According to The Australian Financial Review, Oroton will be sold to its majority shareholder, Will Vicars. Oroton is fighting a hard battle with its landlords to bring rents down to a reasonable level.
The Australian Financial Review reported that apparently, Super Retail Group is about to announce a new acquisition – outdoor clothing and equipment retailer Macpack, for $135 million. The acquisition is expected to add $100 million to the group’s turnover. Macpack was acquired over two years ago by CHAMP Ventures for $70 million. Not a bad return…
Specialty Fashion Group appoints Daniel Bracken CEO
Specialty Fashion Group has a new CEO, Daniel Bracken, following the departure of Gary Perlstein. Daniel moved across from a deputy CEO role at Myer and he previously worked as a CEO of The Apparel Group. He definitely has a challenging task on his hands, as SFG is undergoing a restructure and a number of bidders have lined up to buy the business or some parts of it.
US President could impose heavy import tariffs on steel and aluminum
Geopolitical Futures reported that over the last 12 months the US authorities have quietly put in place mechanisms, which now allow the US President to impose heavy import tariffs on steel and aluminum. If such tariffs were to be imposed, they would have a material impact on trade between the US and China as well as Canada. It could also mark the beginning of a protectionist spiral.
Tesco developing concept store to compete with ALDI and Lidl
Channel News Asia reported that Tesco in the UK is developing a discount store concept intended to compete with ALDI and Lidl. Apparently, the store would be a separate banner with more limited inventory. Based on our experience, this will most likely fail – to operate a successful discount operation requires a different culture, which cannot be manufactured on demand. Coles’ failed in attempts to succeed in this market illustrate the point – Price Point fiasco, followed by the dilution and the destruction of the BiLo brand.
The Financial Review commented on the Myer woes following the resignation of Myer’s CEO. AFR noted that Garry Hounsell, who assumed the role of Executive Chairman didn’t propose a new strategy for Myer, but promised to accelerate (‘turbocharge’) the existing one. Salomon Lew-backed Premier Investment wasn’t satisfied and it keeps pushing for Myer board to be restructured. On Friday, Premier gained access to Myer’s shareholders register and will be preparing a targeted campaign to gain shareholders support.
The National Retail Federation reported that January retail sales in the US were up 5.4% year-over-year, driven by an improving economy and increased consumer confidence. The results come as the NRF is forecasting that 2018 retail sales will grow between 3.8% and 4.4% over 2017.
According to Inside Retail, Steinhoff APAC has appointed a Chief Restructuring Officer. Last month, Steinhoff said it has “largely addressed” its short-term liquidity requirements, after securing funding from subsidiary companies while its Asia Pacific businesses are continuing “discussions with their banks to secure additional funding by mid-February”.
Geopolitical Futures reported that US consumer prices have risen more than expected – 2.1 percent vs. 1.9 percent. This means the U.S. Federal Reserve will feel pressured to raise interest rates, likely an unwelcome development in U.S. economic growth. The volatility of the stock market last week certainly doesn’t instil confidence either.
Global beauty market grew between 4% and 5% in 2017
L'Oreal CEO Jean-Paul Agon commented that the global beauty market likely grew between 4% and 5% last year and luxury skincare and makeup sales rose by up to 9.5%. Mass-market beauty sales increased by about 3%, led by a few countries including the US, and e-commerce beauty sales booked a double-digit sales increase.
Inside Retail reported that Myer’s CEO, Richard Umbers stepped down at the request by Myer’s Board. The chairman, Garry Hounsell, has been appointed Executive Chairman and he has reaffirmed Myer’s strategy. The Chairman also stated that he didn’t believe that the recent profit decline, even when combined with an impairment, would put Myer at risk of going into administration.
The Australian Financial Review commented that an intensifying multi-year infrastructure construction boom is solidifying the best business conditions on record. Some of the biggest supply companies are now struggling to keep up with the surge in demand. This will invariably have a flow on effect in the wider economy, also impacting wages.