Monthly Archives: February 2016
Ministers are facing legal action from the Keep Sunday Special Group, in order to stop them from going ahead with plans to extend Sunday trading hours.
The Government has been issued with a “letter before action” group, which outlines plans for a judicial review on the proposals to allow councils to increase selling time on Sundays.
According to the campaign, the evidence used by the Government is outdated and an assessment carried out on the potential impact on family life has not been published.
“We do not enter into this action lightly, and do so with a heavy heart,” said a spokesman for the Keep Sunday Special campaign.
“There are fundamental flaws in the process that the Government has taken and full consideration is needed, not the inadequate process that has taken place to date.”
“Longer opening hours will serve only to benefit out of town stores, whilst hurting high streets, post offices and small shops – resulting in a net loss of jobs to the economy,” said Association of Convenience Stores Chief Exec James Lowman.
“We fully support this legal action to hold Government to account for their actions.”
The Government has defended the initiative because the power is being given to local councils and shop workers are guaranteed the option to work on Sunday.
“Extending Sunday shopping hours has the potential to help businesses and high streets better compete as our shopping habits change,” said a Government spokesman.
“The rights of shop workers are key to making these changes work in everyone’s interests. We are protecting those who do not wish to work Sundays, and those who do not want to work more than their normal Sunday working hours.”
Abercrombie & Fitch is now ranked as the most hated retailer in America
The clothing company scored a 65 on the American Customer Satisfaction Index for the retail industry for the first time ever
Just ahead of Abercrombie on the list is Walmart with a score of 66
The report by ACSI is based on a survey of customers who are asked about their recent shopping experiences at the biggest retailers in America
For the first time ever, Abercrombie & Fitch has debuted on the list of America’s most hated retailer.
The clothing company scored a 65 on the American Customer Satisfaction Index (ACSI) for the retail industry, which is almost 10 points below the entire sector’s overall score, CNN Money reported.
Since CEO Mike Jeffries left the company in December 2014, Abercrombie & Fitch had been working to re-brand itself.
This low score could mean bad news for the retailer, which has over 300 locations in the United States.
Home Retail Group has received a £1.4bn rival bid for Argos after supermarket Sainsbury’s offered £1.3bn for the company.
The second takeover offer has come from South African retailer Steinhoff, which offered 175p per share.
Sainsbury’s has until 23 February to make a firm offer for Argos.
Home Retail Group said the board was reviewing the Steinhoff proposal and it would make a further announcement soon.
A spokesperson added: “Home Retail Group shareholders are advised to take no action at this time.”
Sainsbury’s second offer for Home Retail Group came after an offer of £1bn was rejected.
Steinhoff, which owns the furniture chain Harvey’s in the UK, makes most of its products in developing countries, and sells its furniture across Europe.
The South African retailer said its offer would not disrupt the sale of Homebase, which Home Retail Group is in the process of selling to Australian retail company Wesfarmers. The firm plans to bring its Bunnings chain to the UK.
Sainsbury’s, like other UK supermarkets, has faced intense competition from discount retailers such as Aldi and Lidl.
Chief executive Mike Coupe said if the takeover went ahead the combination of the two companies would create the UK’s “food and non-food retailer of choice”, with 2,000 stores.
The tie-up would create the UK’s largest general merchandise retail business.
Mr Coupe said that the merger would bring savings in the region of £120m – half of which would come from putting Argos stores into Sainsbury’s supermarkets.
Meanwhile Steinhoff has until the 18th March to make a firm offer.
“We chose this West Street location for its high volumes of foot traffic and for its positioning as a transport hub and gateway to one of Africa’s biggest economies,” said Krispy Kreme’s CEO, Gerry Thomas. “An international brand as recognisable as Krispy Kreme is what people expect to see when visiting a metropolis such as Sandton.”
Thomas further assured fans that the opening day will follow the festive trend of the Rosebank launch, with a ribbon cutting and enticing prizes up for grabs. Along with T-shirts for the first 100 customers in the queue, they will also stand a chance to win doughnuts for six or 12 months, depending on how close they are to the number four position. The die-hard fans who elbow their way to positions one to three will receive a dozen Krispy Kreme’s original glazed doughnuts every week for a year, six months and three months, respectively. Fans are encouraged to keep an eye on Krispy Kreme social media updates to know exactly when and where they need to be in order to stand a chance to win.
The Krispy Kreme brand, which is owned jointly by franchise companies Fournews and John and Gerry Brands, is set for rapid expansion over the next year. “Our aim is to open at least six more stores before the end of 2016 in Gauteng, with a long-term plan for 31 outlets across the country over the next five years,” continued Thomas. “With such a strong positive response to our first store, we look forward to being able share the joy of Krispy Kreme with many more stores in the months to come.”
REPORTThe H&M group’s sales including VAT increased by 7 percent in local currencies in January 2016 compared to the same month last year. The company said that in January there was a negative calendar effect of approximately 2 percentage points because the month had one more Sunday than in January 2015.
The total number of stores amounted to 3,958 on January 31, 2016 compared to 3,541 on January 31, 2015. H & M, founded in Sweden in 1947, along with H&M brand offers other fashion brands such as COS, Monki, Weekday, Cheap Monday, & Other Stories as well as H&M Home.
Retail is an enormous and profitable industry. Global sales were projected to top $24 trillion in 2015 and are expected to grow another 3.2% this year, making the magnates who run the sector’s largest companies even wealthier.
We recently released our list of the 50 richest people on earth based on data from Wealth-X, which conducts research on the super wealthy. Three people in the top 10 are in retail — including the visionaries behind Zara, Amazon, and IKEA — and 12 others cracked the list as well.
To find the wealthiest people in the world, Wealth-X looked at its database of dossiers on more than 110,000 ultra-high net-worth people and used a proprietary valuation model that takes into account each person’s assets, then adjusts estimated net worth to account for currency-exchange rates, local taxes, savings rates, investment performance, and other factors. We narrowed that list down to just the billionaires in the retail industry.
Here are the 15 wealthiest people who made their billions in retail:
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15. Leonardo Del Vecchio
15. Leonardo Del Vecchio
Net worth: $19.7 billion
Source of wealth: Self-made, Luxottica Group
Even at 80, Leonardo Del Vecchio still chairs Luxottica, the nearly $30 billion company he founded in 1961. The largest eyewear company on the planet, Luxottica not only owns Sunglass Hut, Ray-Ban, and Oakley, but also manufacturers glasses for nearly every luxury brand out there, including Burberry, Chanel, Prada, and Versace.
Though Del Vecchio started Luxottica as a tiny one-room enterprise in Milan, it now operates 10 factories worldwide, employs 35,000 people, and produces more than 65,000 pairs of glasses per day, holding a veritable monopoly on the eyewear industry.
Del Vecchio isn’t all business, though. Last March, he showed his generous side by giving his Italian employees $10 million worth of shares in the company to celebrate his 80th birthday.
14. Dieter Schwarz
14. Dieter Schwarz
Net worth: $20.9 billion
Source of wealth: Inheritance/self-made, Schwarz Gruppe
Dieter Schwarz joined his father’s food-wholesaling business in 1973 and opened the company’s first discount supermarket shortly thereafter. He took over as CEO when his father died in 1977 and rapidly expanded the business outside Germany, rebranding the company as Schwarz Gruppe.
The parent company umbrellas Lidl, a successful grocery-store chain and the second largest in Germany behind Aldi, and Kaufland, a chain of “hypermarket” stores similar to Walmart. Lidl has nearly 10,000 stores across 26 European countries and is set to break ground on US soil in 2018. Schwarz Gruppe now pulls in $85 billion in annual sales.
The German billionaire lives a quiet life out of the spotlight with his wife and two kids in their hometown of Heilbronn. He’s reportedly a generous donor to educational causes.
13. Phil Knight
13. Phil Knight Christian Petersen/Getty Images
Net worth: $25.7 billion
Source of wealth: Self-made, Nike
After a stint in the US Army, and with a Stanford MBA under his belt, Phil Knight convinced Tiger-brand shoemaker Onitsuka in the early 1960s to allow him to distribute Tiger shoes under the name Blue Ribbon Sports — the name Knight picked that predated his swoosh-logo-clad company Nike. Knight worked full-time as an accountant as he launched his new brand, and by 1968 he had built up enough of a rapport with customers that he was able to leave the CPA life behind.
Nike has built its success on celebrity and athlete-endorsement deals, starting with running prodigy Steve Prefontaine in 1973 and continuing with one of the most successful shoe marketers of all time in Michael Jordan. Nike signed him to a five-year endorsement deal in 1984 worth roughly $500,000 per year. The biggest NBA star today is still under the Nike roof, with LeBron James signing a lifetime contract with the brand in December for an undisclosed sum.
Though Knight announced plans in June to step down as Nike chairman, he’s leaving the $30.6 billion — in sales — company in better shape than ever, with the stock and revenues at all-time highs.
12. Jack Ma
12. Jack Ma REUTERS/Lucy Nicholson
Net worth: $26.5 billion
Source of wealth: Self-made, Alibaba
The second-richest person in China, Alibaba founder and executive chairman Jack Ma reportedly started China’s first internet company in 1988: China Yellowpages. He lost control of that company to a state-owned telecom in 1996 and started Alibaba three years later with just $60,000. Fifteen years after its inception, the e-commerce company broke records with a $25 billion initial public offering — the world’s largest ever.
Post-IPO, however, Alibaba’s good fortune began to slip. The company’s shares dropped 22% in 2015, most likely because of China’s slowing economy and concerns over counterfeiters using the company’s platform. Ma isn’t worried, though. He acknowledges that the next year will be a trying time for the Chinese economy, but he remains confident in Alibaba’s long-term success. The company is dominant in one of the world’s biggest markets, and he says the West’s concern over China’s economic slowdown is an “overreaction.”
Additionally, Ma plans to push Alibaba outside of China and significantly expand its ventures abroad. He got in US President Barack Obama’s good graces after being interviewed about climate change and entrepreneurship by the president at the Asia Pacific Economic Cooperation Summit in November.
11. Stefan Persson
11. Stefan Persson Wikimedia Commons
Net worth: $26.7 billion
Source of wealth: Self-made, H&M
Stefan Persson was born in 1947, the same year his father founded a women’s clothing store called Hennes. The Swedish entrepreneur expanded his business in 1968 when he acquired men’s clothing store Mauritz Widforss, forming Hennes & Mauritz — H&M. Six years later the company went public, and in 1976, after earning degrees from the University of Stockholm and Lund University, Stefan joined his father at the helm. He served as head of UK operations and shortly after succeeded his father as CEO.
Over the past three decades, H&M has expanded its operations globally, now boasting nearly 4,000 stores in places like Hong Kong, China, Tokyo, Japan, Russia, and the US. In 2009, Stefan stepped down as CEO and the third generation — his son, Karl-Johan — took over the company, which had sales of $22.4 billion in 2014.
8. to 10. Forrest, Jacqueline, and John Franklyn Mars
8. to 10. Forrest, Jacqueline, and John Franklyn Mars
John Stillwell – WPA Pool/Getty Images
John Franklyn “Frank” Mars.
Net worth: $28.6 billion each
Age: 84, 76, and 80
Source of wealth: Inheritance, Mars Inc.
Siblings Forrest, Jacqueline, and John Franklyn “Frank” Mars inherited a stake in iconic candymaker Mars Inc. when their father, Forrest Sr., died in 1999. The notoriously private trio co-own but don’t actively manage the maker of M&M’s and Milky Way bars, which their grandfather started in 1931 as a confectionary business in his kitchen in Tacoma, Washington.
In 2008, Mars Inc. branched out from chocolate to gum when it acquired the Wrigley Jr. Co. for $23 billion. Since then, it’s delved into pet food, buying Iams and two other brands in 2014 from Procter & Gamble for close to $2.9 billion.
Together the three siblings run the Mars Foundation, which gives primarily to educational, environmental, cultural, and health-related causes. In March 2015, Frank Mars was made an honorary knight by Queen Elizabeth II.
7. Bernard Arnault
7. Bernard Arnault Wikimedia Commons
Net worth: $28.9 billion
Source of wealth: Inheritance/self-made, LVMH
Bernard Arnault’s LVMH houses 70 luxury brands from Louis Vuitton to Hennessy to Dom Perignon, all controlled by family parent company Groupe Arnault. By the 1980s and ’90s, Arnault, who started out as a civil engineer, had assumed control of the family business and proceeded to buy high-end fashion house Christian Dior, reviving it from the brink of bankruptcy. Like most LVMH brands today, Dior once again thrives as an industry standard bearer, helping the firm haul in a record $33 billion in revenue in 2014.
This year, the French chairman and CEO is joining US-based private-equity firm Catterton to form an investment firm with a consumer focus. The new firm, to be named L Catterton, is targeting $12 billion in assets under management and will be 40% owned by LVMH and Groupe Arnault.
6. Alice Walton
6. Alice Walton
D Dipasupil/Getty Images
Net worth: $33.2 billion
Source of wealth: Inheritance, Walmart
The daughter of late Walmart founder Sam Walton, Alice Walton holds a major piece of the company fortune, making her the richest woman on earth. Though she never took an active role in running the superstore like her brothers, she’s become the target of pushback from minimum-wage Walmart employees who view her highfalutin lifestyle as insensitive and ignorant to the plights of many workers.
Instead of spending time at Walmart, Walton has become a patron of the arts. Her immense personal collection includes pieces by Andy Warhol, Norman Rockwell, and Georgia O’Keefe. In 2011, she opened the $50 million Crystal Bridges Museum in Arkansas, where a number of her famous paintings are on display.
Walton also recently donated 3.7 million of her Walmart shares to the family’s nonprofit and put her Texas ranches — one a working horse ranch, the other a luxurious vacation spot — on the market for a combined $48 million.
5. Rob Walton
5. Rob Walton Reuters
Net worth: $33.5 billion
Source of wealth: Inheritance, Walmart
Samuel Robson “Rob” Walton is the oldest son of Walmart founder Sam Walton. He started working at the iconic retail behemoth in 1969, holding positions from senior vice president to general counsel to chairman, a role he stepped down from in June after 23 years on the job. His son-in-law was named his successor.
Despite Walmart’s reputation as a greedy corporation that underpays its employees, the Walton family — the richest in America — has a philanthropic streak. Regulatory filings on New Year’s Eve revealed that he and his brother each gave away 1.5 million Walmart shares to the family charity, Walton Family Holdings Trust, while sister Alice gave away 3.7 million shares, for a total family donation of $407 million.
It’s an incredible amount, but it’s also ultimately a drop in the bucket for the Waltons, whose stake in the company — about 50% — is worth nearly $100 billion.
4. Jim Walton
4. Jim Walton REUTERS/Rick Wilking
Net worth: $34.8 billion
Source of wealth: Inheritance, Walmart
James “Jim” Walton’s parents, Helen and Sam Walton, purchased a controlling stake in Arkansas’ Bank of Bentonville the year before opening the first Walmart store in Rogers, Arkansas, in 1962 — when Jim was just 14. Within five years, the family owned 24 of the retail stores and in 1972 listed Walmart on the New York Stock Exchange. In 1975, after working in Walmart’s real-estate department for a few years, Jim joined his parents’ bank, later renamed Arvest Bank Group. He’s now chairman and CEO of the regional community bank, which has $15 billion in assets.
The businessman is also director of Walton Enterprises, the holding company for the Walton family’s assets, and chairman of Community Publishers, an Arkansas-based newspaper firm. After the death of his brother John in 2005, Jim joined the board of Walmart, where he serves as a director today.
While America’s richest family remains incredibly private, the Walton Family Foundation, of which Jim is secretary and treasurer, has donated millions to charitable causes. In December 2015, Jim and his siblings donated $407 million worth of Walmart shares to a newly formed trust that funds the Walton’s philanthropy, which focuses on educational, cultural, community-development, and social causes.
3. Ingvar Kamprad
3. Ingvar Kamprad REUTERS/ARC/Jean Bernard Sieber
Net worth: $39.3 billion
Source of wealth: Self-made, IKEA
At 17, Ingvar Kamprad founded IKEA, now the world’s largest furniture retailer with sales exceeding $33 billion. Kamprad’s plan from the beginning was to set up “eternal life” for IKEA, which meant keeping it off the stock market and securing it within a complex corporate structure that includes a charitable arm and a retail and franchise arm, collectively known as Stichting INGKA Foundation. While the Swedish business magnate is no longer directly involved in day-to-day decision-making operations, he still sits in on meetings as senior adviser to the supervisory board.
Among his peers, the 89-year-old founder is incredibly frugal despite his massive net worth. He reportedly flies economy, stays in cheap hotels, and has driven the same Volvo for more than two decades. He also infamously moved IKEA and his family out of Sweden in the 1970s to avoid its onerous tax rates. He returned to live in his home country in 2013 after a long spell in Switzerland.
But Kamprad has also been generous with his wealth, donating to child rights, immunization, environment and wildlife, education, and medical research, with personal lifetime giving of $300 million.
2. Jeff Bezos
2. Jeff Bezos Reuters/Shannon Stapleton
Net worth: $56.6 billion
Source of wealth: Self-made, Amazon.com
Jeff Bezos earned his massive fortune by introducing e-commerce to the world. After spending time in finance on Wall Street, Bezos founded Amazon.com in the garage of his Seattle home in 1994 and operated it exclusively as an online book retailer. The company went public three years later and has since grown to include everything from furniture to food to Amazon’s own consumer-electronics products, generating $89 billion in sales in 2014.
While Bezos, chairman and CEO, faced a barrage of negative media attention last year for reports that Amazon’s warehouses are high-pressure, toxic work environments — claims he disputed — the internet retailer continues to thrive with the growth of Amazon Web Services, the company’s cloud-computing branch, and a bold plan to conquer India’s “trillion dollar” online-retail market.
Bezos also has interests outside of Amazon, including investments in his privately owned space company Blue Origin, which successfully launched its first spacecraft in 2015, and The Washington Post, the newspaper he bought in 2013. And early this month he invested millions in a company that’s creating a simple blood test to detect every form of cancer.
1. Amancio Ortega
1. Amancio Ortega Getty Images / Xurxo Lobato
Net worth: $66.8 billion
Source of wealth: Self-made, Inditex
With a net worth in excess of $66 billion, Amancio Ortega is the second-richest man in the world thanks to his control of the Spanish fashion behemoth Inditex, which Ortega — who started out as a delivery boy for a local clothing store at 14 — turned from a small-town dress shop into one of the largest fashion empires on the planet.
His rising wealth is tied to the spike in the growth of Inditex, which saw its stock rise 34% last year. Sales were up 16% and profits increased 20% for the first nine months of 2015, and the company opened 230 new stores across 48 markets. Much of this success can be attributed to fast-fashion giant Zara, the company’s biggest brand. The chain is changing the landscape of retail as its chic yet affordable designs continue to appeal to demanding customers who constantly crave new styles at low prices.
Yet despite Ortega’s immense wealth, he lives humbly. The billionaire still eats lunch with his employees in the company cafeteria, and though he’s the richest person in the fashion industry, he sticks to a simple uniform of a white shirt and blue blazer.
New Look has posted a rise in third quarter sales and profits despite the highly ”promotional environment”.
The fast-fashion chain said pre-tax profits grew 38.9% to £87.9m during the nine months to December 26.
New Look’s own-brand online sales rose 3.4.7% during the period while earnings from external players increased 32.7% online.
Over the festive trading period, the high street giant saw a 3.2% rise in sales during the seven weeks to January 2.
“In what has been perceived as a tough market this quarter, we feel pleased with this performance,”said CEO Anders Kristiansen.
“Our preparation and readiness for the peak trading season ensured we delivered good results, despite the highly promotional environment in the UK including the competitive challenges generated by Black Friday.”
Menswear standalone stores continue to surpass expectations and 15 to 20 additional stores will open.
Hunter has announced the appointment of Vincent Wauters as Chief Executive Officer, effective 1 March 2016.
Wauters joins the outdoor clothing retailer from Arc’teryx, where he was President of the outdoor and lifestyle brand, headquartered in Vancouver. He was a member of the Executive Board of Amer Sports Corporation, in charge of the apparel and gear category. With experience in building consumer brands and optimising operational efficiency, Wauters has been brought in to drive Hunter forward during its next stage of development.
Prior to Arc’teryx, Wauters served as Senior Vice President Operations within Amer Sports Corporation. Previously, he worked for Newell Rubbermaid in various operational roles from 2002-08, and for Amazon in France, where he was one of the company’s first employees.
“I am honoured to join such an iconic brand, said Wauters. “The combination of heritage, performance and fashion is what makes Hunter so unique. What has been accomplished in the last few years is remarkable and I look forward to building on this, realising Hunter’s global potential and setting the path towards an ambitious and inspiring brand future.”
Hunter’s first global flagship store opened on London’s Regent Street in November 2014. The brand’s second flagship will open in Tokyo in March 2016. Flagships will follow in key locations, including Hong Kong and New York.
In January 2012, funds managed by Searchlight Capital Partners L.P., a private investment firm operating in Europe and North America, became majority shareholders in the Company. Turnover in 2014 reached £95.7m, a 17% increase year on year, with pre-tax profits of £15.4m.
Finery, the online fashion retailer of womenswear, shoes and accessories, has decided to have an offline presence. It is set to open physical outlets in six flagship stores of John Lewis. The move follows the company clocking £5m (€6.5m, $7.3m) in its first year of sales.
Nickyl Raithatha, cofounder at the company, said: “We are on the cusp of becoming mainstream. [It will] accelerate awareness of our brand. It is important for us to be wherever our customers what to be and there will always be people that want to try clothes on before they buy.”
He added that the company had beaten expectations by attracting 10,000 customers since its launch 12 months ago. Raithatha said while there are no current plans for a standalone store, it is working on opening more of these concession stores, which are essentially miniature stores operated by the brand and located within a larger store, to enable reaching out to more customers.
The move also reflects the latest trend of online retailers having a physical presence. Examples of other such internet-based retailers include furniture companies. In 2015, Loaf and Made.com set up high street stores and more recently online giant Amazon launched its physical bookstores across the US.
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Finery was set up in 2015 by Caren Downie, Raithatha and Luca Marini. While Downie is a former fashion director at Topshop, Raithatha and Marini are both from Harvard University with work experience at Rocket Internet, the German company that builds online startups and owns stake in various models of internet retail businesses.
The London headquartered company is backed by Global Fashion Group that is dedicated to bringing fashion online to emerging markets and has shareholders including Kinnevik, the Swedish investment firm, and Rocket Internet. Finery designs all of its offerings in-house and prices its collection of the 150 to 200 items that it produces between £40 and £250.
Raithatha said: “We realised there was a gap in the market for women who wanted quality designed clothes between the high street and designer.” Downie, who is considered to be amongst the most influential women in British fashion, said the inspiration to start Finery came with the desire to provide both quality and design at accessible price points, according to The Telegraph.
LONG ROAD: At a results presentation on Wednesday, recently appointed Edcon CE Bernie Brookes outlines changes the heavily geared apparel retailer is making to bring customers back and streamline operations. Picture: MARTIN RHODES
LONG ROAD: At a results presentation on Wednesday, recently appointed Edcon CE Bernie Brookes outlines changes the heavily geared apparel retailer is making to bring customers back and streamline operations. Picture: MARTIN RHODES
This is the second round of job cuts at Edcon’s head office, following last February’s retrenchments, and the process is expected to be completed by March
EDCON, the retailer that owns brands such as Edgars, CNA and Jet, will cut jobs at its head office as part of its turnaround strategy.
“The process commenced on February 5 — it is still too early to have a final number at this stage; definitely not two-thirds of workforce. We anticipate that the process will only be concluded around March,” a spokesperson said.
Media reports claiming it would slash two-thirds of its 3,000 head office staff were “factually incorrect”, the company said. This is the second round of job cuts at its head office, following last February’s reduction.
Edcon was bought by Bain Capital for R25bn in 2007 in a deal that burdened the retail group with debt.
The company, under new CEO Bernie Brookes, was looking to take back market share through boosting store space productivity and reviving its high-margin private label brands such as Kelso at its ailing Edgars chain.
The job cuts will not affect stores.
Apple appears close to getting the regulatory green light to open its first retail stores in India.
The company is expected to win approval from the Indian government to launch the stores, the Bloomberg news service reported Sunday, citing “a person with knowledge of the matter.”
Apple did not immediately respond to a request for comment on the Bloomberg story.
Normally, India requires that any foreign business selling a single brand in the country buy all its components from local manufacturers, something that would be an obstacle for Apple, which gets most of its parts from Chinese vendors. That requirement has reportedly been waved since Apple has been classified as a “provider of cutting-edge technology,” the source told Bloomberg.
Apple already sells the iPhone, iPad and other products in India both online and through resellers. But its market share there is only about 2 percent. Retail stores could boost sales by giving customers in India a chance to put their hands on the company’s devices and to speak in person with customer service employees.
Opening retail outlets in India represents both an opportunity and challenge for Apple. Hit by weaker iPhone sales growth in established markets, Apple needs to push the phone in other regions. India is one of the fastest-growing smartphone markets in the world. But it’s also a market that likes budget-friendly phones, including those made by top vendor Samsung. Apple’s iPhone is a premium-priced product.
So how might Apple lure customers to buy the iPhone at its new stores? Deep discounts, one analyst told Bloomberg. The company will likely continue to offer heavy discounts on older models, such as the iPhone 5S, Tarun Pathak, a senior analyst at Counterpoint Technology Market Research, said in the report.
Appealing to new users will also be key to growing Apple’s market share in India, which is only around 2 percent.
“Most of the growth in India will come from new users coming into the Apple ecosystem, unlike in the West where growth is mainly from existing users upgrading,” Pathak said. “You can expect the stores to focus mostly on iPhones.”
The Wall Street Journal reported in January that Apple had requested approval from the Indian government to open retail stores in the country.
During a call with analysts in late January to discuss last quarter’s earnings, CEO Tim Cook highlighted India as a rapidly expanding country and the third-largest smartphone market in the world, behind China and the United States. Cook cited India as a growth market due to its young population, great demographics for a consumer brand and good business environment. He added that Apple has “been putting increasingly more energy in India.”
Apple Stores have been an important factor in the company’s success. The company now has 463 retail stores across 16 countries. Apple Stores had the highest sales per square foot of any retailer in the US, Fortune reported last year.
AS A stock analyst with nearly two decades’ experience, Sasfin Bank’s Alec Abraham has seen a number of high-flying companies crash back to earth. In recent months, he became concerned about what he saw as an alarming shift in focus from the one-time darling of the clothing retail sector, Mr Price.
“For years, Mr Price’s philosophy was to provide designer fashion at an affordable price. It got them a prime slice of that higher income market, and it worked exceedingly well,” says Abraham.
He isn’t exaggerating: the company hit a sweet spot that few others were brave enough to try during the dark days of the late 1980s, when the economy was battling under PW Botha’s last kicks of grand apartheid.
At the time, founders Laurie Chiappini and Stewart Cohen had returned from a trip to the US with the plan to replicate the American cash-based factory shop idea — a somewhat radical proposition, as the dominant idea at the time was of a retail sector led by the likes of Edgars pushing credit.
In the end, what Chiappini and Cohen succeeded in doing was to launch one of SA’s great retail success stories. Shoppers flooded stores, seeking out Mr Price’s “on-trend” clothes which aimed to make “catwalk fashion accessible to customers at highly competitive prices”.
And investors made a killing. In the past decade alone, Mr Price’s stock has provided a total return, including dividends, of 513%. For those who invested R10,000 in 1989, they’d now have R4.5m.
Yet despite this fantastic start, Mr Price seems to have lost its lustre. Its harshest critics think the company has lost its mojo.
“It seems to me,” says Abraham, “that Mr Price’s merchandise has become more mainstream. Sure, they’ve got more of the young, emerging black middle class into their stores, but they’ve lost a little bit of their differentiation, and alienated their higher-income customers”.
Such a step down would be risky, exposing a retailer to customers who are more at the mercy of a faltering economy.
To add to the pressure, a number of hot-shot foreign retailers have opened shop here, among them the Australian brand Cotton On, Sweden’s H&M and Spain’s Zara. These have struck a chord with shoppers.
Predictably, Mr Price’s brass disagreed with Abraham’s view. Though the company says its philosophy hasn’t changed, there certainly appears to have been a shift on the store floor.
British retailer The Co-operative Food has purchased 15 Budgens convenience stores, mostly located in in London and the South East, from Booker for an undisclosed amount.
The Manchester Evening News further reported that the acquisition is part of the company’s strategy to establish its dominance in the growing convenience store market in the United Kingdom.
The Co-op Food aims to acquire 100 new stores in 2016, according to the company’s chief executive for Retail Steve Murrells.
Moreover, the Co-op Food’s Property team has also recruited acquisition managers with solid experience in some of the UK’s leading retail businesses, including William Hill, Morrisons and Tesco, to pursue Co-op’s expansion plans in 2016 and beyond, according to a separate company release.
MPs Sadiq Khan and Zac Goldsmith have committed to the pedestrianisation of Oxford Street in an attempt to reduce pollution and congestion.
During the Evening Standard’s mayoral hustings on this week, Khan responded to a question from the New West End Company with:
“From Marble Arch to Tottenham Road, you could have squares and boulevards and make it really appealing for people. Crossrail will help with that. A productive Oxford Street does a huge amount of benefit for the rest of London.”
“I sense from talking to businesses, residents and the council — who have been historically resistant to the idea of attacking Oxford street — there is an appetite for something radical,” added Goldsmith. “So I think we can and should, and I have committed to pedestrianise Oxford Street and I have committed to working with the councils and TfL to ensure the buses then don’t have to use the residential streets around Oxford Street.”
Liberal Democrat candidate Caroline Pidgeon also pledged to ban vehicles from Oxford Street and added that Sunday trading hours should be relaxed.
A billion-dollar Australian clothing company most people have never heard of has plans to take over America
Cotton On Group might be the next big thing in America.
The Australian retail company is wildly successful and just reported its first $1 billion year in revenue.
The 25-year-old apparel company has well over 1,400 stores in 17 countries, and now it has plans to continue its rapid expansion in the United States.
The company has launched 121 US stores in the past six years, with a corporate hub based in Los Angeles. The company has six hubs around the world to help manage its business across the globe.
The apparel company ostensibly operates on a fast fashion modicum, selling trendy clothes to women, men, and children for low prices. Its subsidiaries are further reaching, as they include a lingerie, sleepwear, and swimwear store (Cotton on BODY), a shoe store (Rubi), and a stationery store (Typo). In addition to its namesake apparel store, it also has Cotton On KIDS, Cotton, Factorie, and Supré under its umbrella. Currently, Cotton On, Cotton On Kids, and Typo are in the United States.
But despite being a global entity, the company prides itself on its Australian lifestyle.
“The Australian way is far more humble and [an] understated sort of style,” CEO Peter Johnson said to Business Insider, while maintaining that the company is just “aggressive internally.”
The expansion is, indeed, aggressive: it plans to open hundreds more stores in the United States in the next three to five years. Currently, ten stores are on track to open this year.
Obviously, competition is steep, but Cotton On Group maintains that it’s different from other fast fashion companies.
“We focus on the customer rather than the competition,” Johnson said.
Johnson also prefers to forgo the phrase “fast fashion.”
“We prefer to use the term value fashion,” he said.
“What you pick up you think is going to cost a lot more than it really does,” he said, adding that the company isn’t “playing to a price point.”
However, Cotton On’s stores have something in common with fast fashion companies like Zara: a tight supply chain.
Johnson highlighted the importance of moving quickly in the apparel industry.
“The response of something that takes off is so much faster and so much bigger …. that period used to be anywhere from six to twelve months,” he said. “I think that period has crunched.”
Look no further than how Instagram has changed the way consumers shop — people see styles on Instagram and immediately want to sweep them up. This change has been partially responsible for undoing traditional retailers like Gap.
“When there’s something that’s working in the market you need to be on it really fast … because everyone will get it, and so it’s important to be confident to go big and large with confidence early …. as opposed to at the end of the cycle.”
He said that Cotton On uses testing to make sure that products hit the right buttons with consumers.
The company is also attuned to the consumer’s desire for a connection.
“I guess the other thing we’re seeing more recently is a far greater need to have a connection a brand, not just the product,” Johnson said. ” So we feel that … customers are looking for something a bit more genuine, a bit more real, [asking] ‘what’s the story behind this.’”
“We have that story resonating with our customer,” he said.
British stores will be open for longer now that ministers are to go ahead with allowing councils in England and Wales to relax Sunday trading laws.
Measures that will affect Sunday opening hours will be put forward as amendments to the Enterprise Bill, Business Secretary Sajid Javid announced on Tuesday.
Small shops up to 280 sq m are currently entitled to open at any given time but on Sundays, larger stores are restricted to six hours of trading between 10am and 6pm.
Javid said the move would allow local authorities to “help struggling High Streets” and that the decision to change Sunday trading hours would be “entirely local”.
“These new powers are about giving local areas the choice to extend Sunday trading hours to meet the needs of their local businesses and communities,” Javid said. “Extending Sunday trading hours has the potential to help businesses and high streets across the UK better compete as our shopping habits change.”
“If the people of Bromsgrove or Barking say they want to see longer Sunday opening hours, who are we here in Westminster to stand in their way?” Javid asked.
Under the proposals, local authorities will be able to restrict the longer hours to certain zones – such as High Streets and city centres, the Department for Business, Innovation and Skills said.
Shop workers who wish to “opt out” of working on Sundays will be able to do so, for example on religious or family grounds. Staff in larger shops who would prefer not to work on Sundays altogether will be able to give their employer just one month’s notice, rather than three.
Sainsbury’s offers Home Retail £1.3bn
Following an intense weekend of negotiations, Sainsbury’s and Home Retail have reached an agreement on the financial terms of a takeover deal that values Argos at around £1.3bn.
The base offer indicates a £1.1bn valuation for the retailer, but Sainsbury’s is adding payments on top to compensate Home Retail investors for the final dividend they would have received without the deal, raising it to £1.3bn.
With Homebase out of the way Sainsbury’s acquisition of Argos would create a business with a bigger non-food category than that of John Lewis or Marks and Spencer, potentially attracting 25m customers a week.
The combined retail offer “plays into the way that consumers are changing”, CEO Mike Coupe said on a conference call on Tuesday morning.
According to Coupe, 40-45% of the UK’s population shop with Sainsbury’s and Argos. With the nimble delivery operations that Argos has to offer, the deal would “bring together multi-channel capabilities including digital, store and delivery networks”, Sainsbury’s said, creating “a food and non-food retailer of choice” for customers.
The combined group is targeting double-digit profit growth by the third year of the merger, when annual cost savings will be around £120m.
The merger will incur costs of £140m, to be spread out over three years, with a further £140m to be spent on refitting stores to accommodate Argos concessions and click-and-collect counters within Sainsbury’s supermarkets.
John Lewis is to set foot in the UAE, strengthening the British department store retailer’s presence overseas, particularly in the Asian and Middle Eastern markets.
According to The Times, John Lewis will open a ‘shop-in-shop’ in the Robinson department store in the Dubai Festival City Mall come spring next year.
News of the move comes two months after the high street giant announced the opening of seven shop-in-shops within De Bijenkorf department stores in the Netherlands. The first three shops will open this spring in Amsterdam, Rotterdam and the Hague.
John Lewis said that its shop in Dubai will be the biggest international shop-in-shop, so far at around 15,000 sq ft in size. It will sell own-brand furniture, cookware, textiles, glassware and nursery products, as well as bed, bath, living and gift assortments. In essence, it will serve as the home and lifestyle section of the Robinson department store.
Dubai Festival City Mall is expanding under developments led by Al-Futtaim, the Middle East development and retail conglomerate, marking Robinson’s first department store in the UAE. At nearly 180,000 sq ft in size, the store will be the largest in the region when it is completed.
John Lewis is also extending its partnership with Robinson to Malaysia, with intent to open a 630 sq ft shop within the Robinson’s Kuala Lumpur store in March.
The Managing Director of John Lewis, Andy Street, is not currently looking to open full-scale department stores outside of the UK, and said:
“The success [of the existing international shop-in-shops] has given us the confidence to open in the Middle East and increase both the scale of the space and product assortment. This is an exciting time for Al-Futtaim’s Dubai Festival City Mall and we’re pleased that John Lewis will be part of the next phase of its development.”