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DJs reports that sales tanked in the run-up to Christmas

Trend World News reported that David Jones is the latest retailer to reveal that sales tanked in the run-up to Christmas as consumers, rattled by falling house prices and struggling with higher living costs, stayed away from shopping centres or shopped online. DJs' lacklustre sales follow recent downgrades from Wesfarmers’ Kmart, outdoor clothing chain Kathmandu and womenswear retailer PAS Group and are likely to add to fears about the upcoming profit season and outlook for the full year, following an unprecedented fall in foot traffic in December. Analysts have warned against reading too much into the foot-traffic data, saying it is not highly correlated with Australian Bureau of Statistics retail sales figures, and that the fall in traffic partly reflects the fact more consumers are browsing and shopping online instead of in-store.

Souring Apple sales hurt Kogan

The AFR reported that e-commerce pioneer Ruslan Kogan has blamed Apple and overseas websites dodging GST for a 47% collapse in sales of global brands in the December-half. In a trading update on Thursday, Mr Kogan said sales of Apple products including the new iPhone halved during the six months ending December, offsetting growth from brands such as Samsung, Google, and Garmin and exacerbating the impact of the new GST regime. Excluding Apple, Kogan's sales from global brands, which account for about 40% of group sales but just 18% of profits, rose 8.5%. After previously playing down the threat from changes to the GST-free threshold, Kogan revealed in October that global sales had fallen 27% since the new GST regime came into effect on July 1. Momentum has deteriorated since October, with weak demand for Apple contributing to the slide.

Hayne blamed for retail spending stall

The AFR reported that weak retail spending is another "unintended consequence" of the royal commission, as consumers worried about the value of their homes and small businesses struggling to borrow money cut back on discretionary purchases. Families are now in a situation where they are potentially seeing the value of their house, at least in major metropolitan areas, fall 10 to 15 or even 20%. Foot traffic fell an unprecedented 23% in the last week of December, highlighting consumer uncertainty and the shift away from bricks and mortar to online stores. But, analysts say conversion rates are higher. Pessimistic consumers now outweigh optimistic ones, according to the Westpac-Melbourne Institute Consumer Sentiment Index, which fell 4.7% in January to 99.6 points - the biggest monthly fall in more than three years.

Back to the future

The Hustle reported that Nike has finally achieved its decade-long dream: an auto-lacing smart shoe. For the last 3 years (and much longer from concept-to-product), Nike has been developing a smart shoe with power lacing technology. Next month that shoe hits the market. But the Nike Adapt BB (for ‘basketball’) isn’t just another gimmick to make Marty McFly fans swoon. It’s the world’s first high-performance, digitally connected shoe. Described by Nike’s engineers as an “iPhone that lives under your foot,” the shoe is designed (using a mix of sensors, software, and a connected platform) to actively shapeshift the shoe to each player’s needs. Per Fast Company, the shoe’s hardware will reportedly collect an “unprecedented” amount of data that will allow the next few generations to adapt to your foot in real time, not just through presets.

Shaver Shop on M&A hunt

The AFR reported that the Shaver Shop appears intent on trying to box its way out of a corner. Despite its shares languishing at record lows, the company has been scouting for acquisitions with the help of long-term adviser Canterbury Partners. One potential target is believed to be Hairhouse Warehouse, which is privately-owned and sells all kinds of hair products and asscessories via a network of 130 stores across Australia. Shaver Shop's shareholders would be expected to welcome such an M&A deal provided it could be negotiated on favourable terms. So, it seems it's just a matter of when the retailer will strike in the market.

L'Occitane acquires Elemis for US$900M

Bloomberg reported that luxury cosmetics firm L’Occitane will acquire beauty and skincare brand Elemis for about US$900 million, as the maker of organic lotions looks to expand in the US and UK with its biggest deal on record. The deal is the latest in a spate of acquisitions of high-end skincare brands, with demand for natural beauty products on the rise in Asia - a trend that has also lifted cosmetics giant L’Oreal. L’Occitane said the acquisition will bolster the group’s growth globally, with plans to bring the Elemis label into new markets. The brand has been popular among millennial and Generation X consumers.

China’s latest trade data

Geopolitical Futures reported that according to China’s General Administration of Customs, exports fell 4.4% in December 2018 year-on-year, while imports fell 7.6%. Imports and exports both increased overall in 2018 by 7.1% and 12.9% respectively, but the fact that they tapered off suggests US tariffs are taking a toll on the Chinese economy.  In its attempts to weather the storm, China’s State Administration of Foreign Exchange announced that foreign-exchange quotas for overseas investors in the stock market would be immediately doubled, to encourage foreign capital inflows.

Luxury brands target Sydney and Melbourne

The AFR reported that the rush of international luxury brands seeking a bricks-and-mortar presence on the east coast is showing no sign of slowing down in 2019, despite cracks emerging on prime retail strips like Melbourne's Collins Street. Among those hunting for retail space on Australia's east coast are Swiss watchmaker Audemars Piguet, French trunk and leather goods maker Goyard, French luxury jewellery and watches house Boucheron and high-end English footwear manufacturer Church's, according to well-placed sources.  They join legendary Italian designer Valentino and American fashion icon Tom Ford, German luggage retailer Rimowa, Italian luxury menswear designer Canali and shoe purveyor Roger Vivier, which the AFR reported last year were hunting for prime retail space.

Telcos and NBN on collision course over 5G

The AFR reported that Australia's third-largest mobile provider Vodafone is pushing for the government to release a large swathe of unused 5G spectrum it says could lower the cost of 5G services, in a move that sets them on a collision course with the NBN. Vodafone said the NBN, which has exclusive access to this unused band, is not using a large portion of it, and that there is no justification for preventing other telcos from accessing it for their own 5G networks. But the NBN said it needed the spectrum to provide its fixed wireless broadband, and that as things stand, giving commercial telcos access to the supposedly unused spectrum would cause unacceptable interference. Bottom line, NBN Co is the feeling the heat as 5G technology fundamentally renders the NBN project obsolete, and, therefore, a very costly misstep.

Reject Shop hits earnings targets

The AFR reported that battling retailer, The Reject Shop has overcome soft Christmas trading to achieve its revised profit guidance. Off the back of the results, the business has told shareholders to continue to ignore a $78 million takeover offer from packaging mogul Raphael Geminder. In a trading update delivered yesterday, The Reject Shop said it expects to deliver a net profit of about $10.5 million for the December-half, in line with guidance of between $10-$11 million issued in October last year.

Buyers dump credit cards for buy now, pay later options

The AFR reported that Australians are ditching credit cards in favour of debit cards and buy now pay later services. The latest Reserve Bank of Australia figures, released on Monday, show that as of November 2018 there were 15.97 million credit card accounts, the lowest number since 2015.  KPMG's chief economist said the numbers suggest more people are consolidating their credit card debt into a single balance, as more banks offered interest-free periods to encourage consolidation. Another contributing factor was the rise of buy now, pay later products like Afterpay, he said, with more consumers using Afterpay as an alternative way to immediately access goods and services without having to pay for them upfront. According to regulatory data, in the last financial year two million consumers have used a buy, now pay later service at least once, compared with 400,000 customers two years ago.

Kmart set for revamp

The AFR reported that Kmart will reduce its prices in an attempt to revive sales growth, which came to an abrupt halt in December after five years of uninterrupted gains. Wesfarmers CEO has attributed the trading results to weaker demand for womenswear and everyday items, as well as Kmart's decision to exit low-margin DVDs to make room for popular categories such as homewares. Shares in Wesfarmers fell 2.2% after the group warned that earnings from its department store division would fall about 7% in the December-half.