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Global markets struggle to shake off the wobbles

The Wall Street Journal reported that markets continued to struggle to find a new equilibrium after plummeting shares and soaring volatility drove billions of dollars out of global stock markets. The scale of the selloff prompted traders and analysts to look more closely for underlying cracks in the market. 

Bret Blundy’s BBRC sells Bras N Things to Hanes

Bret Blundy’s BBRC sold Bras N Things chain to Hanes (who also operate Sheridan and Bonds brands).  The business has grown remarkably over the last 3 years and the value of the deal was $500 million.  An interesting development for Retail Directions as both: BNT and Hanes use our software platform.  Obviously many factors had to come together to underpin BNT’s success and Retail Directions’ powerful platform was definitely one of them.

NRF forecasts US sales growth in 2018

The NRF released its 2018 economic forecast, projecting that retail sales in the US will grow between 3.8% and 4.4% over 2017. The number includes online and other non-store sales, which are expected to increase between 10% and 12%.  The kind of numbers most Australian retailers can only dream about…

NRF reports slow down in tablet sales

The National Retail Federation reported that tablet shipments dropped by 7.9% in the fourth quarter of 2017, the 13th consecutive quarter of year-over-year declining shipments for the devices, per data from IDC. Apple continues to hold the top spot for tablet shipments, with Amazon and Samsung taking second and third, respectively, IDC's report notes.  Is the market getting saturated?

The bitcoin bubble continues its burst

The bitcoin bubble continues its burst…  The cryptocurrency’s price slid as low as $5,995.58, falling 70% since a record high of near $20,000 in December.  The Wall Street Journal commented that the drop has been intensified in recent weeks following a global regulatory crackdown on the cryptocurrency market.

Les Wexner says online won't kill stores

The Wall Street Journal reported that Les Wexner, the CEO of the parent company of Victoria’s Secret and the teen brand Pink, has said that shoppers want to visit stores to experience the environment and feel the products.  We couldn’t agree more – we never subscribed to the 1910 prediction that by 1920 all retail stores would be gone as everyone would switch to mail orders.  We also agree with his assessment that the internet won’t kill stores.  However, we think that his hope that the fascination with smartphones will fade is misguided.  Barring some major cataclysm setting humanity back 30 years, no one will manage to unplug Humans 2.0 from their mobile, networked chips, aka smartphones.

Aldi plans to open another 30 stores

7 reported that Aldi plans to open another 30 stores in Australia.  Aldi already operate over 500 stores.  The business has been refining its local formula, adding more fresh foods and expanding the store size.  In the past we have repetitively predicted that Aldi would cause major grief for Coles, Woolworths and (particularly) the independents.  More pressure is yet to come…

Asia Pacific arm of Steinhoff is working on refinancing debt

The AFR reported that the Asia Pacific arm of Steinhoff is working on refinancing about $500 million of debt, in parallel to efforts aimed at a management buyout.  This apparently would cost close to $1.5 billion.  Michael Ford, Steinhoff’s AP CEO commented – quite rightly – that the local business can operate without its parents.  Steinhoff’s local brands (Harris Scarfe, Best & Less, Fantastic Furniture etc.) were successful in their own right, before becoming a part of Steinhoff’s stable.

Stock markets in the US seem to be levelling off

Stock markets in the US seem to be levelling off, with a slight rebound towards the end of trading on Tuesday.  However, the prices remain volatile.  The Australian Financial Review commented that we are witnessing a peculiar situation where an overflow of good news spooked the market. People started to worry about an overheated US economy, and possibly inflation and interest rates jumps.  In our view, prematurely.  US economic fundamentals have strengthen, but the US long way to go before the recently freed gears start to move faster.

Bunnings UK, a lesson in "we can do no wrong"

The media have been commenting extensively about the massive loses of Bunnings in the UK.  The Bunnings case illustrates the dangers of the ‘we can do no wrong’ attitude and should act as a stern warning for other retailers - to carefully consider what possibly could go wrong before they embark on acquisitions and other large-scale ventures.  Successful companies include humility in their core values – for a very good reason.

Gary Perlstein attempts to buy City Chic

Manoeuvres around the Specialty Fashion Group are continuing.  According to The Australian, the outgoing CEO - Gary Perlstein - is attempting to buy out the most successful brand (City Chic), with backing from Ian Miller and Geoff Levy.  We wonder whether the board would ever endorse this, because that would leave the rest of the business stripped of its valuable unit.  In our view Gary Perlstein’s consortium would have to pay more than the current valuation of the entire business in order to have a chance of getting its bid approved.