Africa in particular and is a very natural partner for our growth strategy,” said Rafal Brzoska, InPost’s chief executive.
“Having already established an extensive global network, we are excited about the considerable opportunities across the e-commerce sector in the Middle East and Africa and proud to be introducing parcel lockers for the first time to the region.”
Prada opened this week in Geneva its largest store in Switzerland. Situated on Rue du Rhone, the new Prada store covers 1,000 sqm and is spread on two floors. The two entrances on Rue du Rhone invite customers into two very different spaces, one for the women’s collection and the other for the men’s. The store features both men’s and women’s ready-to-wear, leather goods, accessories and footwear collections.
Prada is scheduled to open two new stores in Switzerland within the next two months, a 200 sqm store in Crans Montana and an 860 sqm in Lugano.
Work to begin on Springs monster Shopping Mall
Artist’s impression of R850m Springs Mall, a 52 000sqm shopping mall to serve the greater Springs area in Ekurhuleni east of Gauteng.
Development will soon begin at Springs Eco Park on a R850 million Springs Mall, claimed to be the regional shopping centre serving the greater Springs area in Ekurhuleni east of Gauteng.
Springs Mall is positioned in the suburb of Casseldale. It enjoys an enviable location at the intersection of the N17 highway and R51/Wit Road.
The 52,000sqm mall benefits from accessibility off Jan Smuts Road, outstanding frontage on the N17 highway and prominent visibility. In fact, the two-level mall will be visible up to 5km away for people travelling on the N17 highway.
Developed and owned in joint venture by Flanagan & Gerard Developments, Blue Crane EcoMall (Pty) Ltd and the family of Giuricich Brothers, Springs Mall is the brainchild of Springs businessman Franco D’Arrigo.
The D’Arrigo family has lived in Springs for three generations and is passionately invested in the future of this city. It first announced its plans to develop Springs Mall in 2008. Since then, this Springs family has been unrelenting in its resolve make its vision for the mall a reality.
Now, after years of anticipation, the construction of Springs Mall is imminent.
The Jack D’Arrigo family has grown Springs business Elco Steel into one of Gauteng’s largest private steel companies over the past 40 years. It also offers its services in Botswana, Namibia, Swaziland, Lesotho, Malawi and Zimbabwe.
Founded in Johannesburg in 1940, Giuricich Bros Construction (Pty) Ltd operates throughout South Africa. Renowned within the construction industry for the quality and variety of its projects, it specialises in building and civil construction, project and construction management and property development.
Flanagan & Gerard is a developer and investor in dominant regional shopping centres. Its developments since its founding in 2001 include Paarl Mall, Vaal Mall, Highveld Mall, Mall of the North and Middelburg Mall. It also developed New Redruth Village, Morningside Shopping Centre, Bedworth Centre, Makro Vanderbijlpark and Nicolway Bryanston.
Patrick Flanagan of Flanagan and Gerard says, “Springs Mall has all the ingredients for an exceptional retail development.”
Franco D’Arrigo explains that the social and economic impact of the regional mall will extend well beyond the borders of Springs.
“The mall is estimated to create between 500 and 700 jobs during the construction phase and a further 1,200 to 1,500 sustainable jobs after it opens,” explains Franco. “Local employment will be prioritised.”
The mall is expected to retain between R300 million to R500 million in revenue which is currently being spend outside of its borders and boost the Springs economy by R1.2 billion.
Springs Mall will cater for shoppers in its primary market of greater Springs including residents from Casseldale, Strubenvale, Pollak Park, New Era, Edelweiss, Selection Park, Nuffield, Selcourt, Sharon Park, Dunnottar, Brenthurst, Geduld, Petersfield, East Geduld, Bakerton, Welgedacht, and Paul Krugersoord. These people are mainly middle- to high-income earning consumers, from LSM 4 to 10+.
It will also attract shoppers from further afield including neighbouring towns like Vischkuil, Nigel, Devon and Leandra. In addition, Springs Mall will serve as an interceptor to the metropolitan area capturing trade on the N17 as far west as Ermelo in Mpumalanga.
Commenting, mayoral spokesperson for the City of Ekurhuleni, Zweli Dlamini says, “We welcome investment that improves our economy, creates jobs and assists with fighting poverty. We strive to build a liveable city and we can only achieve this by working together with the private sector.”
Dlamini describes Ekurhuleni as a sleeping giant in terms of economy development. “The City of Ekurhuleni is the most strategic for any investor. Apart from being home to the gateway of Africa and one of the busiest international airports in O.R Tambo, it is criss-crossed by all the major freeways in the country and hosts the biggest railway station in Germiston – thus making it every investor’s dream.
“We are a destination of choice to stay, work and play, and we welcome any investment be it small, medium or large because ours is to ensure that we create jobs, fight poverty and live up to the challenge of be the most liveable city in the province. Moreover we have the capacity to provide quality and sustainable services at all times,” says Dlamini.
Scheduled to start trading in April 2016, the centre will provide free open-air parking on both its shopping levels.