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Retail Therapy: North Star is back!
Several weeks ago I received a care package wrapped in Kraft paper and tied with twine. It contained packs of retro candy: McGraw's taffy, Pop Rocks, some Big League Chew. There was also a VHS tape of Meatballs peeking out from a heather grey North Star hoody that had my name written in the collar, on an iron-on laundry tag. It made me nostalgic for the outdoorsy summer camps I never went to and the crappy movie I love but was too young to have seen when it came out (I was all of six years old).
North Star was launched in Canada in the 1970s by the Bata Corp., and I remember my aunts and uncle wearing the brand, slinking off with their friends to get up to grown-up teenager things that, while mysterious, still seemed very desirable to me at the time. The label hit its height of popularity in the late 1970s and early 1980s — hence the 1979 Bill Murray comedy classic, coincidentally set at the shabby Camp North Star.
Beyond the hoody, North Star's most recognizable brand identifier is back, too: the jagged yellow-striped royal blue Jogger (code name: Design 38), a sneaker style ubiquitous at the time of its heyday.
The revival also includes a capsule summer collection designed by Canadian-born, L.A.-based artist Geoff McFetridge, whose multimedia work includes the opening credits of Adaptation and The Virgin Suicides, as well as projects for clients from Stüssy to Nike.
And here's another Canadiana part of the story: Like Meatballs, in another (sadly) retro manufacturing move, all the apparel is Canadian-made. (The movie was directed by Canadian Ivan Reitman and to date remains the only feature ever filmed at Camps Towhee and White Pine in Haliburton, Ont.)
Tesco announces board change
Tesco PLC announces that Dame Lucy Neville-Rolfe CMG, the Executive Director responsible for Corporate and Legal Affairs, will retire on her 60th birthday on 2 January 2013.
Chief Executive Philip Clarke said: "During her period at Tesco Lucy has transformed the professionalism of the corporate affairs function at Tesco as well as, on the legal side, leading for the company on 3 major competition enquiries.
Lucy has always shown unrelenting determination and great finesse and Tesco is indebted to her for many outstanding achievements, not least for leaving behind her a strong team. Our position, both at home and overseas, is undoubtedly much better as a consequence. We will miss her wise counsel when she retires in six months' time".
Lucy said: "I have had a fascinating career at Tesco and have greatly enjoyed representing our interests around the world and building a great team. The company has grown enormously in size and profits since I joined and I am proud that, with many others, I have contributed to its success."
Lucy's responsibilities will be divided between Adrian Morris, who will join from BP as Group General Counsel on 3 September and Rebecca Shelley, who joined the Group from Brunswick on 1 May and will take responsibility for Corporate Affairs. Both will join the Group Executive Committee chaired by Philip Clarke.
Dame Lucy joined Tesco as Director of Corporate Affairs in 1997 from the senior civil service (including a period in Downing Street) and was appointed Company Secretary of Tesco PLC in 2004. In 2006 she was appointed to her present position on the PLC Board.
Dame Lucy is Deputy Chair of the British Retail Consortium and a Non-Executive Director of ITV plc and of the Carbon Trust. She is also a member of the London Business School's Governing Body, the China Britain Business Council, the UK India Business Council and the Corporate Leaders' Group on Climate Change. On 1 July she will become Non-Executive President of EuroCommerce, the European trade association for retail, wholesale and international trade.
Dame Lucy was this month appointed DBE in Her Majesty the Queen's Birthday Honours.
It's chocs away as Thorntons sets sights on global revival
DERBYSHIRE chocolate maker Thorntons has revealed plans to take on the world in an effort to turn around its fortunes.
The Somercotes-based firm is hoping that expansion into overseas markets will help offset struggling sales at its UK stores.
Derbyshire chocolate maker Thorntons has revealed plans to take on the world
The business, which has more than 500 stores nationwide, including its franchised outlets, is working with government-backed organisation UK Trade and Investment (UKTI), which helps British firms looking to export.
The company already does a certain amount of exporting to countries including South Africa, Dubai and Australia.
But Thorntons is now looking to build on this and, with the help of UKTI, export its goods to more countries across the world.
This week, the company has been sharing its export plans with Trade and Investment Minister Lord Green, who visited the company's Thornton Park factory.
He met the company's chief executive, Jonathan Hart, and his senior team to talk about how UKTI might help Thorntons break into new markets.
Mr Hart said, while the firm's UK retail business remained the key focus, the company wanted to grow its international presence.
He said: "We are in the process of developing our international strategy and have spent time investigating various international markets where we think the Thorntons brand can thrive and there is a real demand for great British chocolate.
"It was great to have the opportunity to meet with Lord Green and to discuss the support his department can offer us to ensure any overseas ventures we do undertake are a success."
Lord Green said: "I'm pleased to have been able to find out more about what's happening at Thorntons, its positive plans to increase exports and how advisers from the UKTI local team are helping support the company at a challenging time."
In recent times, Thorntons has seen growth in commercial sales, through supermarkets and products sold via the internet.
But its latest figures show sales at the confectioner's own stores fell by 1.6% over the 16 weeks to April 28.
Overall, it is forecast to make a full-year loss of £2.4 million.
During his visit to the region, Lord Green also met one of the local winners of the latest Queen's Awards for International Trade, Richard Dorf, managing director at Pride Park-based Pxtech.
Lord Green said: "Turning around the UK's trade deficit is not going to happen overnight, it's going to take years.
"It's a marathon, not a sprint – but it's a marathon we can complete."
Peter Hogarth, regional director of the UKTI, who accompanied Lord Green on his visit to Derbyshire, commented: "The minister's visit came on the back of news that East Midlands exports hit £4.6 billion for the first three months of 2012 and the region is back in the black, having exported more goods than we imported in the last six months for the first time since 2006."
M&S to Expand Into China
The British favourite, retailer Marks & Spencer, has had its decision to expand into China welcomed by British expats living in the Middle Kingdom. It has so far taken four years for M&S to open just eight outlets in the country, however, the chain has now announced that it plans to double this number in the next 12 months.
Marks & Spencer has recently suffered subdued sales in its UK market, following the much-discussed double-dip recession. Profits in Europe have also fallen short of predictions, with the eurozone crisis hitting the retailer hard.
As reported by The Telegraph, however, a British software designer working in Shanghai, Mark Andress, said that "We now have quite a lot of familiar UK names in the shopping districts. Retailers are no longer dipping their toes in the water but are aggressively expanding across China as part of a long-term commitment."
Despite the welcome by British expats, local residents may prove to be a tougher consumer to crack. James Roy, a senior analyst at a Shanghai-based China Market Research Group, said that "In China so far Marks & Spencer's clothing lines have not been much of a departure from what they offer in the UK or in Hong Kong. The styles are mostly the same and this becomes an issue, because when young Chinese consumers look at their clothes they think they're for middle-aged men and women in their late 40s and 50s."
One British expat also claimed that "The problem is that middle classes don't really exist in China. Anyone who would typically fall into this category doesn't want to stay here but wants to move up the social ladder and become very wealthy. Then they want designer labels."
Despite this warning, there are a number of well known retail names vying for position in the Chinese market, including H&M, Zara, and the Japanese brand Uniqlo.
It was in 2008 that M&S opened its first Chinese store in Shanghai. At the time, the company believed China to be a profitable market. However, critics have claimed that the chain's basic products did not appeal to locals, and that clothes sizes were too large. It remains to be seen whether or not the aggressive expansion into the market that has just been announced, will prove to be more of a benefit or a hindrance to one of the UK's best-loved retail names.
Billabong Takeover Talk Reignites
Billabong International Ltd. is once again the focus of takeover speculation, attracting possibly the attention of Nike and TPG Capital.
Officials at TPG in the U.S. and Australia declined comment, and their counterpart in Australia could not be reached for comment by press time. Nike Inc. officials also did not return a request for comment.
There's speculation that other private equity firms might start to eye the surf brand, as well as some strategic players such as PPR. The PPR speculation stems from its purchase last year of skate and snowboarding retail chain Volcom for $607.5 million, which competes in the same market as Billabong. In addition, PPR also owns 71 percent of the German sports brand Puma.
Troubles began surfacing for Billabong last week when it issued a profit warning for the year ending June 30. The company said it expects earnings to come in at 130 million to 135 million Australian dollars, or $130.5 million to $135.5 million. That compares with an earlier forecast of 157 million Australian dollars, or $158 million. All conversions to U.S. dollars are at current exchange.
Billabong last week also sold 221 million new shares and raised 225 million Australian dollars, or $225.81 million, but at a discounted price as some institutional investors began questioning the firm's focus. By the time trading resumed on Monday, the Gold Coast, Queensland-based surfwear firm's share price dropped as much as 50 percent to a record low of 92.5 Australian cents or 93 cents. The drop wiped out more than 200 million Australian dollars, or about $200 million, of the company's capitalization and ignited talk that the company could become a takeover target.
The share price on Tuesday recovered by more than 5
percent after founder and non-executive director Gordon Merchant, who owns 15.6 percent of the company, told one Australian newspaper that he would consider buyout offers.
On Wednesday, shares closed nearly flat at 1.03 Australian dollars, or $1.03.
In February, Billabong rejected three takeover offers from private equity group TPG Capital, the last for 3.30 Australian dollars, or $3.53 at the exchange rates at that time, per share. The would value the company at around 817 million Australian dollars, or $765 million at February exchange rates. At the time, Merchant was said to have wanted at least 4 Australian dollars.
With a possible change of heart by Merchant, there's renewed rumblings that TPG might return to the table with a sweetened offer.
ONLINE SHOPPING , AND THE FUTURE OF THE HIGH STREET
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The internet has changed the way we shop, we all use it, we order flowers, order books, subscribe to magazines, order groceries, and don't we all just love shopping on Amazon.
The UK currently has 51 million internet users (82% of the population) with 39 million (77%) of households now having access to the internet.
And whether we like it or not internet shopping in the UK is growing exponentially at around 11% annually, with 50% of all retail shopping now done online and last year alone just over 6 million users accessed the internet via a Smartphone (10% of the population in the last year alone )
Yet have we ever wondered what affect online shopping will have on retail outlets on the high street, the smaller retailer in particular.
The rapid evolution of technology has given consumer's access to devices, web applications, and contact centre sources , which enables them to research, purchase from, and interact with companies through numerous channels—the physical or online store, call centre, or even a social networking site.
Customers are telling us that the highest ranking reasons for online purchasing are convenience, better value for money and access to a greater product range than the high street.
So will the high street still survive?
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Lonely Planet shop opens today
Lonely Planet's own-brand bookshop stocking solely LP titles opened today (29th June) in Manchester Airport.
The 100-sq-metre shop, based in Terminal 1, is the first Lonely Planet bookshop to open in Europe, with the only other based in Sydney Airport, Australia.
Lonely Planet has partnered with LS Travel Retail UK & Ireland—which also owns Watermark and Relay—to create the store, which features interactive audio screens. In a unique feature, visitors will be able to touch the area in the world they are travelling to on an interactive globe and be given travel advice on it about the region via Lonely Planet's website.
It is the first time Lonely Planet has had a strong retail presence in a UK travel hub since W H Smith entered into an exclusive partnership to stock Penguin Travel Books in 2009.
Fin Casey, LS Travel Retail UK and Ireland m.d., said: "The Lonely Planet store opening at Manchester Airport contributes significantly to our growth momentum in the UK. It follows closely behind three store openings already in 2012: Watermark Books at Kings Cross, RELAY at Cannon St, and the La Maison du Chocolat pop-up store in Terminal 5, London Heathrow."
Shona Gold, Lonely Planet sales and marketing director, said the fact LP was investing in a new bookstore in the current climate was "exciting".
"We are absolutely keen on keeping the brand special for customers. That is the whole point of the Manchester Airport store, which is really iconic. That is why we are investing in something expensive in this climate," she said.
Manchester Airport sees 19 million passengers through its doors every year.
Pressure mounts on boss Bob Diamond to quit Barclays
Shareholders, pension funds and powerful business groups yesterday ratcheted up the pressure on Barclays boss Bob Diamond and chairman Marcus Agius to quit as they became tainted by yet another scandal.
As Barclays came under fire from all quarters, analysts warned the bank had reached a 'tipping point', claiming the threat of litigation from customers and rival banks could saddle it with huge legal costs.
Yesterday Barclays, along with Royal Bank of Scotland, Lloyds and HSBC were found guilty of mis-selling toxic loans to small businesses and ordered to pay compensation.
This follows the £290m fine on Wednesday by US and UK regulators for rigging crucial LIBOR interest rates used to set loans and mortgages, as well as trillions of pounds in complex derivatives.
City big hitters yesterday made it clear that Diamond's decision to give up his bonus would not be enough, warning he and his fellow bank bosses should start paying with their jobs.
Simon Walker, director general of the Institute of Directors, said: 'It is high time for a clear-out of the leaders who created this mess, and they should be replaced with new blood.'
Public disgust at Barclays' reputation for 'casino' banking spilled over to the City, with leading shareholders demanding answers from the Barclays boss over the interest rate rigging scandal.
A group of big pension and insurance funds are pushing Barclays to dump Diamond – formerly the boss of the investment bank – as part of a wider move to scale back its 'casino banking' activities.
Barclays is also thought to be under pressure to bring forward the retirement of its chairman Marcus Agius in a bid to appease angry shareholders.
It is believed Agius had planned to announce his retirement from Barclays at some point later this year in a bid to give the bank time to find his successor before he left.
An official in charge of boardroom behaviour at one of the FTSE's major institutional investors said: 'There are urgent questions about the tone set from the top of Barclays Bank, and that includes the chairman, chief executive and non-executives.What was the chairman doing in all of this? It's probably time he was retiring.'
Jane Coffey, head of UK equities at mutual Royal London Asset Management, added: 'If this is a few rogue traders then Diamond's job is not on the line, but it doesn't look as if it was just rogue traders.
'If it's a serious failing of culture within the organisation that he was in charge of, giving up his bonus is probably not enough.' Analysts at Oriel Securities warned Barclays could face a 'litigation minefield' over the latest scandals, which could be a 'tipping point' for the bank.
Vivek Raja said: 'It's a potential litigation minefield.
'Barclays could be flooded with law suits from retail and small business customers claiming for mis-sold loans and mortgages linked to LIBOR.
'Even if the success rate of claims is low, the cost of processing claims could be significant.'
There are growing fears that the fixing of interest rates could have hit UK pension funds which invest in these complex investments.
Pension funds headed by lobby group the National Association of Pension Funds questioned whether they have lost out as a result of the manipulation of LIBOR.
Sir Roger Carr, president of business lobby group the CBI, said: 'The weakness must be addressed and the culprits punished.
'We should be mindful, however, of the importance of banking to the UK economy and that throwing the baby out with bathwater is in no one's interest, providing the baby is clean.'
Walmart CEO Mike Duke Inducted Into New Diversity Hall of Fame
ROGERS, Ark., Jun 29, 2012 (GlobeNewswire via COMTEX) — More than 500 Network of Executive Women members and industry supporters honored Michael T. Duke, president and CEO of Wal-Mart Inc., as he was inducted into the NEW CPG/Retail Diversity Hall of Fame, June 28, 2012 in Rogers, Ark. NEW is the consumer products and retail industry's largest diversity organization, with more than 5,000 members in 19 regions in the U.S. and Canada.
Duke received the William J. Grize Diversity Hall of Fame Award, named after the late Ahold USA CEO, an early advocate of industry diversity. The award honors industry leaders who have demonstrated "an enduring commitment to the advancement of women and to creating a diverse and inclusive workplace." He was recognized during a breakfast event hosted by NEW Northwest Arkansas during Women's Day at the LPGA at the John Q. Hammonds Center.
"This is really for Walmart, for our associates and our customers," Duke said while accepting the award. "I'm honored in this job every day to serve our customers and associates."
NEW Past Chair Alison Kenney Paul, vice chairman, U.S retail leader at Deloitte, presented the award. "As president and CEO of Walmart, Mike Duke leads an organization fully committed to both the women in our business and to the Network of Executive Women and its mission," Paul said.
A NEW foundation sponsor, Walmart's commitment to women in the Northwest Arkansas area helped the Network establish one of its first regional groups. "Mike is a longtime supporter of NEW, describing it as a 'national model and a true change agent,'" Paul said.
Under Duke's leadership, Walmart has advanced women to a number of key positions. In January 2012, Rosalind Brewer, the first chairperson of the Walmart President's Council of Global Women Leaders, became the first woman and African American to lead one of Walmart's three business units when she was promoted to chief executive of Sam's Club. At the same time, Walmart promoted Gisel Ruiz to executive vice president and chief operating officer of its U.S. business and Karenann Terrell to chief information officer.
Last fall, Duke unveiled the Walmart Global Women's Economic Empowerment Initiative, which uses the company's size and scale to help empower women across its supply chain. Over five years, the company will source $20 billion from women-owned businesses in the United States and double sourcing from women suppliers internationally.
The event also featured a panel discussion with Duke; Paul; Ruiz; and Elane Stock, president of Kimberly-Clark Professional, all of whom shared their diversity-related life and career experiences.
"The discussion around diversity and inclusion is good for business, but is also the right thing to do," Duke said. Asked for a "best practice" for women in the cpg/retail industry, Stock advised NEW members to "lock arms with other women and colleagues and make each other successful. It will make all the difference in advancing ours and others careers." She cautioned members against the pitfalls of unconscious bias, calling it "the next frontier" in diversity and inclusion and suggested cpg/retail leaders address unconscious bias "so that we don't unfairly advantage or disadvantage one group or another."
Paul advised companies to "connect [employee resource groups] with those of other organizations." Walmart executive Ruiz shared two tips that have helped her succeed: "Simplify your life at work and home," she said, "and leverage you strengths at work — don't try to be someone else at work — be your whole self. Women are naturally good listeners and nurturing; leverage that strength and challenge yourself to how you can best use it in your organization and life."
The women executives also shared personal stories of feeling excluded or differentiated because of their gender. Their passion for diversity and inclusion, they said, was sparked while purchasing a car, working as a store manager and dealing with customers, and working as a sales person in a traditionally male industry. "When you experience this adversity and feel the passion ignite, ask yourself what you are going to do with it," Ruiz advised. "Inclusion is not just about color or gender; it's understanding and appreciating different lifestyles, shopping patterns and needs."
"We all face moments of adversity," Duke noted. "It's what you do coming out of them that matters. Rigid and stern used to a strength. The new management competency is agility — being open and flexible with the way we serve our customers and our associates."
Walmart CEO Mike Duke accepted the NEW CPG Retail Diversity Hall of Fame Award, the Network of Executive Women's highest honor, at a June 28 ceremony in Rogers, Ark.
Walmart CEO Mike Duke (center) received the NEW Diversity Hall of Fame Award from Past Network of Executive Women Chair Alison Kenney Paul of Deloitte (left) and current Board Chair, Michelle Gloeckler of Walmart (right). The award recognizes the retailer's "enduring commitment to the advancement of women and to creating a diverse and inclusive workplace."
Exclusive: Amazon to take on Brazil's ecommerce jungle
(Reuters) – Amazon.com Inc (AMZN.O) is expected to set up a digital bookstore in Brazil in the fourth quarter, as it seeks to get a piece of the fast-growing online retail market in the country that inspired its name.
The e-commerce powerhouse, named after Brazil's longest river, wants to elbow its way into Latin America's largest economy with the popular Kindle e-reader and a Portuguese-language catalogue of digital books, according to Brazilian publishers and an industry source familiar with Amazon's plans.
The all-digital approach will allow Amazon to minimize the risks that a bigger retail launch would imply in a country with notorious infrastructure shortcomings and a complex, costly tax system. The company would also have to ride out a downturn in Brazil's economy that threatens to cool consumer demand.
"Brazil would be the first country Amazon enters only with digital (products) and that is because of the logistic and tax difficulties," said the industry source, who spoke on condition of anonymity because of the sensitivity of the negotiations.
"Having a full retail operation? That's the goal," the source added.
A Brazil-based operation would save the country's 200 million consumers from paying high import taxes on online orders shipped from overseas.
Two local book publishers told Reuters they have had meetings and video conferences in recent months to negotiate contracts with Amazon's head of Kindle content, Pedro Huerta.
"They told us the plan is to start between October and November," said one of the publishers, who asked not to be identified.
Amazon spokesman Craig Berman declined to comment.
The world's largest online retailer, Amazon is the latest U.S. company looking to tap Brazil's $10.5 billion online retail market, which is expected to grow 25 percent this year fueled by a swelling middle class. Others include online movie service Netflix Inc (NFLX.O) and home-rental service AirBnB.
It would be Amazon's latest foray into emerging markets after breaking into China in 2004 and India earlier this year.
But the move comes as Brazil's decade-long expansion in consumer growth hits the brakes. In 2012, Brazil's economy is expected to grow less than last year's 2.7 percent expansion, raising questions about the timing of Amazon's entrance.
Pedro Guasti, director of the Sao Paulo-based research firm eBit, says Brazil's online business has become big enough to pop up on Amazon's radar.
"This year we should reach $12 billion in sales online, a level that justifies their entry. If they wait much longer it would become very expensive," he said.
KINDLE AIMS FOR SUPREMACY
Amazon thinks it could quickly dominate Brazil's ebook market with the Kindle, boosting sales of electronic books to 15 percent of the publishing market in the first year of operations from 0.5 percent currently, the industry source said.
Amazon hopes to grab 90 percent of Brazil's ebook market, the source added, in part because many Brazilians already download content from its site using readers they bought abroad.
Brazilians account for 1 percent of the global traffic to Amazon's websites, according to the company's information firm Alexa. That compares to 2.3 percent in Britain or 1.3 in Germany, where Amazon already has operations.
To gain market share quickly in Brazil, Amazon will likely sell its most basic Kindle model at a subsidized price of under 500 reais ($239), three times more expensive than in the U.S. but still bellow rival products, the source said.
That strategy – prioritizing market share over profit – is one that Amazon has used elsewhere, prompting critics to question the company's ability to make money in the long run.
Amazon has already signed contracts with around 30 Brazilian publishers and is rushing to build a portfolio of some 10,000 electronic books ahead of the end-year shopping season, the source familiar with the company´s plan said.
A publisher involved in the negotiations said Amazon is planning to price the ebooks at about 70 percent of their cover price and earn a profit margin of to 40 to 50 percent.
"Revenues for us will be insignificant, but we see it as an important channel to promote our products and sell more physical books," the publisher said, who also asked not to be identified because negotiations with Amazon are ongoing.
Amazon's move could end up prompting other U.S. competitors to expand their digital operations into on Brazil. One distributor said Barnes & Noble Inc (BKS.N) has already approached some Brazilian publishers with its reader Nook. A spokeswoman with the U.S. bookseller said they have plans to expand internationally but had no specific comments on Brazil.
"Local companies will need to acquire foreign technology in order to survive," said the source close to the negotiations.
NOT AN EASY MARKET
Rumors of Amazon's arrival are swirling in Brazil's online retail market, with many players already preparing marketplace platforms to compete with the U.S. giant.
Despite relatively low Internet penetration, Brazil has recently overtaken India as Facebook's (FB.O) second-biggest user base and is one of the world's fastest growing markets for smartphones.
But publishers and online retailers warn that when Amazon expands its retail offerings, it will struggle to replicate its efficient business model in Brazil, where labor costs are high, taxes complex and less than 20 percent of roads are paved.
Online retailers in Brazil complain about inter-state taxes and logistical bottlenecks in this vast country, which is roughly the size of the United States and where mail is sometimes delivered by canoe. Steep customs taxes and an endless chain of intermediaries make imported goods expensive.
Ludovino Lopes, head of Brazil's ecommerce association camara-e.net, says Amazon will have to adapt. "They will have to tropicalize their business model to take on those challenges."
One likely strategy is a long-term approach.
"I think Amazon will take small steps at first, to learn the market, but then invest in growth. Amazon is a large company, and could subsidize its operations in Brazil for years before making a profit there," said Colin Sebastian, an equity research analyst with R.W. Baird in San Francisco.
Local competitors say Amazon would first have to prove it can compete in the challenging environment.
"They are going to face the same kind of problems we always had," said Sergio Herz, director of Livraria Cultura, one of Brazil's top bookstores with a dozen locations.
"Until now they were in heaven and we were in hell. Come to hell with us, Amazon."
Hugo Boss Updates Men's Presence at Saks Fifth Avenue
Hugo Boss has a new home at Saks Fifth Avenue.
The German men's wear brand has unveiled a revamped Boss Men's Shop as well as the first Hugo Men's Shop at the Saks flagship in New York. In total, the real estate for the brand spans 2,800 square feet across the back and right-hand side of the seventh floor.
The new 2,300-square-foot Boss shop is one of 10 locations in key cities that boasts the new look, which features state-of-the-art lighting, backlit logos and updated visuals designed to increase visibility and brand presence. Fabric wall panels, black steel, oak and high-gloss surfaces enhance the selection. The shop offers Boss Selection, Boss Black and Boss Orange apparel and accessories for men. In addition, the 500-square-foot Hugo shop marks the first hard shop for the updated brand in the U.S. It employs varying shades of gray accented with Hugo's signature red. Bronze-tinted glass contrasts with white lacquered and mirrored surfaces that enhance the clean and modern feeling of the label.
"The additional space has allowed us to expand our footprint," said Mark Brashear, Hugo Boss chairman and chief executive officer for the Americas. The new concept is also being employed in shops in Europe at Selfridges and Harrods in England, El Corte Inglés in Spain and Galeries Lafayette in France, he said.
"We're very pleased with the way it turned out and what it will mean to our business with Saks," said Brashear, pointing out that a second Hugo shop will open at Saks' Beverly Hills store in California later this summer. He said initial sales results from the shop are strong. "The weekend was fantastic," he said. "We doubled our day [over last year] on Saturday, so initial indications are encouraging."
Tesco weighs future of Fresh & Easy
(Reuters) – World No. 3 retailer Tesco promised to pull the plug on its loss-making Fresh & Easy chain in the United States if it continued to disappoint, and rejected renewed calls for an independent review of its strategy for the venture.
"If we see there is no chance of success, we'll do as we've just done in Japan," said chief executive Philip Clarke, referring to Tesco's deal this month to exit that market.
"It is not about ego, we are businessmen," he told the British grocer's annual meeting in the Welsh capital, Cardiff, on Friday.
The Change to Win Investment Group, which advises U.S. trade union-sponsored pension funds, during the meeting asked Tesco to establish a committee of non-executive directors to review Fresh & Easy's future and set fixed benchmarks to measure its success.
"We will not be doing that," responded chairman Richard Broadbent.
He said the strategy for Fresh & Easy was regularly reviewed by the whole board, with the retailer providing full disclosure on the business in its annual report and accounts.
"We're not hiding anything at all on Fresh & Easy," he said.
Change to Win's proposals have been ignored by Tesco for several years. It regards them as union motivated. Fresh & Easy does not recognise trade unions.
Clarke has this year rejected shareholder calls to pull the group out of the United States.
In April he said he did not expect the chain to break even until its 2013/14 financial year, against a previous target of 2012/13.
This month, Tesco reported underlying sales growth at Fresh & Easy slowed to 3.6 percent in its first quarter from 12.3 percent in the fourth quarter of last year.
"What shareholders want to know is, where is Fresh & Easy going and how much will it cost to get there?," said Michael Zucker, Change to Win's director of retail initiatives.
PAY APPROVED
Once one of the most consistent British companies in terms of earnings growth, Tesco stunned investors in January with its first profit warning in more than 20 years, saying it needed to invest heavily to stem a steady decline in UK market share.
However, it avoided becoming the latest victim of the 'shareholder spring' which has seen investors resist big pay rises at underperforming companies.
The phenomenon has led to the departures of Aviva boss Andrew Moss and Sly Bailey, head of newspaper group Trinity Mirror.
Some 96.9 percent of shareholders who voted at the meeting backed Tesco's executive pay report, even though Pensions Investment Research Consultants (Pirc), a pension fund consultant, had called on investors to vote against it.
Last month's move by Clarke not to take his 372,000 pounds bonus may have headed off any potential rebellion.
He told the meeting Tesco's strategy to revive its core UK business, which accounts for about one in every 10 pounds spent in British shops, and about 70 percent of Tesco's annual trading profit, was making progress as he addressed shareholder concerns ranging from empty shelves to rodent-infested stores.
This month, Tesco reported a fall in first-quarter underlying sales in Britain and said tough trading conditions showed no sign of improving.
Broadbent gave Clarke his backing when one shareholder asked if the latter would resign if he could not deliver recovery in the U.S. and the UK.
"Phil is evidently one of the best retailers in the world. There is absolutely no question of Philip Clarke resigning," said the chairman.
After the meeting Clarke was asked if the British government should be doing more to stimulate economic growth.
"I think there's a case for it," he told reporters.
"Peoples' disposable incomes are squeezed. Until there's some change I think it will be hard for everybody."
But he welcomed this week's move by the government to scrap a planned increase in fuel duty and took some comfort from recent falls in the oil price.
Shares in Tesco, which lags France's Carrefour and U.S. industry leader Wal-Mart in annual sales, have lost nearly a quarter of their value over the last year. They closed down 0.6 percent at 310 pence.
Indian retailer eyes expansion across Gulf
Dubai-based Indian retailer Dhananjay Datar is looking to expand his empire across the Gulf region.
Datar, managing director of Al Adil Group, is set to take his Peacock, Al Adil supermarket brands into Bahrain, Kuwait, Qatar and Oman, he said in an interview with India's Daily News & Analysis.
Known as the 'masala king', his flagship food brand Peacock already sells spices, staples, jams, canned foods in the UAE.
After taking over the family business from his father, he now runs 19 supermarkets across the UAE and has two flour mills and two factories.
He told the paper that four new supermarkets were in the pipeline in Sharjah and Dubai.
"We now are in the process of expanding our supermarkets to areas like Bahrain, Kuwait, Qatar and Oman. There is no other player in the Gulf that competes with us on Indian products, but there are many Indians there," he added.
He told the paper that his company will now be exporting 300 tonnes of Indian products per day to Gulf countries under the Peacock brand, growing from only 50 tonnes three years ago.
He said Al Adil sells more than 5,000 food items and other products in the Gulf through the supermarkets, most of which are sourced from India.
"Our plan is to open 20 new supermarkets across Gulf countries over the next two years," he added.
Datar said he also planned to expand the range of products sold at his Al Adil supermarkets to 2,000 within the next six months.
Emirates Air Line cable car opens in London
Emirates Air Line, the UK's first urban cable car, was officially launched today as the British capital gears up to host the London 2012 Olympics.
Dubai-based Emirates Airline signed an AED204m (US$55.5m), ten-year sponsorship deal to rebrand the cable car service, the most expensive such system ever built, in October.
The 1.1km cable line, which crosses the River Thames, has the capacity to carry up to 2,500 passengers per hour in each direction and offers views across the City of London, Canary Wharf, Greenwich, the Thames Barrier and the Olympic Park.
Mayor of London, Boris Johnson, Emirates Airline president Tim Clark and London's Transport Commissioner, Peter Hendy CBE, attended the first official flight.
Emirates Airline, one of the world's biggest airlines by passenger numbers, has used its sponsorship deals to fuel its global marketing strategy. The airline sponsors the English Premier League football club Arsenal and also owns the naming rights to the club's stadium.
The Dubai airline also has deals with six football clubs in Europe and has said it is considering plans to advertise during next year's Super Bowl, typically the most watched television show in the US.
Aussie retail giant David Jones in British takeover offer
Shares in struggling upmarket Australian department store David Jones soared on Friday after it received an unsolicited takeover offer from a mystery British Company.A woman walks past advertising signage outside the David Jones department store in Sydney on June 29, 2012. Shares in the struggling retail giant David Jones soared on June 29 after it received an unsolicited takeover offer from a mystery British bidder.
The retail giant, which is battling weak consumer sentiment and an explosion in online shopping, saw its stock jump more than 17 percent, before easing to 12.3 percent higher at Aus$2.54 in early afternoon.
In a statement to the market, it said it had received "an unsolicited letter from a non-incorporated UK entity… indicating its interest in making an offer for the company".
"The directors do not believe they currently have relevant information to enable them to qualify or value the approach but, should this change, will advise the market accordingly," it said.
The news helped push other retail shares higher, with David Jones' key rival Myer up more than four percent at Aus$1.61.
In March, David Jones warned its full-year profit could plunge by up to 40 percent as stalling consumer spending curbs demand, while the growth in online shopping was also costing it business.
Rolls-Royce unveils revamped Phantom (USD 520,000).
Roll-Royce has unveiled its new flagship AED1.9m (US$520,000) Phantom Series II, a revamped version of the marque's ultimate luxury car, during a ceremony at Abu Dhabi Motors.
The modern Phantom was released in 2003 and was the seventh car from Rolls-Royce to wear the name. The Series II carries new refinements, including a new front-end design; one piece stamped radiator grille; new single-piece wheels; redesigned rear bumper; improved audio, telecoms and connectivity systems and, most importantly, a new eight-speed gearbox.
The new gearbox and rear differential enhance are tuned to deliver exemplary driving dynamics, matching the 6.75-litre V12 direct injection engine's characteristics. The new model also takes smaller sips from its fuel tank, with consumption improved by 10 percent on the combined cycle and CO2 emissions falling from 388 to 347 g/km. The new range includes the standard wheelbase version, plus the Series II Coupe, Drophead Coupe and Extended Wheelbase versions.
Marcus Reil, regional marketing manager, Middle East, at Rolls-Royce Motor Cars, said: "The Rolls-Royce Phantom Series II embodies the 21st-century Rolls-Royce. More than 100 years of engineering and design excellence expressed in a modern enhanced style. The Phantom Series II design broadens the appeal of Rolls-Royce Motor Cars, attracting individuals who appreciate its fusion of ultimate refinement, and cutting-edge technology."
Arno Husselmann, general manager of Abu Dhabi Motors added: "This pinnacle of automotive excellence is attracting great interest and will without a doubt contribute to the continued success of Rolls-Royce in the UAE."
Abu Dhabi Motors is the largest Rolls-Royce dealership in the world, as well as one of the busiest.
Dh600m expansion deal for the Dragon Mart Mall
Nakheel has appointed contractors on the Dh600 million (US$163.3m) expansion of Dragon Mart in Dubai.
The move comes as the Palm Island builder switches focus from residential to retail.
The developer yesterday said it was awarding contracts to double the size of the sprawling mall famous for its huge range.
But navigating the vast development may prove a challenge for shoppers with the enlarged mall equivalent in size to 47 international football pitches.
"Dragon Mart is already the world's biggest trading hub for Chinese products outside mainland China. The phase two expansion will provide many more opportunities for retailers, hoteliers and restaurants to prosper," said Ali Rashid Lootah, the chairman of Nakheel.
The 177,000 square metre extension of the mall will include a Geant hypermarket, a nine-screen Grand Cinema complex and a three-storey hotel. The project is being delivered on a build-operate-transfer basis, a form of privately financed construction. It is being built by a vehicle called New Mall Limited, said Nakheel. A spokeswoman declined to provide further details. Building contracts are shared by United Engineering Construction and Kele Contracting.
Despite the construction of millions of square metres in new retail space across the Emirates over the past decade, the sector is still benefiting from strong retailer demand.
Deerfields Town Square, an 80,000 sq metre mall under construction in Abu Dhabi, has already leased half of its available retail space, six months before its expected completion, Jones Lang LaSalle reported last month. Nakheel has also appointed architects to design a 160,000 sq metre mall on the Palm planned to open in 2014.
Developers with malls within their portfolios have reaped the rewards of rising visitor numbers in the Emirates this year.
Emaar Properties, the developer of the Burj Khalifa, reported a 28 per cent increase in leasing revenues in the first quarter compared with a year earlier – most of which came from the retail sector. Nakheel said yesterday it had pre-let 80 per cent of the available space in the extended Dragon Mart.
About 52,000 people visit the mall every day, generating annual footfall of about 18.9 million.
A|X Armani Exchange to Open Montreal
ARMANI'S LATEST EXCHANGE: A|X Armani Exchange will open its 250th store on Rue Saint Catherine in Montreal on Thursday with a VIP celebration and special performance by Canadian electronic music band Dragonette. The 4,638-square-foot store is the first freestanding store in Canada to feature the brand's latest store design, which includes industrial-style black and silver finishes, porcelain tile floors with metallic silver coats and aluminum shelves on silver-gray walls. "The new design is sleek and modern with unlimited flexibility built into store fixtures, allowing a constant ability to change with our customers' needs," said Harlan Bratcher, A|X Armani Exchange president and chief executive officer. A|X will also open a store in the Christiana Mall in Newark, Del., this month, and units in San Francisco and Mall at Millenia in Orlando, Fla., in August.
Debenhams total sales rise 3.9%
Department store Debenhams has today reported a total sales increase of 3.9 per cent for the 16 weeks to June 23rd 2012.
In an interim management statement published this morning, the group announced a like-for-like sales increase of three per cent and believes that these positive results were driven by consumer interest in recent events including the Euro 2012 Championships and the Diamond Jubilee.
Online sales have also seen a significant rise, growing 34.9 per cent over the period, an increase of 40.2 per cent in the year-to-date, a boost that has seen the retailer become the eleventh biggest UK retailer by traffic volume.
Earlier this month, the group announced the roll out of free Wifi across 167 of its UK stores, giving it the largest Wifi coverage of any other UK department store.
Speaking at the time, Debenhams Director Simon Forster commented. "With over one million customers already with our app on their phones, free Wifi in stores has the potential to transform how people shop."
Mobile commerce is now the fastest growing channel for the group, accounting for 30 per cent of website traffic.
Similarly, a focus on seasonal clothing has helped boost market share, particularly in womenswear which saw a ten basis point share improvement, according to figures from Kantar Worldpanel.
The retailer's strong results amid ongoing economic instability have allowed it to maintain focus on international expansion, and outside the UK two new franchise stores have opened during its second half.
In total, the group now has 68 international stores with another set to open later this year and a further eight to being trading in 2013. In the UK, nine stores completed modernisations earlier this month with a further nine expected to be finished by the end of September.
Michael Sharp, Debenhams CEO, welcomed the results, saying: "We have continued to make good progress and I am particularly pleased with the like-for-like sales trends in the second half of the year.
"Debenhams has again demonstrated the efficacy of our strategy to build a leading international, multi-channel brand and our ability to trade well in difficult market conditions, as well as the inherent strength of the department store model."
Although CBI figures released yesterday revealed that 58 per cent of retailers reported an increase in sales on a year ago, Sharp remains cautious about future trading.
"Looking forward, there is little sign of an imminent recovery in consumer confidence," he said.
"Our focus for the remainder of this financial year and into next year will therefore be the remorseless execution of the four pillars of our strategy which we believe will bring success irrespective of the wider economy."
The board of Debenhams plc also announced today a Directorate change as non-executive Director Adam Crozier is to step down from his role on September 1st 2012.
Dennis Millard will succeed Crozier, who has worked for the company since May 2006, as Chairman of the remuneration committee while Mark Rolfe will in turn succeed Mr. Millard as Chairman of the audit committee.
Fashion group Foschini sees potential in Nigeria
The Foschini Group (TFG), South Africa's second largest listed clothing retailer with 15 trading brands (including Totalsports, Markham and Donna-Claire), is creating a footprint across Africa. With the majority of products manufactured in South Africa, TFG operates almost 90 stores in southern African countries (in Namibia, Botswana, Zambia, Lesotho and Swaziland) and now plans to expand to Mozambique and Nigeria.
How we made it in Africa's Kate Douglas speaks to Ronnie Stein, the chief financial officer at TFG, about the decision to expand to Nigeria and how the development of shopping centres can influence TFG's footprint in African countries.
TFG has plans to expand to Nigeria. Why Nigeria?
Nigeria, which is a massive country of about 160 million people, really only has one shopping centre in Lagos. A new shopping centre has just been commissioned and once it's up and running, we can get into Nigeria and can start operating there because once these shopping centres develop, we can increase our footprint dramatically. So we decided to go to Nigeria and open a Foschini and Markham store in July and with those two stores we are going to learn exactly what goes on in that country. Then once we understand trading, the logistics and all sorts of other factors – and we've got people on the ground there now – we can then start to increase our footprint. We do hear that in that country there are as many as 100 shopping centres being conceived.
Our strategy is to get to know a country by opening a couple of stores and once we understand it and the shopping malls develop we can add as much as – I would say – up to 12 TFG Group stores in each shopping centre. So you can imagine that if 30 or 50 shopping centres are built in the next five to six years, we could have up to 500 stores quite comfortably. Once we have a strong footprint in Nigeria, then we can go to other areas as well.
When do you predict to have a strong footprint in Nigeria?
Well we don't really know. We have to rely on the shopping centres to be constructed and, when they are, we will open our stores. We will follow the shopping centres. My prediction is that in the next five years, if there aren't 50 centres there will be 30 shopping centres. Then, if you look 10 years down the line, we think Nigeria can for us be almost as big as South Africa. It's a long term strategy that we think could be very good for us.
Will garments and other products be customised to these African markets?
No, not at all. It will be the same stock as in South Africa. What we do find is that we are able to charge slightly higher prices outside South Africa because there is not that much competition and we need to do that to cover the additional logistics costs.
How are TFG stores currently doing in Namibia, Botswana, Lesotho and Swaziland?
They are the traditional southern Africa states, which we have been in for quite a long time and our stores run particularly well there. In Namibia we have 60 stores there now and they run with credit, pretty much like South Africa. We have recently actually just launched credit into Botswana and Lesotho with good success.
Why did TFG decide to expand to these countries?
Because they are on our border, so I mean it's very convenient logistics wise – it's very close by – and also because there is quite a good retailing environment in those particular countries.
Africa – we think – is going to be massive, not now but in five to 10 years, so we decided to start expanding our footprint outside of southern Africa and the first area we went to was Zambia. The reason that we went to Zambia is that there are already shopping centres in Zambia so it's quite a nice place to trade there. We tried with two stores there that actually did pretty well. Because we have 15 trading brands, when there is a decent shopping centre in a particular country, and we are happy with the environment, we can quite easily put as many as 10 to 12 brands in that particular shopping centre so we can move quickly as the shopping centre environment in that country grows. We now have 12 stores in Zambia.
Thomas Pink bets its shirt on growth in SA
Thomas Pink, the exclusive British clothing brand, has arrived in South Africa as it seeks growth in emerging markets.
Speaking ahead of today's official launch of its first local store, Thomas Pink merchandising, buying and distribution director Melanie Traub said: "We are looking to expand internationally" and further stores would be opened in South Africa, although the locations had not been finalised.
The renowned retailer of finely crafted shirts for men and more recently for women, is part of leading luxury goods group LVMH Moët Hennessy Louis Vuitton.
It has opened stores in other emerging markets such as Mexico and has plans to move into India. At its new South African store, located in the upmarket retail centre Hyde Park Corner, its target market of wealthy business people can purchase shirts for between R1 295 and R3 200 apiece.
To help it navigate the South African market, Thomas Pink has partnered with McCullagh & Bothwell, which has been supplying high-end luxury men's clothing to South Africans for 116 years and is still run by descendants of Sam Bothwell, one of the founders.
Mickey Walker, a McCullagh & Bothwell managing executive, said the launch of Thomas Pink in South Africa followed nearly two years of discussions between the two partners. Walker said the response to the launch store had been "very encouraging", which showed the demand for a quality formal shirting brand like Thomas Pink in South Africa, and tapped into the heart of the company's growth strategy in launching here in the first place.
"Emerging markets like ours have a real appetite for luxury clothing brands, and Thomas Pink's early signs of local success proves that," Walker said.
At least one more store has been planned for Gauteng, with Durban and Cape Town also being potential future locations.
The brand's flagship stores are in London's famous Jermyn Street; Madison Avenue, New York; and Rue Francois Premier, Paris. There are currently more than 90 Thomas Pink stores worldwide, including in Mexico, Dubai, Hong Kong, Australia, China and Canada.
Traub said Europe's crisis had not affected Thomas Pink as much as other retailers, which she attributed to the business sticking to its core brand standards of high quality business shirts, mainly for men. "We have not gone into mass discounting," she said.
Nike 2012 revenues of $24.1 billion, up 16 percent
BEAVERTON, Ore., Jun 28, 2012 (BUSINESS WIRE) — –Fourth quarter diluted earnings per share down 6 percent to $1.17
–Fiscal 2012 revenues of $24.1 billion, up 16 percent, up 14 percent excluding currency changes
–Fiscal year diluted earnings per share up 8 percent to $4.73
–NIKE Brand futures orders up 7 percent, up 12 percent excluding currency changes
–Inventories as of May 31, 2012 were up 23 percent versus the prior year
NIKE, Inc. NKE -1.24% today reported financial results for its fiscal 2012 fourth quarter and full year ended May 31, 2012. Fourth quarter revenues rose 12 percent, or 14 percent on a currency neutral basis, to $6.5 billion, the largest revenue quarter in NIKE, Inc.'s history. This was a result of higher revenues across every NIKE Brand geography, key category and product type as well as across all Other Businesses. However, diluted EPS for the quarter was down 6 percent as a result of a lower gross margin, higher SG&A spending, an increase in the effective tax rate and a charge related to restructuring NIKE Brand Western Europe's operations to better realign resources against growth opportunities and drive efficiencies.
Revenues for fiscal 2012 were up 16 percent, or 14 percent excluding the impact of changes in foreign currency, to $24.1 billion. Diluted EPS for the year increased 8 percent to $4.73 as a result of strong revenue growth, leverage of SG&A, and a lower average share count, which more than offset the impact of a lower gross margin and higher effective tax rate.
"Fiscal year 2012 demonstrated NIKE, Inc.'s greatest strength — innovation. We delivered an amazing number of game-changing products and services that drove record revenue growth," said Mark Parker, President and CEO, NIKE, Inc. "We also delivered solid profit growth for the year despite some headwinds in a challenging global economy, which will continue into the next year. That said, NIKE is well positioned and will remain aggressive, flexible and laser-focused on the high-growth opportunities. That's how we continue to deliver long-term profitable growth for our shareholders."*
As part of its long term growth strategy, the Company continually evaluates its existing portfolio of businesses to ensure it is investing in those businesses with the largest growth potential and highest returns. On May 31, 2012, the Company announced its intention to divest the Cole Haan and Umbro businesses, which will allow it to focus its resources on driving growth in the NIKE, Jordan, Converse and Hurley brands. For fiscal 2012, Cole Haan and Umbro together contributed $797 million in revenues and a combined loss before interest and taxes of $43 million. This compares to fiscal 2011 combined revenues of $745 million and a loss before interest and taxes of $18 million.
Fourth Quarter Income Statement Review
— Revenues for NIKE, Inc. increased 12 percent to $6.5 billion, or up 14 percent on a currency neutral basis. Excluding the impact of changes in foreign currency, NIKE Brand revenues rose 14 percent driven by growth in all geographies, key categories and product types. Revenues for Other Businesses grew 16 percent, with no significant impact from changes in currency exchange rates, as all businesses increased revenues during the quarter.
— Gross margin declined 150 basis points to 42.8 percent due primarily to higher product costs, increased investments in our digital business and an unanticipated customs assessment in an Emerging Markets territory related to imports that occurred during four previous fiscal years. These factors more than offset the positive effects of price increases, lower air freight due to improved factory deliveries, as well as ongoing product cost reduction initiatives.
— Selling and administrative expenses grew at the same rate as revenue, up 12 percent to $2 billion. Demand creation expenses increased 23 percent to $760 million driven by marketing support for key product launches, the European Football Championships and the Summer Olympics. Operating overhead expenses increased 6 percent to $1.2 billion due to additional investments in our Direct to Consumer and wholesale businesses.
— Other expense, net was $38 million, primarily comprised of a $24 million charge related to NIKE Brand's Western Europe restructuring. The remaining $14 million was primarily comprised of foreign currency exchange losses. For the quarter, we estimate the year-over-year change in foreign currency related losses included in other expense, net combined with the impact of changes in foreign currency exchange rates on the translation of foreign currency-denominated profits decreased pretax income by approximately $16 million.
— The effective tax rate was 26.1 percent compared to 23.2 percent for the same period last year primarily due to year-on-year changes in tax reserves, partially offset by a reduction in the effective tax rate on operations outside the United States.
— Net Income decreased 8 percent to $549 million and Diluted earnings per share decreased 6 percent to $1.17, reflecting a 2 percent decline in the number of weighted average diluted common shares outstanding.
Fiscal 2012 Income Statement Review
— Revenues for NIKE, Inc. were up 16 percent to $24.1 billion, up 14 percent on a currency neutral basis. — NIKE Brand revenues rose 15 percent excluding the impact of changes in foreign currency, driven by growth in all geographies, key categories and product types. NIKE Brand wholesale revenues increased to $17.4 billion, 14 percent higher than the same period last year on a currency neutral basis. NIKE Brand Direct to Consumer revenues grew 21 percent to $3.5 billion due to 13 percent growth in same store sales and new door expansion. As of May 31, 2012 the NIKE Brand had 557 stores in operation as compared to 487 a year ago.
— Revenues for Other Businesses grew 11 percent with no significant impact from changes in currency exchange rates, driven by growth across most businesses.
— Gross margin declined 220 basis points to 43.4 percent, primarily driven by higher product costs, as well as investments in our digital business, an unanticipated customs assessment in an Emerging Markets territory related to imports that occurred during four previous fiscal years, and higher discounts on close-out sales. These factors more than offset the positive effects of price increases, lower air freight costs, growing sales in our Direct to Consumer operations and ongoing product cost reduction initiatives.
— Selling and administrative expenses grew at a slower rate than revenue, up 11 percent to $7.4 billion. Demand creation expenses were up 11 percent to $2.7 billion due to an increase in sports marketing expense, marketing support for key product initiatives, investments in retail product presentation for wholesale accounts and marketing support for the European Football Championships and Summer Olympics. Operating overhead expenses increased 11 percent to $4.7 billion due to additional investments made in our wholesale and Direct to Consumer businesses.
— Other expense, net was $54 million for the fiscal year, primarily comprised of net foreign currency exchange losses and a $24 million charge related to NIKE Brand's Western Europe restructuring, partially offset by certain non-operating items. For the year, we estimate the year-over-year change in currency related gains and losses included in other expense, net, combined with the impact of changes in currency exchange rates on the translation of foreign currency-denominated profits, did not have a significant impact on pretax income.
— The effective tax rate was 25.5 percent compared to 25 percent for the same period last year. The increase was due to changes in tax reserves, partially offset by a reduction in the effective tax rate on operations outside of the United States.
— Net Income increased 4 percent to $2.2 billion and Diluted earnings per share increased 8 percent to $4.73, reflecting higher net income and a 3 percent decline in the number of weighted average diluted common shares outstanding.
May 31, 2012 Balance Sheet Review
— Inventories for NIKE, Inc. were $3.4 billion, up 23 percent from May 31, 2011. NIKE Brand inventories increased 19 percent; 17 percentage points of growth were due to higher product cost per unit, as input cost inflation and a higher proportion of Footwear versus Apparel more than offset the favorable impact of changes in currency exchange rates. NIKE Brand unit inventories grew 10 percent.
— Cash and short-term investments at period-end were $3.8 billion, $781 million lower than last year due to higher working capital investments, long-term debt repayments and dividend payments compared to the prior year.
Share Repurchases
During the fourth quarter, NIKE, Inc. repurchased a total of 2.3 million shares for approximately $245 million as part of its four-year, $5 billion share repurchase program, approved by the Board of Directors in September 2008. As of the end of the fourth quarter, the Company has purchased a total of 50.3 million shares for approximately $4.1 billion under this program.
About NIKE, Inc.
NIKE, Inc., based near Beaverton, Oregon, is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Wholly-owned NIKE, Inc. subsidiaries include Cole Haan, which designs, markets and distributes luxury shoes, handbags, accessories and coats; Converse Inc., which designs, markets and distributes athletic footwear, apparel and accessories; Hurley International LLC, which designs, markets and distributes action sports and youth lifestyle footwear, apparel and accessories; and Umbro International Limited., a leading United Kingdom-based global football (soccer) brand. For more information, NIKE's earnings releases and other financial information are available on the Internet at http://investors.nikeinc.com and individuals can follow @Nike.
* The marked paragraphs contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed from time to time in reports filed by NIKE, Inc. with the S.E.C., including Forms 8-K, 10-Q, and 10-K. Some forward-looking statements in this release concern changes in futures orders that are not necessarily indicative of changes in total revenues for subsequent periods due to the mix of futures and "at once" orders, exchange rate fluctuations, order cancellations and discounts, which may vary significantly from quarter to quarter, and because a significant portion of the business does not report futures orders.
Nordstrom to open 1st full dept store in Manhattan
NEW YORK (AP) — After circling Manhattan for about two decades, Nordstrom Inc., the upscale department store chain, announced plans Thursday to open its first full-scale store in New York.
The arrival of Nordstrom, envied by rivals for its top-notch customer service, will increase the competition in Manhattan, home to such department stores as Macy's and its higher-tone sister, Bloomingdales, and to Saks Fifth Avenue. But experts believe Nordstrom also will inject new energy into what's already a retail mecca.
The new store will open in either 2017 or 2018 at 225 W. 57th Street, between Broadway and Seventh Avenue, just south of Central Park, under an agreement signed with real estate company Extell Development Co., the Seattle-based retailer said.
The store will be at the base of a skyscraper still in the planning stages that is to include pricey residences and a hotel.
"We're really excited about this," said Pete Nordstrom, president of merchandising at the department store chain. "It's been a long time coming."
Nordstrom announced the details at a news conference in New York. Mayor Michael Bloomberg and Gary Barnett, president of Extell, joined Pete Nordstrom and his brother Erik, who is president of stores.
Nordstrom already operates two stores in Manhattan: a Nordstrom Rack outlet on 14th Street and Treasure & Bond in SoHo, which donates its profits to local charities.
Nordstrom considered other sites, including 57th Street at Park Avenue and Sixth Avenue at 16th Street, according to Faith Hope Consolo, who leads retail leasing and marketing at Prudential Douglas Elliman and worked with landlords on previous Nordstrom deals that fell through.
Pete Nordstrom said the search was complicated by the company's need for a particular configuration plus space for a loading dock, among other requirements. At about 285,000 square feet on seven floors, the new store will be almost twice as big as Nordstrom's average store.
With the opening, Nordstrom aims to piggyback on the success of the Time Warner Center in nearby Columbus Circle, which is anchored by high-end restaurants and specialty chain stores such as J.Crew, Tourneau, Williams-Sonoma and Coach.
While plenty of people predicted Time Warner's vertical mall wouldn't work in a city of street shoppers when it opened in 2004, it has surpassed expectations, generating $1,600 in sales per square foot. The center's original leasing agent, Robert Futterman, chairman and CEO of Robert K. Futterman & Associates, said the forecast was for $1,000 per square foot.
J.C. Penney opened a store near Macy's flagship in Herald Square in 2009, but many more major department stores have closed than opened in Manhattan over the years, including Alexanders, Orbachs, Bonwit Teller, Gimbels and B. Altman.
Nordstrom is entering the scene as Macy's conducts a $400 million facelift on the Herald Square store, and industry experts say its rivals have something to fear from their new neighbor.
"They're all going to have to up their game, particularly in customer service," said Brian Sozzi, chief equities analyst at NBG Productions, an independent research firm.
Nordstrom has a strong offering in shoes, and it's adding new customer services to cater to shoppers now armed 24-7 with tablets and smartphones. It started offering free shipping on all online purchases last year. Wi-Fi access is free in all its full-line stores, where sales associates now carry devices to let shoppers check out wherever they happen to be in the store. And, early this year, Nordstrom made it easier to qualify for prizes through its Fashion Rewards loyalty program.
Pete Nordstrom remained cautious, however, about Manhattan.
"We know what we're up against, and we know it will be a lot of hard work," he added.
Building Abu Dhabi's new Dh10bn airport terminal starts this year
Building at Abu Dhabi International Airport's new Midfield Terminal will start in the third quarter of this year.
The news was confirmed yesterday at the formal signing of the Dh10.8 billion (US$2.94bn) contract for the project.
The 700,000 square metre terminal is one of a number of major infrastructure projects planned in the capital as part of the Abu Dhabi Economic Vision 2030.
It will be built for the Abu Dhabi Airport Company (Adac) by a joint-venture company, created by the Turkish construction group TAV, Consolidated Contractors' Company, headquartered in Greece, and the UAE's Arabtec. The Midfield Terminal is the cornerstone of Adac's efforts to become a world-leading airport group and is due to open in 2017.
"Abu Dhabi Airports Company is looking ahead to an exciting five years of growth focusing on increasing traffic at Abu Dhabi International Airport and on expanding the airport's infrastructure to support this growth," said Ali Al Mansoori, the chairman of Adac.
"Leading and supervising the delivery of this mega-infrastructure, whilst managing one of the fastest-growing airports in the world, is a defining responsibility for the team – a responsibility central to Adac's commitment to provide the best for Abu Dhabi, travellers and airlines."
The project will include extensive development of the area surrounding the new terminal, with the construction of aircraft parking stands, terminal roadways and infrastructure connecting the terminal to the main highway linking Abu Dhabi and Dubai.
"Adac is playing a key strategic and operational role in ensuring that Abu Dhabi's integrated infrastructure system across air, rail, road and sea has sufficient capacity to cater to the increasing numbers of travellers expected as part of the emirate's long-term economic and tourism strategies," said an Adac spokesman.
The international architecture company Kohn Pedersen Fox Associates, which designed the new terminal, said its focus was on passenger experience and environmental impact.
The terminal will include high-performance angled glass to reduce heat and increase air-conditioning efficiency.
The building will be constructed using approximately 69,000 tonnes of steel, more than 680,000 cubic metres of concrete, nearly 500,000 square metres of steel and glass cladding and 325,000 square metres of natural stone flooring
Duty-free retail will include high-end commercial offerings across more than 18,000 square metres, featuring global luxury brands and designer outlets and almost 10,000 square metres of international restaurants and cafes, offering a wide range of styles and cuisines.
Passenger facilities will also include more than 27,500 square metres of airline hospitality lounges, a transit hotel and a heritage and culture museum.
The terminal is designed to accommodate up to 65 aircraft. Inside the building, the check-in area will be capable of handling about 8,500 passengers per hour through 165 counters and 48 self-service kiosks. The baggage system is designed to process more than 19,000 bags per hour.
There will be 136 security screening lanes for passengers, with a further 25 for staff.
Construction is expected to be completed in four years, followed by a nine-month assessment period of all of the terminal's operations.
Virgin Mobile Will Open Retail Stores to Capitalize on IPhone
Virgin Mobile, the pay-as-you-go carrier owned by Sprint Nextel Corp. (S) (S), plans to open its first 10 retail stores tomorrow in Chicago, aiming to profit from the iPhone's expansion into the prepaid wireless market.
Virgin Mobile will become the second U.S. prepaid service to offer the Apple Inc. (AAPL) (AAPL) device, following the iPhone's debut at Leap Wireless International Inc. (LEAP) (LEAP) on June 22. The new stores also mark a strategy shift for Virgin, which has previously relied on retailers such as RadioShack Corp. and Best Buy Co. to market its service, said Jeff Auman, a vice president at the carrier.
Pay-as-you-go companies, which let customers get mobile- phone service without credit checks and long-term contracts, are trying to reinvigorate the market by offering the iPhone and other popular smartphones. The industry has seen its growth slow in recent years, hurt by major carriers rolling out better phones and more flexible payment plans.
"We think there's good demand for high-end devices like the iPhone in the prepaid market," Sprint Chief Executive Officer Dan Hesse said in an interview. "There's a misperception that the prepaid market is only for people that are economically challenged. That's not the case. Our expectation, based on preorders, is that the iPhone will do very well on Virgin."
National Rollout
Sprint, which acquired Virgin Mobile in 2009, runs the decade-old business as a separate brand, with Virgin Group founder Richard Branson serving as the public face of the company. The carrier will begin selling the iPhone online today, with the stores opening tomorrow. The 10 Chicago outlets could lead to a national rollout, the company said.
Prepaid carriers sell phones with smaller subsidies, forcing customers to pay higher upfront prices. Users then get the benefit of relatively low rates and no long-term commitment. Virgin is selling the iPhone 4S for $649 and the older iPhone 4 for $549, with monthly plans running between $30 and $50. Those prices include a $5 discount if customers sign up for automatic monthly payments. Leap, meanwhile, is selling the iPhone 4S for $500, with a $55 monthly plan.
In the first quarter, the iPhone was the best-selling smartphone at AT&T Inc. (T) (T), Verizon Wireless and Sprint, the three major U.S. carriers. The Apple product represented 54 percent of all phones sold at AT&T, 32 percent at Verizon and 34 percent at Sprint, according to BTIG LLC.
Rival Smartphones
The lack of an iPhone has put U.S. prepaid companies at a disadvantage until now. To satisfy customers' desire for Internet-equipped models, they've relied on smartphones from Samsung Electronics Co. (005930), Research In Motion Ltd. (RIM) and ZTE Corp. (763)
Slowing growth in the prepaid market also has contributed to takeover talk. MetroPCS (PCS) (PCS) Communications Inc., a Richardson, Texas-based no-contract carrier, has discussed merging with Deutsche Telekom AG's T-Mobile USA division, people familiar with the matter said last month. MetroPCS shares jumped 14 percent on the news.
Overseas, prepaid carriers have already made inroads with the iPhone. Worldwide, Apple shipped about 4 million prepaid iPhones in the first quarter, according to Strategy Analytics. The shipments added up to about 11 percent of Apple's total unit sales of the device, the research firm found. In the U.S., about 28 percent of wireless consumers use prepaid plans, Strategy Analytics said.
By working with Leap and Virgin Mobile, Apple is "making the best smartphone available to an even broader market in the U.S.," said Natalie Harrison, a spokeswoman for the Cupertino, California-based technology company.
Willing Customers?
Leap, based in San Diego, declined to say how the iPhone has sold in the week since its release. The company would have to sell 125,000 iPhones per quarter to fulfill its commitment to Apple — or about 10 percent of all phones that Leap sells, according to Walter Piecyk, an analyst at BTIG in New York.
John Weber, an analyst at Framingham, Massachusetts-based IDC, expects the iPhone to increase the prepaid wireless industry's growth and expand its customer base. He predicts that users will grow at a 10 percent clip now, compared with his previous projection of 7 percent.
"Without a question, it's likely to boost the prepaid market," Weber said.
Still, some of the biggest prepaid carriers remain on the sidelines. MetroPCS doesn't sell the iPhone, though that may change if Apple rolls out a version with long-term evolution technology — a network standard that offers speedier service.
Coast opening £1m outlet in London's Oxford Street
Fashion retailer Coast will open its biggest store on Friday – a £1 million outlet in London's Oxford street
Customers will be invited to make appointments with friends and be served drinks while trying on clothes
About a third of the store, which is four times the size of a typical Coast outlet, has been devoted to fitting rooms.
But the range has also increased by 40 per cent compared with a typical store to reflect better the products available online.
Margaret McDonald, managing director at Coast, said: 'The fitting room experience is critical.
'We have found that the longer customers spend trying on clothes, the more likely they are to buy.'
The brand is best known for its clothes for special occasions, but has recently tried to broaden the range.
Burberry Names Jenna Littler To Global PR Role
LONDON–Burberry has named Jenna Littler to a newly-created global role that combines oversight of its fashion and corporate PR activities.
Littler previously headed corporate relations at the fashion company, after joining from McKinsey & Company two years ago. She will continue to report to Burberry CMO Sarah Manley.
Littler's promotion follows the departure of Justin Cooke, who spent almost six years at Burberry as VP of global public relations. Cooke recently became CMO at Topshop.
"We're delighted to announce that Jenna will now take on the strategic management of Burberry's fashion PR and VIP relations, to lead a truly integrated global communications function that will support Burberry in the next phase of its development," said Manley.
Clas Ohlson opens UK transactional website
The website, clasohlson.com, follows "successful" launches in Sweden and Norway. The retailer, which opened its first UK store in November 2008, also plans to open a transactional website in Finland by late summer.
Clas Ohlson UK managing director Mark Gregory said: "Our investment in e-commerce is a vital part of our long-term UK strategy.
"By allowing greater accessibility we will reach even more customers and make their lives a little easier with our extensive product range and focus on customer service."
The website will include services such as 'how to' guides across different interests from DIY to leisure activities and a live web chat with the customer service team.
A spare parts service will also be available to help customers save money and be more environmentally friendly by extending the life span of their products.
U.K. brand Ted Baker and Kate Spade New York to launch first Canadian stores
TORONTO — The wave of foreign retail chains entering Canada is set to yet make another splash with the impending arrivals of Ted Baker and Kate Spade.
British fashion brand Ted Baker London and U.S.-based Kate Spade New York will make their entry into the Canadian marketplace this fall with standalone stores at Toronto's Yorkdale Shopping Centre.
Both brands will open their first Canadian boutiques in the mall's expansion wing in November, with Kate Spade occupying a 1,600 square-foot (148.6 square-metre) boutique, while Ted Baker is slated to have a 3,245 square-foot (301.4 square-metre) space.
Ted Baker opened its first store in Glasgow in 1988, and has since expanded to open international storefronts. The retailer offering an expansive array of apparel and accessories for men and women.
Kate Spade is perhaps best known for its range of signature handbags, but the label also features clothing, jewelry, shoes, stationery and glasses.
The U.K. and U.S.-based companies will be joined at Yorkdale by Ann Taylor and Loft, which are both under the umbrella of New York-based parent company, Ann Inc. The womenswear brands will also be making their first forays into Canada.
The flurry of foreign chains setting up shop in Canada has progressed at a steady clip in recent years. Intermix, Marshalls, Express, Tory Burch, Topshop, Topman and J. Crew are among the U.S. and international brands who have recently established bricks-and-mortar locations.
Minneapolis-based discount giant Target is slated to opens its doors north of the border in 2013.
Retailers missing out on potential £9bn in online revenues
A study reveals that over 75% of retail sites do not have their own social community functions
Photo Credit: William Warby
According to figures by nToklo, a social commerce and recommendations platform, over 50% of retailers do not offer online recommendations to consumers.
UK online retail spending was over £68bn in 2011 and is expected to grow 13% in 2012. However, the study says that retailers could be missing out on billions of pounds by not offering consumers recommendations to other products onsite.
While social media is important to UK retailers, with over 90% having a prescense on Facebook on Twitter only 65% use integration technologies that some social platforms offer, like Facebook connect.
"Presenting users with relevant, timely recommendations has been an understood and valuable part of the traditional retail purchase funnel for a number of years, whether in-store or online," says Anton Gething, nToklo's co-founder and product director. "However, with the explosion in social engagement, recommendation content is no longer provided by the retail brand alone and increasingly consumers are seeking out more 'social' user reviews and recommendations. Therefore, those retailers in a position to offer a cohesive social experience online will be in a position to take advantage of the potential growth in revenue available to them."
73% of sites surveyed do not offer consumers the ability to find or share recommendations through social platforms, which the study suggests could help give retailers a massive boost in revenues.
"The increasing interest in social commerce stems from the natural progression of two trends that have seen tremendous growth in recent years: online shopping and social networking," says Gething. "However, this research shows that social commerce is yet to become the sum of its parts and many businesses are missing out on a potentially significant additional revenue opportunity. In strained times, this additional revenue could provide a much needed lifeline for British retailers."
Huge Qatari retail complex raises $1 billion construction loan
Doha Festival City, a giant retail and hospitality complex being built by a consortium including UAE-based Al Futtaim Group, has raised a 3.7 billion riyals ($1 billion) loan to fund its construction, a statement said on Wednesday.
The development will consist of 260,000 square metres of gross leasable retail space as well as hotels, a convention centre and leisure facilities and will house the first IKEA store in Qatar, the statement said.
The 10-year facility comprises of both a conventional loan and a sharia-compliant tranche. Last November, an executive at the UAE conglomerate had said the company was in the "final stages" of raising a $1 billion syndicated loan facility in Qatar.
Doha Festival City is being built by Bawabat Al Shamal Real Estate Company, a joint venture between Al-Futtaim Real Estate Services, Qatar Islamic Bank, Aqar Real Estate Development And Investment and a private Qatari investor.
QInvest acted as financial advisor and bookrunner to the transaction, with Commercial Bank of Qatar and unlisted Barwa Bank fulfilling mandated lead arranger roles.
Six other Qatari banks – Ahli Bank, Al Khalij Commercial Bank, Doha Bank, International Bank of Qatar,Qatar International Islamic Bank and Qatar National Bank – also joined the deal, the statement added.
The complex is due to be completed by 2015.
Mothercare appoints Domino's Pizza CFO as non-exec director
Mothercare has appointed Lee Ginsberg, the chief financial officer of Domino's Pizza, as a non-executive director and audit chair elect. He will join the Mothercare board on 2 July.
Ginsberg has been CFO at Domino's for the last seven years. Prior to this, he was group finance director at fitness club chain Holmes Place.
Commenting on the appointment, Alan Parker CBE, Mothercare chairman, said: "I am delighted that Lee is joining the Mothercare board, both as a non-executive director and replacing Bernard Cragg when he retires as Chair of the Audit committee at the end of this year. Lee's extensive experience as the finance director of a number of public companies, as well as his consumer and brand experience and particularly his franchising knowledge at Domino's, will be a real asset to Mothercare as we deliver our transformation and growth plan.
"Bernard has served more than nine years on the Board during which time he has provided great financial and business support to the Company and its executive management. On behalf of the Board, I would like to thank him and wish him all the best for the future."
Ginsberg said: "I am excited to be joining the Board of Mothercare plc, and look forward to working with Alan and the other members of the Board in providing support to Simon Calver and his executive team at this important time in the development of the Company."
Turtle to open a store in Italy
Menswear and accessories retailer Turtle is moving to Italy with its first own-store by the end of this month. The store will come up in Italy's Cosenza town to test-market the strategy and if it is successful then the brand would open more such stores in the Italian towns of Como and Milan.
The store, in collaboration with a Milan-based design house, will offer both of company's lifestyle brands – Turtle and London Bridge competing with the private labels offered by hypermarkets in the country. To attract customers, the products will be priced 'affordably' between €15 ($18 or Rs 1,028) and €30 ($37.6 or Rs 2,147).
In India, Turtle competes in the premium and semi-premium segment while London Bridge is its mass market offering. Moving ahead, the company is also looking for partners in South Africa while it has tie-ups with retailers in the Middle East in Dubai, UAE and Bahrain.
According to the company, exports currently account for 4 per cent (or Rs 5 crore) of the group's Rs 122-crores turnover in 2011-12. Other than tie-ups with online retailers such as Myntra and ShopFormal, Turtle has launched its own online shopping portal in May this year.
Turtle also plans to add denims under a different brand name and accessories like eyewear to its portfolio by 2013. It is in talks with two UK-based brands to introduce the denims range but if talks don't get through, Turtle will introduce the range on its own.
McDonald's readies "biggest" London 2012 campaign
McDonald's is spending £10m on its biggest Olympic activation campaign to date with activity celebrating the "personal stories" of the people working at the Games as it eyes a long-term legacy of being known as the "people's restaurant".
The chain, the official restaurant and presenting partner of the Games and an International Olympic Committee partner since 1968, has unveiled details of the marketing campaign to run before, during and after the London 2012 Games conclude in September.
The television, outdoor, social media and experiential activity (see box), dubbed "We All Make The Games" will focus on the people who "make the games happen" such as the McDonald's sponsored customer service representatives.
Alistair Macrow, vice president of marketing for McDonald's UK, says the activity steers clear of the "skill, determination and hard work" of the athletes competing in the Games and instead focus on those playing their part in the Games "away from the glare of the stadium lights" such as the McDonald's sponsored "Games Makers".
Digital activity – its most ambitious yet in terms of reach and breadth, according to Macrow – will gather together tweets, videos and posts to create user generated content about the Games, which many observers have described as the first digital Olympics.
He adds it is hoped that this campaign and McDonald's sponsorship, will help "reinforce what the brand is about in the UK".
"[As official restaurant] we want to demonstrate the great customer service and great food we offer to hundreds of thousands of people. We want to continue the journey that the brand is been on, celebrate our role in British life – that people are welcome everywhere anytime day or night.
"We see ourselves as the people's restaurant and what is being seen as the people's games."
McDonald's"We All Make The Games" activty will include the following:
Before the Games
Outdoor and TV activity to encourage people to support volunteers involved in the Games such as Games Makers.
During the Games
"Guerrilla" film crews will film "the passion and emotion" of people watching the competition at official Fan Parks and city centres around the country. People will be invited to upload their own videos and photographs onto Facebook and the best content will be incorporated into TV advertising including its closing ceremony ad and outdoor advertising including the Piccadilly Lights in London.
Closing ceremony and after
Clips, images and comments gathered throughout London 2012 will be used to celebrate the people who all 'made' the Games after they conclude.
Macrow also took a swipe at critics that question McDonald's sponsorship of the Games for encouraging children to eat foods high in fat and sugar, adding that no other restaurant brand could handle the requirements of being the tournament's official restaurant. "The IOC require a partner that can setup an operation on such a huge scale and guarantee high quality food with a high standard of food safety that is appealing and affordable to a wide population.". The ten-week campaign will run from July. Above the line was led by Leo Burnett London, while Razorfish London worked on the digital activity. Media planning and buying was handled by OMD.
M&S investors urged to make pay protest
A leading corporate governance lobby group is recommending Marks & Spencer investors abstain on the retailer's remuneration report at next month's agm, arguing the retailer's policies could result in excessive payouts.
Pensions Investment Research Consultants (Pirc) acknowledged that M&S had toughened conditions attached to the short- and long-term incentive schemes enjoyed by top management but said it still "represents a structure that can promote future excessive payouts". Last year directors received awards worth more than twice their base salary, a level the governance group considers excessive.
M&S chief executive Marc Bolland, who earns a basic salary of £975,000, received £2.5m in the last financial year and was eligible to cash in shares worth £1.7m that were part of the signing-on package struck when he was poached from Morrisons in 2010.
The "golden hello" worth more than £4m handed to M&S internet guru Laura Wade-Gery when she joined last year from Tesco is also flagged by Pirc as an area of concern. It added: "Pirc does not consider such recruitment bonuses as a justifiable use of shareholder funds."
Investors have had several run-ins with the M&S board over pay. In 2009 former chief executive Sir Stuart Rose and marketing chief Steven Sharp gave up some of the free shares they were entitled to after investors balked at awards worth twice their base salary. On that basis Pirc's advice that shareholders abstain on the pay report is progress for M&S's remuneration committee as in the past they have been advised to vote it down.
Supermarket group Tesco faces criticism ahead of its shareholder meeting on Friday. The Change to Win (CtW) Investment Group, which works with US union-sponsored pension funds, wants the company to amend its report and accounts to reflect concerns about loss-making start-up Fresh & Easy, while Pirc has advised investors to vote against its remuneration report. CtW says it is yet to hear back from Tesco, a delay which it claims has "undermined shareholders' ability to vote on this amendment by proxy, and also raises doubts regarding voting at the agm itself".
Pirc, meanwhile, praised changes made to Tesco's pay policies last year but added: "There is also potential for combined remuneration to be wholly excessive, due to both the size of maximum awards available and the number of incentive schemes in which awards remain outstanding."
The Children's Place to Open Retail Stores in Arab Gulf States
SECAUCUS, N.J., Jun 25, 2012 (GlobeNewswire via COMTEX) — The Children's Place Retail Stores, Inc. PLCE +3.58% , the largest pure-play children's specialty apparel retailer in North America, today announced that it has signed a ten-year franchise agreement with Apparel Group to open stores in the Arab Gulf States of United Arab Emirates, Kuwait, Qatar, Bahrain and Oman. The first stores are scheduled to open in the UAE in September 2012 in Dubai and Sharjah.
Jane Elfers, President and Chief Executive Officer, stated, "We are very excited to continue our expansion beyond North America with a number of stores opening in the UAE this year. The Middle East retail landscape is very well developed and has high potential for our brand. We look forward to working with Apparel Group, which has a proven track record of launching and operating international brands."
Commenting on The Children's Place launch, Mr. Nilesh Ved, Chairman of Apparel Group, stated, "We are eager to launch our partnership with The Children's Place. There is a void in the Gulf States for children's product that combines fashion, quality and value, and we are confident that The Children's Place is the perfect brand to fill that void."
About The Children's Place Retail Stores, Inc.
The Children's Place is the largest pure-play children's specialty apparel retailer in North America. The Company designs, contracts to manufacture and sells fashionable, high-quality merchandise at value prices, primarily under the proprietary "The Children's Place" brand name. As of April 28, 2012, the Company operated 1,062 stores and an online store at http://www.childrensplace.com .
About Apparel Group
Apparel Group is a global fashion and lifestyle retail conglomerate headquartered in Dubai, United Arab Emirates. Today, Apparel Group caters to thousands of shoppers through its more than 655 stores, employing 5,500 multicultural staff covering four continents. In addition to their operations in the UAE, Kuwait, Qatar, Bahrain, Oman, and Saudi Arabia, they have a presence in India, Poland, Singapore, Jordan, Russia, Indonesia, Thailand and Malaysia.
eBay Hires UK Executives to Drive Marketing and Recruit Retailers
eBay has hired two executives to head marketing and to recruit retail businesses in the UK. Tanya Lawler is Vice President of UK Trading, and Amanda Metcalfe is UK and Republic of Ireland Marketing Director.
Lawler's position is a new role created at eBay.co.uk to develop its customer strategy and drive growth in eBay's retail brand business, according to the company's announcement. She was previously Director of Digital and Cross-Channel at Sainsbury's, and was also Group Commercial Director at Argos and Vice President of Retail at Capgemini.
Lawler will be responsible for developing a customer strategy in order to continue to drive growth for eBay's existing retail brand and business seller partners, including Superdry, Bench, House of Fraser, LK Bennett and Comet, as well as to recruit additional retail brands to the eBay marketplace.
Lawler will join eBay in the late fall and will report to Clare Gilmartin, eBay VP of Marketplaces UK & Rest of Europe. eBay's Buyer, Enterprise Sales and Marketing functions will report to her.
In a statement about the Lawler's appointment, Gilmartin said, "Our strategy is to partner, but never compete, with the UK retail industry. In her new role, Tanya will help us ensure that the business and experience of shopping on eBay continues to evolve to meet the demands of the modern shopper."
eBay's new UK and Republic of Ireland Marketing Director Amanda Metcalfe joined eBay as Director of Fashion Retail in June 2011, "helping to grow eBay's most successful category, with over four million shoppers now looking for fashion on eBay.co.uk each month."
Prior to eBay, Metcalfe spent five years as Marketing Director for luxury online fashion retailers My-wardrobe.com and Cocosa.com, as well as heading up online marketing for Sainsbury's. Amanda began her career in marketing roles with some of the UK's largest retailers, including Selfridges where she worked on the re-launch of the brand, as well as Debenhams where she led major database marketing programs, and Laura Ashley.
eBay UK has 180,000 registered businesses and over 100 well-known brands and retailers contributing to its 40 million live listings, with fixed price goods accounting for the majority (61%) of items sold globally.
John Lewis Says Online Growth Means Retailers Need Fewer Stores
John Lewis Partnership Plc said the growth of online retailing means U.K. retailers need no more than 70 stores to gain nationwide coverage amid a tough economy.
John Lewis, which owns 36 department stores and gets about a quarter of sales online, will have "many less" outlets than it had envisaged five or six years ago, Andy Street, managing director of the chain, said in a speech at the British Retail Consortium Symposium in London.
"We believe that national coverage for an online retailer in 2020 is no more than about 60 or 70 shops," he said. "The days for needing 200 to cover the U.K. are clearly history."
Dixons Retail Plc, (DXNS) the U.K.'s largest electronics retailer, said last week that it planned to reduce U.K. store numbers to about 400 from 557, including only about 40 in city centers, as it integrates its store-based and Internet businesses. Companies including Home Retail Group Plc's (HOME) Argos chain are also reducing store numbers, while ramping up their online presence.
"It's all about clicks and bricks together," Street said. Online sales at John Lewis are growing at an annual pace of about 40 percent, the executive said.
John Lewis plans to develop three formats, including a new chain of smaller department stores, the first of which is due to open in Exeter, southwest England, Street said. The retailer will also add home-furnishing outlets, where shoppers can collect orders placed online for items not necessarily sold in the store. It will open fewer of its full-line department stores, or "regional flagships," Street said.
Edcon, Mr Price gear up for online shopping
COMPETITION in the online retailing space has begun to hot up with both Edcon's CNA division and Mr Price yesterday announcing they will be joining the fray.
Traditional (bricks and mortar) retailers in SA have been slower to take their offering online, but there has been a flurry of activity lately to capture some of the online trade and grow market share.
Recent research from World Wide Worx, commissioned by Google, indicates that online retail is becoming increasingly popular in SA, growing about 30% a year.
Yesterday, Mr Price Group confirmed it would be launching its online offer at the end of next month. "Initially, this will comprise a full-range offer in Mr Price Apparel. Other divisions will follow next year," the company said.
About 3,9-million Edgars and Jet account holders will now be able to purchase music, books, games and movies from http://www.cna.co.za. The CNA website has about 10000 eBooks, with the focus on new book releases, Edcon e-commerce executive David Gibbons said.
"Pre-orders for eBooks will also be offered on big-name titles such as the next edition of the Spud series, along with web-exclusive deals and autographed copies."
Gaming would also be a big focus for the company and it would be extending its offering to stationery, toys and cellphones soon, Mr Gibbons said. Customers could return products to a store and did not have to worry about the fuss of shipping back products, he said.
The company will not expand into clothing just yet, but is looking at homeware and the make-up categories now.
"Thanks to Edcon's purchasing power, consumers should see interesting exclusive product offers and good value," Mr Gibbons said.
Avusa online retail GM Ben Williams said online retailing in SA was a difficult space to trade in. "Getting customers is the easy part, loyalty is more difficult. The pond of consumers is small compared to other markets and that makes competition much stiffer in SA."
Last week, exclusives.co.za, the online arm of Exclusive Books, launched a South African first with its sticker programme, which works like a virtual currency.
"It's a form of social book selling," Mr Williams said.
Customers earn stickers by rating or recommending products and, as they accumulate more stickers, they can get discounts on merchandise. Exclusives Books is hoping this will separate it from the competition.
With more than one-million registered customers, kalahari.com is SA's biggest online retailer.
"We look forward to new entrants in the online market as it only helps to grow e-commerce in SA," Liz Hillock, head of marketing at kalahari.com, said.
"In turn, the more customers who realise the convenience of online shopping, the better,"
Online market research company Columinate last year conducted a survey researching South African online shopping habits. It found that 45% of online shoppers surveyed spent more time online last year than in 2010, up from 19%.
The survey found that most online shoppers surveyed preferred to shop at local websites due to a perceived shorter waiting time between purchase and delivery, and because they could make purchases in local currency.
McDonald's pops-up its biggest ever restaurant for Olympics
Would you like to supersize that? In a case of taking fast food to the extreme McDonald's has embraced the pop-up restaurant trend for the 2012 Olympics by building a fast food restaurant of world record breaking size in Stratford, east London, that will last for six weeks.
About 300m from the Olympic Stadium, it will displace Pushkin Square in Moscow as the world's busiest and is expected to serve an estimated 50,000 Big Mac burgers and 180,000 portions of fries – feeding 1,200 customers an hour at its busiest – from the beginning of the Olympics to the closing of the Paralympics.
Once the Games are concluded the two-storey chalet-style building in the Olympic Park will be dismantled and 75% of it re-used or recycled.
From tables and highchairs through kitchen equipment and electric light bulbs, fittings and switches, to timber and air conditioning units, about 5,500 components have been earmarked for reuse in 1,200 existing and new McDonald's restaurants in the UK. Other items, such as those made of plastics, will be recycled. Even the toilets in the 3,000 square metre restaurant are papered with tile-effect vinyl wallpaper to avoid the wastage of about 30 tonnes of broken tiles after the restaurant closes. The building went up in six weeks (although fitting out took considerably longer) and will take four weeks to dismantle.
Jill McDonald, chief executive officer of McDonald's UK, said the move was "a world first" for the chain in its drive to be sustainable, meeting targets specified by the London Organising Committee. During a tour of the restaurant today, she said: "London 2012 is set to be the most sustainable Games ever hosted and this ambition inspired us not only to fulfil our role as official restaurant in the catering operation behind the event, but also to bind sustainability into the heart of our state-of-the-art Olympic Park restaurants."
McDonald's is a longstanding sponsor of the Olympics, with an exclusive deal ensuring it is the only branded restaurant on site. But its dominance has attracted protests from doctors and health experts who believe the Games should not be so closely associated with potentially unhealthy food brands. The company has defended its menu, claiming it offers the widest choice ever offered at an Olympic Games, with healthy options including new iced fruit smoothies and new fruit drink Fruitizz. The menu features products from the other sponsors, however, including a Wispa Gold McFlurry (from Cadbury) and soft drinks from Coca-Cola.
As the official restaurant of the Oympic Games, McDonald's will have four Olympic Park restaurants – two for public use – including this super-size one, another in the Athletes' Village and one in the Media Centre.On the basis of ticket sales information from Locog, managers are predicting that the busiest day of all will be Friday 3 August, when swimming finals will take place along with many major track and field events. The restaurant has been built to seat 1,500 diners – with plenty of seating space outside and on balconies – although it can accommodate up to 2,000 including those waiting to buy food and drink.
McDonald's is aiming to serve all customers within 3 minutes of placing their order, and to avoid queues building up it has designed four new-style express lanes with hand-held order taking and contactless payment. Of other innovations, staff will collect all used cooking oil from the restaurant and recycle it into the special blend of biodiesel that fuels more than half of its UK delivery trucks. And the recycling system is the most sophisticated of any yet used in a McDonald's restaurant.
The 2,000 staff working at the Olympic restaurants have been hand-picked from its top-performing employees and will be the first to wear a brand new uniform designed by Wayne Hemingway, which includes fully close loop recyclable aprons.
McDonald went on: "We'll be serving the broadest menu we've ever provided at an Olympic Games, thanks to the continued evolution of our menu, our longstanding British supply chain, and the technology we have in place to handle the highly complex Olympic catering challenge."
Aldi ireland records over 20% sales growth
Aldi has emerged as a clear winner in terms of sales growth in the ongoing battle for market share, with sales up by 20.4%, according to the latest grocery market data published today by Kantar Worldpanel in Ireland. Kantar Worldpanel's latest figures published by ShelfLife, also show that Irish supermarkets are continuing to capture more of the domestic grocery market at the expense of Northern Ireland's retailers.
UAE developer eyes 2013 opening for Beirut mall
UAE shopping mall developer Majid Al Futtaim (MAF) Properties is eyeing an early 2013 opening date for its first venture in Lebanon.
Beirut City Centre will feature 200 stores spread across three levels, presenting a retail mix tailored to the surrounding residential areas making up Great Beirut, the company said in a statement.
An estimated 25 percent of brands will be unique to the market, making the overall collection of stores distinct from any other shopping experience in the area, it added.
MAF Properties said the mall would include brands such as H&M, Jack Wills and Pottery Barn, and Centrepoint featuring Splash, Shoe Mart, Lifestyle and Babyshop.
Overall, there will be approximately 80 stores dedicated solely to fashion featuring high street brands, shoes, accessories and children's wear, the statement added.
Beirut City Centre will also offer more than 40 restaurants, cafes and speciality stores, including a 16-outlet food court.
A feature will be the mall's open-air, rooftop restaurant area which will have 12 restaurants and cafes, making it a year-round lifestyle destination suited to Beirut's Mediterranean climate.
The mall's entertainment and leisure precinct will be anchored by a Magic Planet family attraction and a multi-screen VOX Cinemas.
"Beirut City Centre will cater to the leisure-oriented lifestyles of residents," said Waddah El Solh, country head – Levant for Majid Al Futtaim Properties.
"The retail mix is designed to meet the daily, practical needs of the community however our vision is to offer an enhanced shopping and leisure experience."
Beirut City Centre will be located in Beirut's Hazmieh district.
Majid Al Futtaim currently operates 11 shopping centres across the Middle East, and is embarking on a 10-year expansion plan during which time it aims to double the size of its business.
Its existing portfolio includes six malls in the UAE, including Mall of the Emirates, home of Ski Dubai, in addition to two centres in Oman, two in Egypt and one in Bahrain.
The company's newest mall, Fujairah City Centre, was opened earlier this month.
Over the next three years, it plans to invest around $1bn annually on new mall developments, which will include a mix of super-regional, community and neighbourhood concepts.
Hugo Boss Opens Taiwan Flagship
NEW IN TOWN: Hugo Boss just inaugurated its new 2,500-square-foot store in the Taipei 101 shopping mall. The brand threw an opening party on Friday, enlisting a "hospitality boat" to sail Taiwan's Keelung Harbor. The event attracted several Asian stars such as Karen Mok and Kirsten Jen.
The new flagship, which opened in May, sells the brand's Boss Black men's and women's collections and the upscale Boss Selection line. Currently, Hong Kong actor Yun-Fat Chow is starring in Selection advertisements.
Louis Vuitton Sets Pop-up Shops
Spots will be sprouting across the globe this summer as Louis Vuitton rolls out seven pop-up shops to mark its capsule collection with Japanese avant-garde artist Yayoi Kusama, reports WWD.
The first shop is set to open inside the Louis Vuitton boutique in New York on July 10, two days before Kusama's touring retrospective opens at the Whitney Museum of American Art. Next, polka dots — Kusama's signature motif — will spring up in Asia, at Pacific Place in Hong Kong, Ngee Ann City in Singapore, and Isetan's Shinjuku branch in Tokyo.
Following those launches, Tokyo, the city Kusama calls home, will get a second location in Dover Street Market in Ginza. Then the two largest Kusama concept stores will open at two department stores: an 860-square-feet shop in Printemps in Paris on August 23; and a 1,375-square-feet boutique in Selfridges in London on August 24. The Paris location will be centered around polka dots, while the London shop will revolve around Kusama's famous pumpkin sculptures.
The pop-up outlets will be open for one to two months, offering a range of spotted trench coats, handbags, and other accessories created with the artist for Louis Vuitton. The European branches will also exclusively offer tentacle-festooned handbags two months ahead of their scheduled October launch date.
Louis Vuitton creative director Marc Jacobs must have been so taken with Kusama when she presented him with a customized a Louis Vuitton Ellipse bag during his first visit to her studio in 2006 that she should get special treatment. Out of the three other artists — Stephen Sprouse, Takashi Murakami, and Richard Prince — Jacobs selected to partner with the brand, Kusama is the only one to have multiple pop-up shops in her line's honor.
Microsoft to open retail store in London
The retail outlet is set to be launched in March 2013, a The Verge report is claiming. The shop will open after an online store is launched in the UK: that's due later this summer.
Microsoft is apparently yet to decide on where it'll open the initial store. More may follow in other UK locations.
At present, Microsoft has 19 stores across the world. Rival Apple has 33 stores in the UK alone.
Google TV to debut in Europe next month
Google TV will make its first foray into Europe next month when Sony launches the NSZ-GS7 Google TV Internet Player in the UK.
Sony will be the first manufacturer to launch Google TV products outside the US, with an initial launch in the UK, followed by Canada, Australia, France, Germany, Netherlands, Brazil and Mexico. The internet-connected set-top box will retail for £200 (€248) in the UK.
Based on Android software, the boxes will let viewers access a range of apps and interactive services optimised for TV, including Twitter and Google-owned YouTube. A dual-sided remote control with QWERTY keyboard on one side and a touch pad on the other side will be supplied with the boxes, which can also be controlled with a smartphone or tablet via the free Media Remote app.
"Expanding the reach and interoperability of the powerful Android platform with Sony's smartphones, tablets and renowned audio and video products, we are proud to continue our relationship with Google through the introduction of the new Google TV Internet Player," said Gildas Pelliet, Sony's European head of marketing. "Entertainment content is available through so many channels and sites, and Google TV helps consumers easily find what they want to watch, listen or play with the freedom of the internet and using the familiar Chrome browser."
Sony and Google will also launch a Blu-ray player with Google TV in October for £280. Both products will compete with the growing number of connected TV devices offered by the likes of Samsung and LG, as well as Apple's Apple TV product that retails for £99 in the UK but has been hampered by a lack of European content.
Giraffe to open first international site in Dubai
The FINANCIAL — High-street restaurant chain Giraffe is to open its first international site this year and plans to continue to expand its brands across the UK.
According to Caterer and Hotelkeeper, the company, which currently operates 47 outlets across the UK, has up to six new sites in the pipeline for 2012 as well as its first international restaurant, which will open in Dubai as part of a franchise deal with Emirates Leisure Retail (ELR).
Giraffe, which recently launched its first grab-and-go brand Giraffe Stop at King's Cross station, opened four restaurants in the past financial year in Bath and Chelmsford and in the Meadowhall and Westfield Stratford shopping centres.
The company has reported earnings before interest, taxes, depreciation, and amortization of £4m for the year to 25 March, with turnover up 18% from £34.4m to £40m.
Chairman Luke Johnson said it was another strong performance from the Giraffe business. "Despite the continued growth in restaurants, there remain many well-populated towns, cities and leisure parks that Giraffe plan to serve over the coming years," he said. "We continue to enjoy a loyal following as a result of a great value menu and legendary customer service."
Managing director Russel Joffe added: "We are excited about the opportunities that the deal with ELR will present over the coming years. We are now almost at 50 UK sites. Our key focus this year is to recruit and retain the best industry talent to support and underpin our continued expansion, both nationally and internationally."
Barclays appoints COO with IT responsibilities
Barclays has appointed Jerry del Missier to the newly-created role of chief operating officer, which includes IT responsibilities.
Del Missier will work with the heads of Barclays' businesses and functions to lead all operations and IT activities across the bank, including those that are part of support functions.
The new appointment will help the bank meet new regulatory requirements, such as those related to ring-fencing, according to Barclays. After the fallout of the global economic crisis, from 2019 banks will have to run their retail and investment arms as completely distinct operations, in the hope that if the investment side of the business fails, the retail side will remain protected.
Santander and Barclays customers hit by online banking problems Barclays sheds 422 IT jobs
Del Missier has been co-chief executive of Barclay's corporate and investment banking division since 1 October 2010. He takes up his new role immediately, and will remain as part of the bank's executive committee.
Meanwhile chief executive Rich Ricci will continue heading up the investment banking division.
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Barclays chief executive Bob Diamond said: "This appointment brings even more management focus on accelerating [our strategic priorities], as well as our progress in making Barclays resolvable and eventually complying with UK requirements on ring-fencing.
"Jerry has an outstanding track record, and long history of engagement in operations and technology."
Last year, del Missier was revealed to be the highest paid senior executive at Barclays, earning a salary and bonus of £14.3 million in 2010. Including shares, his pay package was worth £47.3 million in total.
He joined Barclays Capital in 1997, prior to which he held senior technology, finance and front office positions at the Bank of Boston and the Bank of New England.
Departure of Morrison's Finance Director Hits U.K. Supermarket Hard
The resignation of a finance director is a blow for any company.
But when the finance director is arguably regarded as the best at his job in the sector–I once heard him described as a "hero among the financial community" by a delegate at a retail conference–and is universally heralded as a "safe pair of hands", then the blow becomes even harder to take.
Such is the situation faced today by Wm. Morrison, the U.K.'s fourth-biggest grocery retailer, following the resignation of Richard Pennycook after seven years in the job.
Mr. Pennycook will serve his 12-month notice, but he will be tough to replace. He came to Morrison shortly after its takeover of fellow grocer Safeway, with a brief to turnaround the business following a series of profit warnings.
He–along with former CEO Marc Bolland–succeeded in putting the firm back on track, overseeing large sales increases and a rocketing share price, while being rewarded with big bonus incentives. When Mr. Bolland left in 2010 to take the reins at Marks & Spencer, Mr. Pennycook was seen by many as his natural successor in the top job.
But the CEO role was given to a leftfield candidate in Dalton Philips, who came from Canadian retailer Loblaw.
Mr. Pennycook ploughed on regardless, but the snub, along with long weekly commutes to Morrison's Bradford HQ in the north of England, could be a factor in his decision to focus on a "portfolio career," according to independent retail analyst Nick Bubb.
"I suspect life in Bradford gets him down (he's not a Northerner) and he wants a break," Mr. Bubb said.
Philip Dorgan, an analyst at Panmure Gordon, added: "While he is not leaving the company with immediate effect, this news will not be taken particularly well by the market, in the round."
It wasn't: Morrison was the second biggest faller in the FTSE 100 at mid morning.