Best Buy tips bumper Christmas

Best Buy tips bumper Christmas

Best Buy, the biggest US consumer electronics company, has forecast fourth-quarter profit of up to US$2.75 a share, well above Wall Street estimates, and predicted strong sales for the holiday season.

The crucial period between Thanksgiving and Christmas can account for as much as 40 per cent of annual sales for US retailers. Target and Walmart have already predicted robust Christmas sales despite a general slowing of US consumer spending.

Sales in electrical appliances in particular have been weak across the board. However, Best Buy’s investment in subscription-based repair and tech support services has been a drawcard for customers.

CEO Corie Barry said the company was well prepared for the holidays with new products, strong inventory levels and faster delivery for online purchases.

“The typical Best Buy customer is at or slightly above median income, and this group is currently thriving,” Wedbush analyst Michael Pachter told Reuters.

“At the same time, there are an increasing number of new consumer electronics products that have captured interest – including items in the mobile, smart home and wearables categories – all of which Best Buy excels at.”

LVMH buys Tiffany for $24 billion

French luxury goods purveyor LVMH, owner of Louis Vuitton, Moët Chandon, Hennessy and Givenchy, among many others, has agreed to buy US jewellery icon Tiffany for US$16.2 billion ($24 billion) in its biggest acquisition to date. According to Forbes magazine, the purchase is one of the largest acquisitions ever in the luxury retail business.

The US$135-per-share cash deal will boost LVMH’s smallest business – the jewellery and watch division that is already home to Bulgari and Tag Heuer – and greatly expand its US presence.

And the US jeweller is still in turnaround mode as it tries to rejuvenate its image and lure shoppers online. It has suffered, too, from the effects of the Washington-Beijing trade war, as Chinese shoppers avoid the US and spend more money at home.

But the New York-based brand, founded in 1837 and known for its signature robin’s egg blue boxes, still has a resonance as the go-to purveyor of engagement rings only a handful of rivals can match, such as Richemont-owned Cartier.

“It’s an American icon, which is now going to become a little French too,” LVMH’s chairman and CEO Bernard Arnault told Reuters in an interview.

Sports Direct to change its name

Britain’s Sports Direct International, the sporting goods retailer founded and controlled by Mike Ashley, is to rebrand as Frasers Group.

Sports Direct said the rebranding, which is subject to shareholder approval at a December 16 meeting, is being undertaken “to reflect the changing profile and consumer proposition of the group”.

Sports Direct was formed in 1982 and has become the UK’s largest sporting goods retailer with some 670 stores worldwide, including Australia. Revenue in 2018 was more than £4 billion ($7.6 billion).

In August 2018, the company acquired the UK department store chain the House of Fraser, which had entered into administration. It bought the more than 50 House of Fraser UK stores, the House of Fraser brand and all of the stock in the business for £90 million in cash. Prior to the company entering administration, Ashley held an 11 per cent stake.

Ikea backs renewable energy

Ikea, the world’s biggest furniture group, has announced that it will spend around €100 million ($163 million) to support its direct suppliers as they switch over to renewable energy use.

It also plans to invest around €100 million in projects to remove carbon from the atmosphere through reforestation and forest protection.

It said the investments would be part of its work towards making Ikea climate positive – cutting more greenhouse gas emissions than the chain emits – by 2030.

The target, announced in 2018, encompasses the entire value chain from raw material production to customer purchase – including Ikea’s around 1000 direct suppliers.

“Our suppliers have worked on this agenda for quite some time so we know where there are critical areas,” chief sustainability officer Lena Pripp-Kovac told Reuters, adding that the focus would be on textile, ceramics, glass and metal producers.

The money earmarked for forestry management would be spent in partnerships with organisations and forest owners, she said.