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1
Feb-18
Thursday

NRF: economic inertia relief since Trump took office

7
The National Retailer Federation in the US commented that “the nation has seen a welcome relief from economic inertia since Trump took office”.  It is amazing what can be achieved in the economy by just repealing a few highly restrictive regulations and by realigning the tax system.  Possibly this is a clue for Australian politicians?

H&M announces a 34% decline in profits

5
H&M announced a 34% decline in profits.  A few years ago H&M appeared unstoppable, but the ongoing reshuffle in the fashion market caught up with them as well.  There still seems to be momentum in H&M but it is now more related to new store openings than to like-on-like growth.  The evidence that the latter is weak emerges from the intention to close 170 stores in 2018.

Godfrey’s earnings decline by 42%

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According to Inside Retail, Godfrey’s earnings declined by 42%.  Sales declined by 6% for the second half in 2017.  The business has been under pressure from online operators, appliance and department stores.  It looks like it needs a serious refresh…  Switch from corporate to franchise model helped a bit, but clearly this was not enough.
31
Jan-18
Wednesday

JB HiFi shares have grow over 25% since November 2017

5
JB HiFi shares have grown over 25% since November 2017, putting short-sellers into a painful position.  The expected heavy impact of Amazon on the JB business didn’t materialise and the business issued a profit upgrade.  We did expect that the initial impact of Amazon would be minimal, as whatever the portion of brick and mortar that was to be shifted online, has already been shifted.  The battle will be most likely within the online space.

SFG assessing bid from Gary Perlstein’s consortium

4
Specialty Fashion Group is on the market again, assessing a bid from Gary Perlstein’s consortium.  If successful, this would take the company private, making the repair job easier.  The Group suffered a loss last year and announced its intention to close as many as 300 stores.  It would be interesting to see what strategy and resources Gary would deploy to make the shift back to profit.
30
Jan-18
Tuesday

Zara tests concept click and collect London store

5
The Independent in the UK reported that Zara has opened a temporary shop in London that focuses on click-and-collect services, including returns and exchanges of online purchases. The store will stay open while the nearby flagship undergoes renovations.  Could this be an interesting, general idea for other retailers?  A brick and mortar customer service counter for e-commerce?

Electricity prices double in Victoria and SA

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The Australian reported today that electricity prices in South Australia and Victoria doubled over the last 12 months.  This impacts everyone, including retailers.  Some are being hurt badly, if they need refrigeration or freezers to run their business.  The state governments still haven’t learnt that when you reduce supply below the demand (by closing power stations), the rules of basic economics cut in, driving prices up.  To add insult to the injury, the expensive power is also increasingly unreliable, as South Australia and Victoria shift further towards intermittent energy sources.  
29
Jan-18
Monday

US weaning off imported Chinese products

5
Bloomberg reported that Chinese companies are experiencing greater difficulties in getting their products to the US market.  We did suspect that post Trump’s election the US will be making it progressively harder for Chinese goods to come to the US, to wean the country off its current dependency on Chinese products.

IKEA explores IA to connect with customers

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The New York Times commented that technological innovation has allowed Sweden-based furniture retailer IKEA to “explore options for using artificial intelligence and virtual reality to connect with consumers”.  Whatever this means…  The NYT quoted IKEA’s CEO Jesper Brodin saying that "like most retailers, we don't know exactly where we will land at the end of it but our curiosity and willingness to create will be a guide for us." Doesn’t strike us like a solid base for investment.