Monthly Archives: June 2016

Prada opens new store at Gold Coast, Pacific Fair, Australia

Prada has recently opened a new store on the Gold Coast in Australia at Pacific Fair. The store covers 310 square metre and features apparel, leather goods, accessories and footwear for men and women. The store comprises a succession of rooms, each featuring a different atmosphere.

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Sir Philip Green in BHS talks with Pensions Regulator

Sir Philip Green has been in secret negotiations this week with the Pensions Regulator about plugging BHS’s £571m pension shortfall, Frank Field, chair of the Work and Pensions select committee has revealed.
The Topshop tycoon had promised publicly to “sort” the retailer’s pension deficit in a testy evidence session in Westminster two weeks ago, after the collapse of his former business left 20,000 BHS pensioners facing a cut on their income and 11,000 job losses.
Mr Field teasingly suggested the codename of the latest pension restructuring proposal should be called “Project Tina, as the money will be coming from her” – referring to Lady Tina Green, Sir Philip Green’s wife and owner of the family’s retail empire.
Neville Kahn, managing partner at Deloitte, who was being grilled by MPs about the collapse of BHS, refused to comment on the confidential discussions which occurred during a meeting on Monday between Sir Philip and The Pensions Regulator and would not give a timeline for a resolution.
He did, however stress the codename was “Project Atlantic”, not “Project Tina”.

H&M to expand into regional Australia

Swedish fashion house H&M is showing no signs of slowing its Australian expansion, declaring plans to reach out to regional areas through the addition of two more stores.
The group already has nine in operation on the east coast and one in Western Australia just two years after launching with much fanfare in Melbourne.
It has recently declared an intention to open two more stores in each of Melbourne and Sydney as well as an outlet on the Gold Coast and in Newcastle.
The new offerings will be in the NSW town of Wollongong and in Queensland’s Toowoomba, with both to open prior to Christmas.
Should its plans come to fruition; the firm will have at least 18 stores in operation by the end of 2016.
In March, it was revealed H&M Australia had recorded a maiden profit of $3.8 million for the 12 months to November 30, 2015, a sharp improvement from the prior year’s $1.5m loss owing to the addition of several stores.
The retailer said at the time it had “been a bit overwhelmed” by demand, with Australia its fastest-growing market.
The expansion news places further pressure on local incumbents that have seen a host of big names, including Spain’s Zara, Britain’s Topshop and Japan’s Uniqlo, expand on Australian shores in recent years.
The announcement from H&M came on the same day the head of Target and Kmart, Guy Russo, talked up the Swedish group’s clean operating model.

Tesco To Sell Coffee Chain To Caffe Nero

Tesco (Xetra: 852647 – news) has announced it plans to sell coffee chain Harris (Stuttgart: HRS.SG – news) and Hoole to Caffe Nero – as boss Dave Lewis said he was encouraged by progress across the wider business.
It (Other OTC: ITGL – news) follows the recently announced disposals of garden centre chain Dobbies , the Giraffe restaurant chain, and Turkish supermarket Kipa.
A sale of Harris and Hoole had been expected to follow as boss Dave Lewis continues to slim down the business to focus on its core UK supermarket trading, reversing the dramatic expansion of the retail behemoth under previous management.
Shares (Berlin: DI6.BE – news) rose more than 1% in early trading and closed 0.8% up.
The announcement came as Tesco reported a second successive quarter of sales growth for the first time in more than five years.
Britain’s biggest supermarket said UK like-for-like sales rose 0.3% in the first quarter to 28 May – but this was a slowdown compared to 0.9% growth in the fourth quarter and Mr Lewis said the market remained tough as prices fall.
Mr Lewis said: “We have delivered a second quarter of positive like-for-like sales growth across all parts of the Group in what remains a challenging market with sustained deflation.
“We are encouraged by the progress we are making.”
Tesco said much of the “deflationary” effect weighing on its sales growth came from its introduction of cheaper new ranges including meat, fruit and vegetables.
The supermarket is battling to recover under Mr Lewis, who took over nearly two years ago when predecessor Phil Clarke departed amid sliding sales and tumbling profits.
Tesco is also facing the fallout from an accounting scandal.
In May, it reported a £162m annual profit after slumping to a £6.33bn loss the year before, though warned that the tough market would slow the pace of profit improvement. 
The wider industry is under pressure as store chains cut prices, faced by the threat from discounters Aldi and Lidl.
Tesco said in its latest trading update: “Following on from the agreed sales of Dobbies Garden Centres and the Giraffe restaurant chain, we are announcing today the proposed sale of Harris and Hoole to Caffe Nero.
“Together, these sales allow us to place even greater focus on our core UK business.”
Harris and Hoole has 43 shops and around 400 staff. Tesco first took a stake in the company three years ago before later taking full ownership. The sale price for the business has not been disclosed.

Max Mara Group launches two new brands

Max Mara Group has added to its portfolio by launching two new brands with a contemporary, accessible positioning: Tresophie and AIIM will be available with the Spring 2017 season and will be initially distributed via physical and online multi-brand stores, then via their own e-stores from the end of 2017.

Through Tresophie, the Italian group intends to carve out a niche in the sophisticated, contemporary dress segment. The collection will consist chiefly of dresses of different cuts and styles, catering to all the requirements of contemporary women: from gowns to evening dresses to those for important appointments. Besides dresses, the label will also feature tops, skirts, jumpsuits and ten or so jackets and boleros, all with special occasions in mind.
Distribution-wise, the 52-item collection will be available at the end of January 2017 in physical and online multi-brand stores in Italy, France, the UK and Russia. The average price of Tresophie clothes will be €280. From the end of 2017, the brand will operate its own e-shop.
AIIM is the acronym of ‘Art is inside me’. The brand will focus on knitwear, offering a complete range of cardigans, sweaters, dresses, trousers and skirts. The collection will initially consist of about fifty items inspired by the work of Art Nouveau artist Alfons Mucha. Specifically, it will feature 3D-effect jacquard fabrics, items blending knitwear and lace jersey, as well as dresses in plumetis tulle jersey and pointillist-style jackets.
The Max Mara group indicated that art will be the creative starting point for this collection, in order to create a fascinating, unique mood.
AIIM will be available at the end of January 2017 in France, Spain, the UK, Italy and Russia, distributed via physical and online multi-brand stores. It will be positioned in the contemporary fashion segment, with an average retail price of €160. At the end of 2017, also AIIM will operate its own e-shop.
The Max Mara group already owns several brands, including Max Mara, Max Mara Weekend, Marina Rinaldi, Marella and Pennyblack.

Pick ‘n Pay fails to comply with clean energy programme

Greenpeace SA has accused retail giant Pick and Pay of failing to comply with its clean energy programme launched three months ago. 
The programme calls on businesses to commit to 100% renewable energy and stop using fossil fuels. 
Activists have staged a protest outside the company’s headquarters in Cape Town.  
Greenpeace says Pick ‘n Pay has the highest electricity consumption of all retailers in the country.  
As part of their protest against the retail giant, activists delivered a solar ring outside the company’s headquarters.
Its crown is made of solar panels. They say it symbolises what they hope will be a lasting bond between the chain store and solar power.  
“We’ve been trying to engage with Pick ‘n Pay but we haven’t seen any changes. We’ve had meetings and nice exchange of words but aren’t showing the kind of commitment to renewable energy that we would really like to see. We are proposing to them that they make a firm commitment to the son and that they commit to a renewable future for their brand,” says activist, Penny-Jane Cooke.
Cooke says the retailer has an ethical obligation towards its millions of supporters that they care about the environment. She says if Pick ‘n Pay takes their suggestions on board, they could save enough energy to power 65 000 homes. 
“We are saying you need to find out how quickly your business can go renewable, and then commit to that and talk about it publicly. You have to have a plan both short and long term as to how you’ll achieve that. So it’s about making your business as efficient as possible. South Africa has been a really energy intensive country in the past – which means that business can make a lot of savings in the future and they need to be really ambitious about those energy savings, and finally what is important for South Africa is lobbying for renewable energy,” says Cooke.  
Greenpeace says converting to solar energy will also create thousands of the much needed jobs in the country.   
Pick ‘n Pay spokesperson Izak Joubert, says they are committed to further talks with Greenpeace.

Chanel opens new store on the Gold Coast, Australia

Chanel has recently opened its first boutique on the Gold Coast (Australia) in the newly renovated Pacific Fair shopping centre on Broadbeach. The store, which is dedicated to beauty and fragrance, is the first in Australia to debut a brand new burgundy interior, with design for the boutique drawing inspiration from the colour palette of the iconic 11.12 bag.

Is Ralph Lauren moving away from luxury?

Ralph Lauren has always been associated with luxury and privilege and it’s polo player logo has been synonymous with dressing elites around the world.

Since the American-based fashion giant announced earlier this month it was to close a significant amount of stores and let go of 1,000 employees there have been plenty of questions as to the brand’s new strategy and direction.
Bottom line sales, specifically a drop in profits, have led Ralph Lauren to restructure its portfolio of labels and bring the company back on course. According to MediaRadar, a multi media sales intelligence tracker, the answer as to the company’s direction can be found in the initiatives of its CEO, Stefan Larsson.
Industry insiders speculate that Larsson’s history at discount retailers Old Navy and H&M are key to understanding its latest moves. MediaRadar analyzed Ralph Lauren’s advertising before and after Larsson’s start data shows two key course changes that shed some light on their new strategic direction:
High end advertising dropped from 55 to 26 percent
First there is a significant move away from luxury. While total marketing investment level didn’t change over one year, there has been a decided move away from supporting their luxury lines. In the first five months of 2015, fully 55 percent of marketing was for Purple Label and Ralph Lauren Collection, the company’s most expensive, most luxurious lines. Just one year later however, that allocation has been slashed to 26 percent. Instead, the lower-priced Polo and eponymous Ralph Lauren lines are the focus. Together they now represent 64 percent of all ads.
The second indication of new strategy is tightening product categories. In the five months from January to May, 2015, Ralph Lauren marketed 29 specific product lines. One year later this list was nearly halved to 14. The brands continuing with the most emphasis are Ralph Lauren, Polo, Lauren, and Denim & Supply. Smaller lines like Chaps and RLX didn’t get marketing support at all.
This data shows a key pivot from the company as the epitome of luxury designer wear to a focus on affordable fashion. For Larsson, this is a turnkey positioning solution, since he helped revitalize H&M and Old Navy to the powerhouse brands they are today.

Japanese retail giant Uniqlo coming to Disney

Japanese specialty apparel retailer Uniqlo is expanding its U.S. presence into the Southeast, and is also expanding its relationship with Disney. 
The company will open a two-level, 25,000-sq.-ft. store on July 15 in Disney Springs at Walt Disney World Resort in Lake Buena Vista, Florida. It will be Uniqlo’s first location in the Southeast. 
The new Uniqlo will incorporate the retailer’s heritage by conveying Japanese tradition, culture and beauty through colorful visuals and displays and Japanese-inspired daily giveaways. There will also be in-store events each week and month like Taiko drummers and a Japanese-style game show.
Last August, Uniqlo announced “Magic For All,” a global initiative with Disney Consumer Products that includes an apparel collection featuring Disney, Pixar, Marvel and “Star Wars” designs. In September, the retailer opened a Magic for All in-store concept shop on the top floor of its five-story flagship in Shanghai as well as themed sections within its flagship stores globally. 
“We are very excited to introduce our Uniqlo products, customer service and shopping experience to Orlando at Walt Disney World Resort,” said Hiroshi Taki, CEO of Uniqlo USA. “We are proud of our collaboration with Disney Consumer Products, and we look forward to offering our unique retail concept and products to vacationers and locals alike at Disney Springs. We hope to make every day at our store feel like opening day for our customers.”
Uniqlo currently operates 43 in the United States.

My Local shuts up to 90 stores as Store Twenty One pursues CVA

Former Morrisons chain My Local has shut nearly 90 stores over the past few days. 

The high street has been hit by fresh wave of job cuts as more than 1,200 shop workers were let go by convenience chain My Local and another 1000 faced uncertainty after fashion chain Store Twenty One said it was trying to fend off store closures by asking landlords to accept lower rents.
My Local, which is expected to go into administration today, has shut nearly 90 stores over the past few days. The closures include branches of the former Morrisons chain in Twickenham, Rochdale, Torquay, Maidstone and Cheltenham, where staff are said to have been laid off without redundancy pay. The remaining 35 stores are thought to have been sold, with the mutual Co-op said to be among the buyers.
The closures come as loss-making chain Store Twenty One, which has 202 UK shops, said it was pursuing a company voluntary arrangement – a type of insolvency proceeding – after eliminating other options including a sale or a debt for equity swap. The retailer, which is owned by Indian textiles company Alok Group, has a chequered financial history and has struggled to adapt as low-cost fashion rivals such as Primark steal the march on a competitive high street.
“We have been working closely with the directors of Store Twenty One for a number of weeks to consider options for the business,” said AlixPartners’ Peter Saville. “After careful consideration the directors have taken today’s decisions as these represent the best option in terms of preserving jobs and value within the group.” The company has placed its property subsidiaries Bewise and QS into administration.
Store Twenty One started in the 1930s as a manufacturing business supplying retailers including Marks & Spencer stores. It subsequently opened its own branches, selling seconds, but in the 80s changed tack, rebranding the chain as QS. In 1990 it floated on the London Stock Exchange and went on to acquire sister chain Bewise. It was taken private in 2002 and sold again, to Alok, five years later. The retailer, which is based in Solihull in the West Midlands, was rebranded again as Store Twenty One nearly a decade ago after a restructuring that involved the closure of 140 shops.
The high street is suffering a fresh shakeout as new brands come to the fore and Britons increasingly shop online. BHS collapsed into administration in April and went into liquidation earlier this month after failing to find a credible buyer, putting 11,000 jobs at risk and leaving a £571m pension deficit. Last month more than 1,000 jobs were lost at Austin Reed after administrators failed to find a buyer for the majority of the 116-year-old tailoring company’s stores.
Accountancy firm KPMG, which has been working with My Local’s management on restructuring options, was lined up on Tuesday afternoon to handle an administration. It is not clear why the formal appointment has not taken place – the notice of intention to appoint provides protection from creditors for 10 days.

Dubai’s Al-Futtaim inks deal to launch French fashion brand

Al-Futtaim, a Dubai-based conglomerate, has signed a partnership agreement with French fashion house ba&sh to introduce the luxury brand to the Middle East.

The first of the planned 10 ba&sh stores will open in Dubai’s City Walk in the fourth quarter of 2016, it said in a statement.
Paul Delaoutre, president Al Futtaim Retail said: “This partnership will add exciting new markets to ba&sh’s global network and at the same time provide Al-Futtaim’s customers in the region with a much wider shopping choice.
“We are confident that this iconic brand will be very popular among the large fashion-conscious clientele in the region and will add to our many success stories.” 
Barbara Boccara and Sharon Krief, co-Founders of ba&sh added: “It is with great pride that we are opening our first store in the UAE. This will be the first boutique in the Middle East and will be the brand’s regional showcase. We are very keen to display our style here.”
Following the opening of the flagship ba&sh store at CityWalk in Q4, there are plans to launch six more boutiques and three concessions in prestigious department stores over the next three years, the statement said.
It added that the brand is expected to expand into several territories within the region by 2019.

BHS eyes store closures and pension fix

Retailer has appointed KPMG to draw up options that will enable the company to drastically reduce its 170-strong store estate

The owners of BHS are planning a radical overhaul of the struggling high street chain that is expected to trigger significant store closures, the restructuring of its massive pension scheme and further job losses.

The management team has appointed KPMG to draw up options that will enable the retailer to drastically reduce its 170-strong store estate, as it wrestles with attempts to turn it around.

The fashion and homeware company lost £85m before tax last year, after Sir Philip Green sold the fashion and homewares chain to a little-known consortium called Retail Acquisitions for £1. 

Since taking over, the new owners have taken a series of measures to slash costs and improve the chain’s strained finances. A £65m loan was raised from specialist lenders Grovepoint Capital and it has raised further cash by leasing the retailer’s flagship Oxford Street store.
Although KPMG has only recently been appointed, it is understood that one route under consideration is a Company Voluntary Arrangement, a scheme whereby landlords are often asked to vote on an offer of reduced rents before the stores eventually close down.
However, other options will be studied including one-to-one negotiations with individual property owners in a bid to slash the rent bill.
BHS wants to get out of at least 30 stores, but the eventual number could be more, it is understood. Retail Acquisitions drew up a list of more than 50 shops that would be placed under review just weeks after taking control in March last year.
Separately, Grant Thornton is attempting to come up with a proposal that will reduce the financial strain of the retailer’s pension scheme.
This could mean scaling back funding, offloading the scheme to a specialist pension buyout vehicle, or even an attempt to hive it off into the Pension Protection Scheme. However, no decision has been made on action to be taken.
BHS’s pension plan has a big deficit. The trustees’ most recent estimate of the shortfall was £207m but it is expected to increase at its next valuation.
In a letter to members of the scheme last March, shortly after BHS was sold, Chris Martin, chairman of the pension trustees admitted that both the company pension scheme and the senior management scheme had “large shortfalls between their assets and the amount they need to pay current and future benefits to all members”.
“The trustees will be discussing, with the new owners of BHS, the level of contributions required to make good these shortfalls and over what period of time those contributions need to be paid.”
“Given the size of the shortfalls, the trustees expect that these discussions may take many months to conclude,” he said.
Attempts to revive BHS have been hit by the withdrawal of credit insurance to its suppliers. Some had to stop trading with the chain after cover was pulled.
A spokesman for Retail Acquisitions said: “BHS has stated publicly many times since the acquisition that it would like to take steps to address a number of unprofitable stores. This may involve discussions with some landlords, and KPMG will help us in this process.”
“We have made no secret of the fact that like other companies we have a pension deficit that we would like to address also and we continue to take advice in relation to this complex area.
“Our turnaround plan is still in its first year. Although we still have a long way to go, we are entirely confident that we will regain our place as an iconic British high street brand.” 

 

Cosmetics maker Revlon to buy Elizabeth Arden in $870 million deal

Cosmetics maker Revlon Inc (REV.N) has agreed to buy Elizabeth Arden Inc (RDEN.O) in an $870 million deal to strengthen its skincare and fragrance business and expand in high-growth markets including the Asia-Pacific region.

Elizabeth Arden’s shares rose nearly 50 percent to $13.96 in extended trading on Thursday, close to the cash offer price of $14 per share. Shares of Revlon, controlled by billionaire Ron Perelman, rose slightly to $31.30.
The deal, which comes less than six months after Perelman said he would seek strategic alternatives for Revlon, will help the companies better compete with deep-pocketed rivals such Estee Lauder Cos Inc (EL.N) and L’Oreal SA (OREP.PA).
The equity value of the deal is $419 million, based on Elizabeth Arden’s outstanding shares as of May 3.
Elizabeth Arden has a strong presence in the luxury skincare market, mainly in the anti-aging category, with brands such as Prevage, Ceramide and SuperStart. Its fragrances include those licensed from celebrities such as Britney Spears, Justin Bieber and Taylor Swift.
Revlon is stronger in hair color and color cosmetics, which are mainly distributed through mass retail channels and beauty salons across 130 countries.
“The combination will leverage Revlon’s scale across major vendors and manufacturing partners, improving distribution and procurement,” the companies said, adding that they expected cost synergies of about $140 million from the deal.
Elizabeth Arden has reported lower-than-expected revenue in six of the past eight quarters as it loses customers to rivals with more exclusive offerings.
BofA Merrill Lynch and Citigroup Global Markets Inc have committed about $2.6 billion to fund the deal and refinance the debt of the two cosmetic makers.
Revlon also said it expected 2016 net sales of $2.0 billion-$2.1 billion on a constant-currency basis, excluding the impact of the acquisition. This implies a “high single-digit growth rate” in net sales, the company said.
Revlon also forecast adjusted earnings before interest, tax, depreciation and amortization of $400 million-$420 million for the year.

Tesco sells Dobbies Garden Centres for £217m

 

Tesco has sold its garden centre chain Dobbies for £217m as the retailer continues with its strategy of focusing on its supermarket business.
Dobbies has been sold to a group of investors led by Midlothian Capital Partners and Hattington Capital.
The sale comes a week after Tesco announced the sale of UK restaurant chain Giraffe and its Turkish business.
Tesco bought Dobbies in 2007 for £150m and it is now the UK’s second largest gardening retailer.
Dobbies – which has its headquarters in Lasswade, near Edinburgh – operates 35 garden centres in Scotland, England and Northern Ireland.
Tesco said that the business contributed £17m to its annual profits last year.
Tesco has embarked on an asset sale programme in recent months, disposing of what it considers to be non-core parts of its business.
In addition to the recent sale of the Giraffe chain and Kipa, Tesco sold its South Korean business, Homeplus, last September for £4.2bn.
The sales are part of attempts by Tesco chief executive Dave Lewis to revive the retail giant’s fortunes.
Announcing the sale of the garden centre business, Mr Lewis said: “Through their hard work and dedication to customer service Dobbies colleagues have built a great business and I would like to thank them for everything they have done.
“It was a difficult decision to sell the business but we believe this agreement will give Dobbies a bright future while allowing our UK retail business to focus on its core strengths.”

South Africa’s Steinhoff buys 23% of Poundland

JOHANNESBURG/LONDON: South Africa’s Steinhoff International Holdings NV has bought 23% of Poundland Group Plc and is considering a full cash bid for the British no-frills homeware chain in its latest attempt to expand in Europe.
Steinhoff, a $22 billion furniture conglomerate which has lost out in two high profile takeover battles already this year, said on Wednesday that it had acquired 22.78% of Poundland, which sells every item at a single price point of £1.
Under British takeover rules, Steinhoff has until July 13 to announce a firm intention to bid for all of Poundland, whose main shareholder had been private equity firm Warburg Pincus LLC, which said on Tuesday it had sold down its 15% stake.
Steinhoff, which has lost out to rivals in two battles for Britain’s Home Retail Group Plc and France’s Darty Plc in the last three months, bought just over £61.2 million Poundland shares, which would be worth around £120 million at the closing price. Poundland has a market capitalisation of around £537 million ($761 million).
Poundland shares closed up 2.2% higher at 200 pence on Wednesday, after rising around 25% on Tuesday.
News of the South African company’s latest move raised questions about its approach to expansion in Europe, where it already runs chains such as white goods retailer Conforama in France and furniture chain Harveys in Britain.
“There’s seem to be no obvious strategic fit but it might just be a matter of adding discounted chains to its stable because that’s essentially what they are: a discount retailer,” said Vestact’s Sasha Naryshkine in Johannesburg.
South African retail mogul Christo Wiese, Steinhoff’s chairman and biggest shareholder, told Reuters he was interested in Poundland because it would be a “good fit” for Steinhoff, adding it had a disciplined approach to acquisitions.
Steinhoff, which sells beds and cupboards to lower-income shoppers in Europe, southern Africa and Asia, is keen to expand further in Europe, where pressure on consumer income has made German’s Aldi the continent’s fastest growing supermarket chain.
Poundland would give Steinhoff a company with more than 900 shops in Britain, Ireland and Spain but also one whose £1 billion annual sales have been under pressure.
Poundland’s 2015 purchase of rival 99p Stores for £55 million has raised questions over its price model.
“Although Steinhoff has a proven track record of integrating businesses and improving their margins over time, we would see this acquisition as higher than average risk given the increasingly crowded UK variety discount space,” said RBC Europe Ltd’s analyst Richard Chamberlain.
Poundland, which competes with B&M, Home Bargains and Wilko and Bargain Buys, told shareholders to take no action, noting that there was no certainty an offer would be made.

Golden Goose opens new store in London

Italian luxury brand Golden Goose has opened its first store in the U.K., located on Dover Street in London’s Mayfair.Spanning two floors, the 950-sq.-ft. space stocks the brand’s women’s and children’s collections, as well as the men’s wear range, Haus by Golden Goose.
The space has a minimalist decor that showcases the brand’s colorful pieces, which include green metallic leather biker jackets, red tulle skirts, glitter brogues and backpacks and a series of the signature low-top sneakers. They come with glitter finishes, studs and oversized crystals for spring- summer 2016.
The U.K. launch follows a series of openings of standalone stores across the globe, including New York, Tokyo, Seoul and Milan. Most recently, the high-end fashion label opened a shop on rue de Saint Peres, on Paris’ Left Bank, as part of its ongoing international expansion strategy.

Wal-Mart Enlists China CEO To Save U.K. Unit

Wal-Mart Stores, Inc. (NYSE: WMT) has replaced its U.K. Asda chain head Andy Clarke with Sean Clarke, who was leading the China unit, the company announced Monday.
Management Changes
Sean Clarke, who started his retail career in the U.K. at Asda back in 1996, will take over Andy Clarke’s position on July 11. S. Clarke’s deputy CEO will be Roger Burnley, who will join Asda from competitor J Sainsbury plc (ADR) (OTC: JSAIY) in October.
“Sean’s leadership will allow Asda to build upon the momentum of Project Renewal and reposition the business in a very competitive market place,” Wal-Mart said in a press release.
Bloomberg reported, “Wal-Mart’s move shows that Andy Clarke is ‘out of the loop’ at Asda, Nick Bubb, an independent retail analyst, said Bloomberg by e-mail. ‘They’ve clearly decided they can’t wait for Burnley to get his feet under the desk to make a move to replace Andy.'”
The report continued, saying A. Clarke’s departure “represents another boardroom victim of the surge of discounters Aldi and Lidl. Within the last two years, all four of Britain’s biggest grocers have changed CEOs amid a price war that’s cut profits across the once-stable industry.”
“People have been calling for Andy Clarke’s head for a long time,” said Richard Clarke, an analyst at Sanford Bernstein told Bloomberg. “As the performance of all of the other U.K. supermarkets has gotten better, Asda’s has gotten worse.”
“Rejoining Asda at such a critical point in the development of the UK retail market is both a challenge and a privilege. After spending the last 15 years in Walmart’s global retail markets, I’m looking forward to returning to the business that got me hooked on grocery retail,” S. Clarke said in a statement.
Other Changes
Wal-Mart has announced Dirk Van den Berghe, the head of Wal-Mart’s Canadian unit, will now lead its China unit effective August 22. He will take on the responsibility of the entire Asia region, while Scott Price, the current head of Asia, will work exclusively as the chief administrative officer of Wal-Mart International.

The Foschini Group has big growth plans

TFG has set itself stiff targets for growth in the five years to March 2021. The retailer is looking to increase sales by 85% to R39bn, to lift operating margin from 17% to as high as 19% and return on equity from 23.9% to 28%-30%.
If TFG achieves its 2021 sales target and a margin of 18% it implies an average annual 14.4% rise in operating profit to just short of double its level in the year to March 2016.
“Barring an economic calamity we view our targets as very attainable,” says TFG financial director Anthony Thunstrom. “They are derived from projections made by each brand and are probably conservative. Targets set over the past eight years have all been exceeded.”
TFG showed its form in its latest year, lifting headline EPS (HEPS) 17.6%. It put TFG marginally ahead of Mr Price, which reported a 17.1% HEPS rise over the same period.
For TFG, its past year was one of bedding down UK-based fashion retailer Phase 8 (acquired for £140m in January 2015).
“Integration is the make or break of an acquisition,” says Thunstrom. “Phase 8’s management has done everything we asked them to do. The integration could not have gone more smoothly.”
While Phase 8 contributed R3.6bn (17%) to group retail sales of R21.1bn, its contribution to HEPS growth was minimal.
“We expected to only break even in the first year,” says Thunstrom. “Phase 8 turned out to be mildly earnings accretive.”
TFG has big plans for Phase 8, which has 542 stores and concessions in department stores in 21 countries.
Targeted for 2021 are 820 outlets excluding those of Whistles, a UK-based high-end fashion retailer with 121 outlets, acquired by Phase 8 in March for £4.6m. Thunstrom sees Whistles as a brand with long legs.
“It is an aspirational brand with a far higher market profile in the UK than Phase 8,” he says. “Before we disclosed its purchase price many people thought we had paid R1bn. It shows how big its brand equity is.”
TFG intends running with that brand equity.
“We know all the department store groups and countries we can take Whistles into,” says Thunstrom.
Big growth plans are also in place in SA, where TFG wants to grow the 2,286-store footprint of its 20 brands to 3,090 by 2021.
Independent retail analyst Syd Vianello says: “They have too many brands to manage them all effectively.”
Thunstrom disagrees. “Our brand diversity gives us flexibility,” he says. “We can put as many as 15 brands into a mall and often do.”
It will, arguably, not be brand diversity that counts in a constrained SA market. It will be success in attracting cash customers at a time when the ability to extend credit has been curtailed by recently introduced affordability regulations.
“With reduced access to credit, consumers are turning to cash purchases and even lay-by,” says Thunstrom.
“Cash customers can spend anywhere they want to. It is all about gaining cash market share, which we are doing.”
In its latest financial year TFG upped SA cash sales by a hefty 18.4% to take them to 48.3% of total sales. TFG’s cash sales growth was double Mr Price’s 9.1% cash sales growth.
Truworths is also pushing cash sales. Excluding its recent UK acquisition, Office Retail, cash sales lifted by 16% in its half year to December. But they did so off a low base, cash sales remaining a modest 29% of total SA sales.
As matters stand TFG is something of an underdog, rated on a 13.9 p:e against Truworths’ 14.7 p:e and Mr Price’s generous 18.9 p:e. TFG’s management will be out to prove the market wrong. They stand a strong chance of doing just that.

The 10 most valuable brands in the world

Google has overtaken Apple to become the “most valuable global brand” this year, according to brand consultancy Millward Brown’s annual BrandZ rankings.

Just like last year, technology brands dominated the top 10.
These are the top 10 most valuable brands in the world and an analysis of what happened over the last 12 months to shift those companies into their respective rankings.
 
10. IBM
Brand value: $86.2 billion
Percentage change from last year: -8%
Last year’s rank: 4
What happened: Millward Brown says that IBM is “investing in its future,” particularly with its cognitive-computing system Watson, which is working across areas such as advertising, healthcare, education, and retail.
The company has also quietly built the world’s largest digital agency: IBM iX.
Millward Brown doesn’t give a reason why IBM’s brand value dropped from the previous year, but it is probably IBM’s move away from consumer products that has seen the company drop down the rankings.
 

9. McDonald’s
Percentage change from last year: +9%
Last year’s rank: 9
What happened: Millward Brown says that McDonald’s has made a number of improvements to the business this year.
It is making efforts to separate its drive-thru offerings — based on convenience and speed — from its in-store experience, where it has been rolling out customization, premium products, and improving hospitality.
Meanwhile, Millward Brown also notes the success of its healthier and lifestyle-focused McCafe offerings.
 
8. Verizon
Brand value: $93.2 billion
Percentage change from last year: +8%
Last year’s rank: 7
What happened: Millward Brown says that Verizon is another company that is investing in its future.
Verizon has expanded its business into the digital and video content and advertising markets, thanks to the $4.4 billion acquisition of AOL in May 2015. It also launched its Go90 mobile video-streaming app in October 2015.
 
7. Amazon
Brand value: $98.9 billion
Percentage change from last year:+59%
Last year’s rank: 14
What happened: Amazon was the fastest riser in this year’s rankings.
Millward Brown said that Amazon is constantly disrupting other sectors by creating new industry standards — everything from one-hour delivery time and its own proprietary entertainment content to the testing of delivery drones and its Echo personal assistant.
 
6. Visa
Justin Sullivan/Getty Images

Brand value: $100.8 billion
Percentage change from last year:+10%
Last year’s rank: 5
What happened: Visa is the only financial brand in the top 10 this year.
The company is a big sponsor of sporting events, and its blue, white, and yellow logo is ubiquitous in retailers across the world.
Last year, Visa, a FIFA sponsor, came out strongly against the corruption scandal at world football’s governing body. The company is continuing its partnership with FIFA and also the NFL and the Olympics.
 
5. Facebook
Brand value: $102.6 billion
Percentage change from last year:+44%
Last year’s rank: 12
What happened: Facebook continued its strong financial performance in 2015, and the company has been working to transform itself into a media platform, encouraging publishers to post original content —particularly video — to its site.
Millward Brown also credits Facebook’s long-term vision in areas such as virtual reality, artificial intelligence, and connecting the parts of the world that are not yet on the internet for the increase in its overall brand value this year.
 
4. AT&T
Brand value: $107.4 billion
Percentage change from last year:+20%
Last year’s rank: 6
What happened: AT&T is the second telecoms company in the top 10.
Millward Brown suggests that one of the reasons AT&T outperformed its competitors was the quad-play — mobile, fixed-line, internet, and TV — bundle it offers, through the acquisition of DirecTV.
The research company also notes that AT&T formed connected car partnerships with automakers, including Ford, BMW, and Tesla.
 
3. Microsoft
Brand value: $121.8 billion
Percentage change from last year: +5%
Last year’s rank: 3
What happened: Microsoft is the world’s most valuable B2B brand, according to Millward Brown.
The company has seen “exponential growth” in its commercial-cloud business — which has mostly been driven by its Office 365 programs — and Windows 10 is now active on more than 270 million devices worldwide.
In order to keep laser-focused, the company has streamlined its smartphone hardware business.
 
2. Apple
Brand value: $228.5 billion
Percentage change from last year: -8%
Last year’s rank: 1
What happened: Millward Brown said that Apple’s lack of big new products launching this year affected its brand value.
The company did launch the Apple Watch in April, but that hasn’t yet reached mainstream appeal — despite selling more units than its other smartwatch competitors.
But Millward Brown says that Apple’s move to invest in Didi Chuxing in China has shown how “Apple has progressively moved to building an ecosystem served not only by gadgets, but also services.”
Another big service launch was Apple Music, which rolled out last summer.
 
1. Google
Brand value: $229.2 billion
Percentage change from last year:+32%
Last year’s rank: 2
What happened: Millward Brown says that “Google has thrived thanks to continual innovation, increased revenue from advertising, and growth in its cloud business.”
Google has also been “very transparent about what it’s working on,” which boosted its brand value, Millward Brown added.
Google officially restructured its business under new holding company Alphabet in October, which allows its separate businesses to operate independently and move faster.

Burberry’s Chief Operating Officer to depart amidst trading slowdown

British fashion house Burberry has announced the resignation of its Chief Operating Officer John Smith after serving seven years at company.
Smith will leave Burberry and depart from the board by summer 2017.
The announcement comes as the luxury brand faces pressures to strengthen its senior management team amid poor trading figures. Investors have voiced concerns that Chief Executive and Chief Creative Officer Christopher Bailey is struggling to manage his dual role.
“With the company’s future strategies now in place, I am ready to embark on a new challenge. Having been the CEO of a fast growing international business in the past, I am exploring a number of exciting new leadership opportunities in that arena” Smith said.
“We would like to thank John for his contribution to Burberry over the last seven years, first as a non-executive director and latterly as chief operating officer, and in particular, for his success in driving digital growth and optimising the potential of our beauty and travel businesses. John has been an important contributor to the company’s success and we wish him well in the future” added Burberry Chairman Sir John Peace.
Burberry noted that its full year profits are likely to be at the bottom of market forecasts to the year ending March 2017 as a result of investment in staff training and IT and a significant slowdown in its Chinese business.

Chanel opens in Vancouver largest retail space in Canada

CHANEL has opened a large ground-level boutique inside of Vancouver’s Holt Renfrew at CF Pacific Centre, replacing a previous location on the women’s upper-level designer floor.

Although a shop-in-shop, Vancouver’s new Chanel concession is now Canada’s second-largest location, featuring the country’s first Chanel fine jewellery and watch boutique. The boutique also features ready-to-wear, handbags, shoes, accessories eyewear.

The new Chanel concession measures about 5,060 square feet, and includes a separate 750 square foot area dedicated to fine jewellery and timepieces.

Clicks to manage Netcare’s Medicross pharmacies

RETAILER Clicks will takeover managing private hospital group Netcare’s 37 Medicross branded retail pharmacies and its 51 hospital “front shops”, the two JSE-listed groups said in a joint-statement on Wednesday.
The agreement excludes the dispensing of prescriptions in the Netcare Hospital pharmacies, which remain within Netcare’s hospital operations.
Specific employees involved in these areas of the business will be transferred to Clicks on terms similar to their current conditions of employment and any other employees indirectly affected will remain employed by Netcare on their current conditions of employment, the two groups said in the joint statement from the JSE-listed companies said.
“The rationale for the transaction is to offer an enhanced retail service offering to both patients and consumers by affiliating the pharmacy and the front shops to an experienced retail provider such as Clicks,” Netcare said.
The parties expected to conclude the deal on October 1. It needs to gain competition authority approval, but falls below the JSE’s threshold for categorised transaction.
“Requirements for Netcare and Clicks and will have no material impact on the earnings and financial positions of either Netcare or Clicks,” the groups said in the joint statement said.

Harry Ramsden Owner Snaps Up Tesco’s Giraffe

The tycoon who owns the Harry Ramsden’s restaurants will add to his portfolio of casual dining chains this week by snapping up Giraffe from the UK’s biggest retailer.
Sky News understands that Boparan Ventures, the private investment vehicle of Ranjit Boparan, a wealthy entrepreneur, is the mystery buyer who has agreed to acquire Giraffe from Tesco (Xetra: 852647 – news) .
The deal is expected to be announced on Thursday.
Boparan Ventures, which also owns Fishworks, a London-based chain, is understood to be paying Tesco a modest sum for Giraffe, which was loss-making last year.
Boparan also owns the upmarket Indian restaurant in London’s Westminster, The Cinnamon Club.
Mr Boparan is best-known as the controlling shareholder of 2 Sisters Food Group, which is Britain’s biggest chicken supplier and the owner of Goodfella’s Pizzas.
The announcement of Boparan Ventures’ takeover of Giraffe is understood to be planned alongside the sale of Tesco’s interests in Turkey, revealed by Sky News on Tuesday.
The grocer’s disposal of Kipa will mark a further stage in its international retrenchment following the sale or closure of its operations in China, South Korea and the US.
Migros, another Turkish-owned retailer, is said to be the buyer of Kipa, which Tesco acquired in 2003.
While they will represent another important step in Mr Lewis’s efforts to tidy up Tesco’s sprawling portfolio of businesses, they will not be material from a financial perspective, insiders said.
Tesco is likely to sell the Turkish business for “a couple of hundred million pounds”, one analyst suggested on Tuesday night, while Giraffe would be “all but given away”.
Many of the assets being sold by Dave Lewis, Tesco’s chief executive, were acquired by his two most recent predecessors: Sir Terry Leahy and Philip Clarke, who wanted to diversify the retailer’s appeal and geographical reach in an attempt to emulate global peers such as Wal-Mart.
Tesco’s other international operations, in markets such as Hungary, Poland and Thailand, are not on the auction block.
Giraffe was bought by Tesco from a private equity firm headed by Luke Johnson, arguably Britain’s most successful restaurant investor.
Mr Lewis also wants to sell peripheral businesses including Harris (Stuttgart: HRS.SG – news) + Hoole, the chain of coffee shops, and Dobbies, the garden centres business.

Ralph Lauren to Slash 1,000 Jobs, Shutter Stores

Designer Ralph Lauren, right, poses in his office with Stefan Larsson, global brand president for Old Navy, Tuesday, Sept. 29, 2015, in New York. Lauren is stepping down as CEO of the fashion and home decor empire that he founded nearly 50 years ago, and Larsson, who has been the global president of Old Navy for three years, will succeed him. 

Ralph Lauren unveiled plans to cut jobs and close stores as the luxury brand struggles with a prolonged period of weak sales. The apparel maker and retailer also disclosed sales targets for the year that missed Wall Street’s expectations, news that sent shares lower on Tuesday.
The company said it would book charges of up to $400 million, with a bulk of those expenses tied to lease terminations, store closure costs and severance expenses. Under the plan, Ralph Lauren RL -1.68% said it would also simplify the company’s leadership by moving from an average of nine layers of management to six. While Ralph Lauren didn’t disclose specifics, the company told The Wall Street Journal that it would close 50 stores and cut 1,000 jobs, or 8% of the full-time workforce.
“We have to evolve,” new CEO Stefan Larsson said in a presentation to investors Tuesday. “We have to cater to the life and style that people dream of today.”
Ralph Lauren also projected fiscal-year net revenue would post low double-digit declines, citing store closures and a weak retail environment in the U.S. Analysts had projected a far more modest 4% decline. First-quarter sales are also expected to be soft.

Luxury handbag maker Radley sold to owners of C&A

Sold: Radley started out as a stall selling handbags at Camden market

Sold: Radley started out as a stall selling handbags at Camden market

It started out as a stall selling handbags at Camden market but yesterday luxury label Radley was sold to the billionaire owners of retail chain C&A.
Famous for its West- Highland terrier motif, the firm was sold by private equity firm Exponent for an undisclosed sum. 
Radley’s Australian- born founder Lowell Harder is in line for another windfall from selling more of what remains of her stake.
Once described as a bags-to-riches queen, the former architect set up the business in 1984. 
At 33 and a mother to three young boys, she decided she needed a different direction in her life.
Her bohemian cousin had just returned from a trip to India with some leather bags and Harder was impressed by the unique designs. 
She contacted the manufacturer in India and arranged to have her own bags made and imported to London.
She started trading on a Camden market stall under the name Hidesign.
Today the business has 33 stores and counts Pippa Middleton as a customer.

Ramadan Kareem 

Wishing all our readers a blessed Ramadan Kareem 

Majid Al Futtaim unveils mega plan for Dh30bn of UAE investment

Most of the Dh30 billion of investments in the UAE announced yesterday by Majid Al Futtaim is likely to be in place by the time Dubai’s Expo 2020 takes place, says the company’s chief executive, Alain Bejjani.
The Dubai-based group revealed plans to open 10 new City Centre malls, six hotels, 28 cinemas, 40 Carrefour supermarkets and a 740,000 square metre master planned community over the next 10 years, in a move that will generate about 170,000 direct and indirect jobs.
Yet Mr Bejjani said all but one of its mall projects would start on site either this year or next.
“We did not include in this Dh30bn strategy anything where we didn’t have the land acquired and plans in progress,” he said.
The projects announced include 10 malls being developed under its City Centre brand, a new super-regional mall in Sharjah at its Al Zahia master planned community and its first foray into Abu Dhabi retail through a smaller My City Centre mall at Masdar City.
The investment also includes plans to refurbish and extend existing properties. City Centre Me’aisem and City Centre Ajman are being extended, and more refurbishment at Mall of the Emirates, where upgrades will be carried out to areas around Rodeo Drive and Ski Dubai.
The six new hotels will include a luxury property at Mall of the Emirates, two hotels at Mirdif City Centre, one at Deira City Centre and two at the new Al ­Zahia mall in Sharjah.
Hotels, retail and leisure are also proposed for the new master planned community, which is being built at a plot on Sheikh Mohammed bin Zayed City, close to the Global Village complex. However, this is a project that may take slightly longer to bring forwards, Mr Bejjani said.
“We’ve just acquired the land. We didn’t do this announcement until we acquired the land because it’s very important for us that every component of this Dh30bn is clearly identified,” he said. “We have a pre-concept plan, then we are going to move ahead with approvals.”
Mr Bejjani declined to give details of how it would finance its Dh30bn investment, apart from stating that it was committed to maintaining its current BBB credit rating. “Our plans are well thought, well funded and we will take advantage of any opportunities in the market,” he said.
Last week, Dubai was ranked by the consultancy JLL as the fourth-most attractive market in the world for retailers, behind London, Hong Kong and Paris. Abu Dhabi was ranked 11th globally.
JLL said that Dubai already has one of the highest per-capita levels of retail space in the world, as it has developed a reputation as a shopping tourism destination.
The company’s Mena head of retail, Andrew Williamson, said: “As Dubai looks to welcome 20 million visitors by 2020, retail will play a crucial role in drawing in visitors from all over the globe.”
Majid Al Futtaim said that its plans will double the amount of retail space it has in its malls from 725,000 sq metres to 1.5 million sq metres. Emaar Malls has about 540,000 sq metres of retail space in its portfolio, including The Dubai Mall, but parent firm Emaar Properties has plans to develop 11.16 million sq metres of retail within the new Dubai Creek Harbour project.
Mr Bejjani said he was not concerned about overcapacity in the market, citing growing population and tourism numbers.
“There are very clear growth trends in the market that we are going to take advantage of, but quality is important and experience is important. Majid Al Futtaim is the best developer within all of our businesses. We are very confident of our offering,” he said.

BHS creditors wiped and 1,000 jobs to go as Sir Philip Green gets £35m

The demise of BHS means that the taxpayer will have to foot the bill for the redundancy payments

Additionally, the demise of BHS means that the taxpayer will have to foot the bill for the redundancy payments of thousands of its staff.
The department store chain employed 11,000 and is the biggest high-street casualty since Woolworths in late 2008.
Former owner Green is owed £35 million by BHS, while Barclays, Gordon Brothers and Grovepoint Capital are together owed £60million by the firm.
As secured creditors, the four have first claim to any monies recovered by administrators Duff & Phelps.
The 3,460-plus unsecured creditors of BHS are collectively owed £100million and insolvency sources warn that hardly anything will be left for them, once the secured creditors have been paid.
One leading insolvency practitioner said: “Green, Barclays, Gordon Brothers and Grovepoint will get the first chunk of any recoveries and by the time you have paid the administrators, property agents and so on, the unsecured creditors will have been wiped out.”
On Thursday Duff & Phelps announced it would start winding down BHS after failing to find a suitor with what it believed to be a viable, fully-funded plan to save the business.
Although it had wanted to keep BHS intact, none of its would-be saviours were keen to do so.
To raise money for creditors, Duff & Phelps will sell off all of BHS’s property and assets, including its brand.
The department store chain employed 11,000 and is the biggest high-street casualty since Woolworths

BHS was acquired by Green in 2000
The likes of Next, Primark and Sports Direct have been touted as possible buyers for parts of the estate.
Green said he was “saddened and disappointed” by the failure of BHS, while the man he sold it to for £1 in 2015, Dominic Chappell, reportedly said that he was “deeply sorry”.
On Wednesday, Chappell will appear at Parliament to face a joint Business and Work and Pensions Select Committee investigation into the collapse of BHS.
It is understood that the committee members will question Chappell’s fitness as a company owner and director.
They will also ask him to explain why he loaded high interest loans on to BHS and why it had lent £1.5million to a firm linked to his father, cash that was used to pay off his mortgage.

Sir Philip Green could recoup up to £35million from the collapse of BHS
On Thursday Duff & Phelps announced it would start winding down BHS

BHS was acquired by Green in 2000.
The retail mogul has been heavily criticised for taking out £400million in dividend payments from it while he was owner, as the final salary pension scheme has a £571million deficit.
Additionally, it is understood that the financial assessors working for the Parliamentary investigation will criticise Lord Grabiner’s performance as chairman of Arcadia, Green’s retail fashion empire and former parent company of BHS.
They are expected to say he was “less than effective” as chairman, a post he held from 2002 to 2015.
In correspondence to the investigation, Grabiner admitted he was not even at the meeting where the sale of BHS by Arcadia to Chappell was discussed.

Mr Price raises sales amid weak economy

Johannesburg – Mr Price said yesterday that its sales exceeded R20 billion and earnings exceeded R10 a share for the first time since the group’s inception. 
Chief executive Stuart Bird said the figure represented an important milestone for the company.
“We are very satisfied with these results, particularly after considering the headwinds that we confronted in terms of the subdued economy, changes in credit legislation, challenges in key African economies and the high base in our main apparel division,” said Bird.
The group’s diluted headline earnings a share rose 17.1 percent to 1 012.9 cents in the year to April.

The group reported that total revenue had grown by 8.4 percent to R19.6bn, with retail sales increasing by 8 percent to R18.7bn.
Bird said operating profit in the South African market grew 20.8 percent to absorb the impact of underperforming and new businesses.
He said cash sales came in 9.2 percent higher, while credit growth of 2.3 percent was inhibited by the introduction of new credit regulations last September, which slowed new account growth.
Bigger dividend

The group declared a final gross cash dividend of 419c a share – a 13.7 percent increase compared with the last period but said the final dividend was lower than headline earnings growth due to the increase in the dividend payout ratio at the interim stage.
Profit from operating activities rose 17.1 percent to R3.6bn, up from R3.1bn, while profit attributable to equity holders of parent entity was 15.4 percent higher at R2.6bn.
It said retail selling price inflation was 7 percent and unit sales were up by 1 percent to 231.1 million.

Bird said the group opened 45 new stores during the period under review and expanded 26 others to grow its store space.
But he warned that the consumer environment would remain depressed in the next financial year.

“A weak exchange rate impacts all apparel retailers and higher product inflation in the first half is expected to impact unit growth.
As a value retailer, our prices will rise less, so comparatively speaking, we are well-positioned,” he said.
The group said that despite exchange rate weakness and volatility, the merchandise gross profit percentage was held in line with last year at 41.9 percent.
The cellular gross margin, which had a higher contribution to group gross profit than previously, rose to 6.4 percent, mainly due to critical mass being achieved in MRP Mobile.
Other stores

There were declines experienced in some of the stores, such as Miladys, which reported a decrease in sales of 1.9 percent to R1.4bn.
MRP Home, which targets higher-income customers, delivered results that were well ahead of budget and the prior period, despite muted sales growth of 5.9 percent.
Sheet Street’s sales grew by 5.3 percent to R1.4bn.
Local online sales grew by 63.6 percent.
Bird said MRP Home would open a test store in Australia in October.
“The company’s strong cash generation and healthy balance sheet have easily absorbed the impact of these investments, which are important platforms for expansion,” Bird said.

UK retailer BHS to shut with loss of up to 11,000 jobs

LONDON: British department store chain BHS is to close with the loss of up to 11,000 jobs, administrators said Thursday after failing to find a buyer.
BHS, which sells clothing, food and homeware, has failed to keep pace with traditional rivals such as Marks & Spencer and online giants like Amazon, resulting in a major loss of market share.
“Philip Duffy and Benjamin Wiles, managing directors of Duff & Phelps (the administrators) have today announced the orderly wind down of the BHS business,” a statement said.
The 88-year-old company’s 163 stores will enter “close-down sale mode” over the coming weeks following failed last-ditch rescue attempts by former Mothercare boss Greg Tufnell and Mike Ashley’s Sports Direct.
A total of 11,000 jobs are in peril, comprising 8,000 BHS employees who are “likely to go”, with another 3,000 non-BHS staff also at risk.
“Despite the considerable efforts of the administrators and BHS senior management it has not been possible to agree a sale of the business,” the statement added.
“Although multiple offers were received, none were able to complete a deal due the working capital required to secure the future of the company.
“Our thoughts today are with the employees. We thank them for their professionalism and hard work. We would also like to thank the great British public for helping us in our efforts to save BHS resulting in several weeks of significant sales.”
BHS had called in outside help last month in order to help rescue the struggling firm from potential closure.
Pension fears
However, Duff & Phelps was unable to turn around the fortunes of the faltering retail giant.
“The British high street is changing and in these turbulent times for retailers, BHS has fallen as another victim of the seismic shifts we are seeing,” said Philip Duffy, managing director of Duff & Phelps.
“The tireless work and goodwill of the existing management team and employees of BHS with the support of my team were not enough to change the fortunes of the company.”
According to retail consultancy Conlumino, BHS attracted some 13.4% of all British clothing shoppers through its doors fifteen years ago, and had about 2.3% of the clothing market.
Last year however, BHS pulled in just 8.2% of clothing shoppers, handing it a 1.4% share of the sector.
BHS has debts totalling more than £1.3bil (RM7.8bil), including a £571mil (RM3.4bil) deficit to its pension fund, which looks after the nest eggs of over 20,000 savers.
The collapse has shone the spotlight on previous owner Philip Green, the Top Shop tycoon.
MPs are set to question him about a £400mil (RM2.4bil) dividend paid to his family from the business, which he sold last year to Retail Acquisitions for a token 1.
He also faces questions about the pension scheme, which boasted a surplus when he took over 16 years ago. 
Starting in 1928 with a chain in London, BHS has since grown to stand at 163 stores and 74 franchise operations across 18 countries. – AFP

BHS ex-owner blames Philip Green for retail firm’s collapse

Dominic Chappell, the owner of BHS at the time it fell into administration, has blamed former owner Sir Philip Green for the retail chain’s demise.
Chappell said Green had failed to deliver on a pledge to ensure the backing of credit insurers and had not left sufficient cash in the business.
“Philip Green never stood good for his word,” Chappell told the Guardian. “We worked so hard. It was Philip Green’s interfering and breaking of his word that caused this to happen.”
Out of more than £60m of cash left on the balance sheet by Green, the Topshop owner who sold BHS for £1 to Chappell’s Retail Acquisitions just over a year ago, Chappell said he had been forced to pay out more than £20m as upfront guarantees to keep key suppliers on board.
He admitted Green had not given a written guarantee that he could secure credit insurance but claimed it had been verbally promised.
More than £20m of other funds had gone to pay VAT, wages and rent, according to Chappell, so that the business had been forced to borrow money from property investors the Dellal family at expensive rates to keep BHS trading.
The Dellals’ Allied Commercial Exporters (Ace) provided Chappell with £35m in cash needed to demonstrate to Green’s Arcadia group that he was a credible buyer for BHS, then made millions of pounds from a series of property deals and loan agreements with the retailer.
Chappell, who is due to appear before a parliamentary inquiry into the demise of BHS next week, said the Dellal family were not linked to the business’s problems. He pointed the finger at Green and blamed BHS’s management team, led by Darren Topp, for taking £40m less than expected over the eight-week Christmas period.
“We were very unlucky and Philip Green knocked us over,” Chappell said.
However, Paul Budge, finance director of Green’s Arcadia group, said the company had left more than £90m of cash and debt facilities in BHS for Chappell, as well as providing more than £100m of guarantees on loans and leaving more than £100m of property assets in the retailer.
“We could not have given Retail Acquisitions more help or assistance or support to try and make this business work,” Budge said. “There were probably multiple reasons why it didn’t work but it certainly wasn’t through lack of our help.”
BHS had expenses of less than £80m during the month after the deal but would have received receipts of £55m, leaving an outflow of approximately £25m, which could have been financed from cash in the business and property receipts.