Retail news from around the globe
Ikea bets on Britain
Ikea’s shopping centre business is spending £170 million ($324 million) to buy and upgrade a London mall in its first foray into Britain, betting it can win over a nation increasingly doing its shopping online.
Ingka Centres, an arm of the world’s biggest furniture retailer, said it would put a new, small-format Ikea store in the Kings Mall in London’s Hammersmith district.
This the first time the company has entered a market without leading with a traditional Ikea warehouse.
BB&B hits turbulence
The US-based, international home merchandise chain Bed Bath and Beyond has withdrawn its forecast for fiscal 2019 just two months after new CEO Mark Tritton took charge, despite store revamps, inventory reductions and major staff cuts.
Net sales during the holiday quarter fell 9 per cent to US$2.76 billion ($4.03 billion). Analysts had expected sales of US$2.85 billion. The retailer reported a net loss of US$38.6 million, compared with a profit of US$24.4 million a year earlier.
Tritton, a retail veteran formerly with Target who took charge late last year, said the company would announce a detailed turnaround plan in the coming months. He has already let go six executives, including the chief merchandising officer, chief marketing officer and chief digital officer. Three of the six had been with Bed Bath and Beyond for more than 20 years.
Bed Bath and Beyond was under pressure from a group of activist investors last year for reporting falling sales under its previous CEO Steven Temares, forcing his departure last May.
Macy’s to close 28 US stores
US department store chain Macy’s has announced the closure within the next few weeks of 28 of its US stores, plus one Bloomingdale’s, despite a stronger-than-expected holiday season.
The company reported a small decline of 0.6 per cent in holiday same-store sales. Shares fell 2.2 per cent on the announcement, although investors had been bracing for a sharper drop following an earlier profit warning. Macy’s cut its annual profit forecast in November, citing weak international tourism and sluggish mall traffic.
Analysts were generally unimpressed: “They may have a good season or two in the future, but unless they drastically reinvent their businesses and diversify out of retail, or at least the business of owning inventory, they can’t just keep hoping that accepting Amazon returns or allowing in-store pickup will turn around their fortunes,” Sucharita Kodali, retail analyst at Forrester, told MarketWatch.
UK sees no Boris bounce
UK shoppers are no more willing to open their purse strings in any post-election fervour, reports Mike Coupe, the CEO of Britain’s second-largest retailer, Sainsbury’s.
Despite a thumping win – and a clear majority – for Boris Johnson’s Conservatives, British shoppers seem just as unsettled as before.
“I suspect there won’t be any significant change in customers’ behaviour until we get some line of sight on what the [March 11 government] Budget looks like and how the Brexit settlement works out,” Coupe told Reuters.
Morrisons was the big loser as Britain’s major food retailers endured their worst Christmas since 2014, hurt by intense competition and sustained consumer uncertainty which deterred shoppers from splashing out.
Industry data from market researchers Nielsen and Kantar showed all of Britain’s big four supermarket groups – market leader Tesco, Sainsbury’s, Walmart-owned Asda and Morrisons – suffered sales declines in the 12 weeks to the end of December and continued to lose market share to German-owned discounters Aldi and Lidl.
Louis Vuitton to close HK shop
Louis Vuitton, the world’s biggest luxury goods brand by sales, is preparing to shut its Times Square Mall shop in Hong Kong where protests have hit demand as high rental costs bite, the South China Morning Post newspaper has reported.
The newspaper said the decision to close the shop came after the company failed to reach an agreement with its landlord to cut the rent in the mall outlet, which is one of eight Louis Vuitton shops in the city.
Until now, high-end fashion labels have tended to hunker down in Hong Kong, trying to wait out the anti-government demonstrations that have flared since June.
Hong Kong has long drawn numerous tourists from the Chinese mainland who pick up luxury cosmetics, accessories and clothing at slightly lower prices than at home. But as the protests dragged on, tourist arrivals have slumped and losses began to trickle through to third-quarter earnings.
Hong Kong’s retail sales fell 23.6 per cent from a year earlier in November to HK$30 billion ($5.6 billion), Reuters reports, the tenth consecutive month of declines.
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