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Noni B sales growth

Noni B Ltd issued a trading update for FY 2018, with solid like-for-like sales growth (4.5%).  The company also announced an increase in EBITDA to $37 million ($23 million the year before).  Sounds like a solid number, but we do agree with Warren Buffet that EBITDA is virtually meaningless.  It is EBIT that really measures company performance and many organisations tend to conveniently avoid talking about it.

Retail staff with digital and marketing skills in demand


Inside Retail reported that two-thirds of retail employers are likely to give their staff a pay rise of less than 3% in their next review and 10% will not increase salaries at all. The figures come out the 2018-19 Hays Salary Guide, which also notes that retailers will continue to rely heavily on temporary and contract staff. In terms of hiring, at head office the skills in demand trend toward retail professionals with digital and marketing expertise. This aligns with our message that the future of retailing demands an elegant Digital Path to Purchase across all channels, not just e-commerce.

Facebook hit with maximum UK penalty for data leak

Facebook has been hit with an A$895,000 financial penalty over a data leak to political consulting firm Cambridge Analytica, according to a report in the AFR. The fine was issued by Britain's Information Commissioner Office (ICO), which accused Facebook of "not protecting user data and failing to be transparent about how it shard information with third parties".  The ICO will be expanding its investigation into data and politics, looking closely at possible Brexit-related offenses as well. Like we said in yesterday's Pulse covering the same topic, it's just a matter of time before the data infractions by big tech and social media companies are exposed due to mounting regulatory pressure.

Catch Group eyes an IPO

The AFR reports that the founders of online shopping and deal business the Catch Group have engaged with investment banks UBS and Canaccord Genuity to prepare the company for a share-market float. The company and its banks are looking at a potential $200m - $300m IPO. The Catch Group's e-commerce offering is a direct competitor in the Australian market. The business looks to be trying to capitalise on's recent decision to halting shipping to Australia from its US site in protest of the new GST rules for international online purchases.

Environmental baby steps

32 reported that ALDI in the US will use the How2Recycle label across its products in the next two years.  The How2Recycle labels contain instructions whether the package can be recycled, how to recycle the product,  and if any special steps are needed to prepare the package for recycling.  In our assessment the relatively superficial instructions (e.g. "Empty and Replace Cap") won't help much, but given the massive volume of products sold by Aldi, even a minor improvement counts.  

This trash really is treasure

The Hustle reports that e-waste is the world's fastest-growing kind of trash. Globally the total amount of tech-trash is forecast to reach 57m tons by 2021, with only 20% of it being recycled. Perhaps even more interesting is the total value of the e-waste produced each year, totalling at least US$61 billion. For perspective, the amount of gold thrown away equals about 10% of all the gold mined annually. In the US alone, 6.9 tons of e-waste is generated annually - the equivalent of 400 iPhones for every American family. We find it concerning that the environmental impact of this tech-catastrophe unfolds in media silence, while proven ineffective eco-initiatives such as banning plastic bags at supermarket checkouts make the headlines. suffers a data security breach

Digitialcommerce360 reports that Macy’s Inc.’s e-commerce site suffered a data security breach between April and June this year, giving criminals access to credit and debit card information, names and birthdays of “a small number” of and customers. This is the second time this month that a large retailer has suffered an e-commerce data breach, with Adidas AG reporting compromised user data including contact information, usernames, and encrypted passwords. It is becoming ever more critical for cybersecurity to sit at the core of Loss Prevention in a retail enterprise. Cybersecurity cannot be left to IT, it requires a specialised focus as retail becomes ever more entwined with digital.

Facebook faces class action threat

A report in the AFR states that Australian Facebook users are being invited to sue the social media company over the release of personal data to Trump campaign advisor Cambridge Analytica. Litigation funder IMF Bentham has lodged a representative complaint with the Office of the Australian Information Commissioner seeking compensation over breaches connected to the personality quiz "This is my Digital Life". According to the article, users of the app were unaware that it also harvested data from their Facebook "friends" such as their political and religious views. The data, from an estimated 50 million users, was then made available to British firm Cambridge Analytica, which used it for targeted advertising during the 2016 US presidential election. In Australia, 300,000 Facebook users were affected. We expect more and more stories of a similar nature to creep out of the woodwork as social media and technology giants come under increasing political and privacy scrutiny.

Oroton equity valued at nil

Inside Retail reports that struggling accessories retailer Oroton's equity has been valued at nil by an independent expert’s report to creditors and shareholders. The report will now be presented to the NSW courts. Oroton entered into a Deed of Company Arrangement (DOCA) with Manderrah Pty Ltd (Manderrah) in April, under the condition that the business obtains leave from the Supreme Court of New South Wales to transfer 100% of shares in Oroton to Manderrah for nil consideration. As an alternative to a 'break up' sale, the DOCA will secure the future of the business, and its employees, which initially fell into administration last November due to declining sales and high rental costs. Privatisation is the best way forward for the wounded retailer, as a long recovery trajectory doesn't sit well with the sharemarket.  

Labour market defies AI predictions

The AFR reported that a boom in white-collar jobs in Australia is defying fears that the rise of Artificial Intelligence (AI) use cases in many industries will stall job growth. According to the first quarterly Australian Bureau of Statistics release of a "labour account", professional jobs are now just shy of becoming the nation's third-biggest category of employment behind healthcare and retail trade. Professional services grew 13.1% over the same period last year. The article supports our position is that AI is a poorly understood and often misrepresented technology. Over the coming decade, its full potential will not be realised as a replacement for a human workforce, but rather as a complement to it. AI's true benefit is in helping enhance the way we do our jobs.

Lidl flops in the US

Forbes reported on Lidl's poor performance after entering the US market in 2017. At the time, Lidl's promise was to convince US consumers to "Rethink Grocery" and to open 100 stores by the summer of 2018. The grocer was viewed as a threat to the incumbents - Kroger, Albertsons, Walmart and regional grocery retailers. However, 12 months down the road and Lidl has only opened 53 stores and has failed to achieve anything close to a viable, long-term business strategy capable of gaining enough market share to destabilise its competition. The article asks the obvious question - how is it possible that a retailer operating 10,500 stores in 28 countries, with a reputation for being one of the best grocery retailers in the world, could fall so short in the US market? Lidl's business model just doesn't work in the States and the business is yet to adjust. Lidl's results confirm that entering the retail space in the US remains a big challenge, even for excellent operators.

The alternate universe of offices

The Hustle reports that a recent study out of Harvard Business School has found that open plan offices are actually bad for business, decreasing face-to-face colleague interaction by 72%. According to the article, the HBS study is one of many that delivered similar findings. For example, open office plans result in an average 15% decline in productivity, a 50% increase in the likelihood of getting sick and an increase in the number of distractions per hour. Open plan workspaces may be trendy and inexpensive to set up, but it looks like these "benefits" don't come cheap for businesses in the long run.