Retail news from around the globe
Amazon notches up big quarter
Amazon has posted a blockbuster report for the final quarter for the 2019 financial year, delivering revenue of US$87.4 billion ($130 billion). The report immediately lifted shares by 13 per cent, sending the company’s market capitalisation to more than a trillion dollars.
The company said sales rose by 21 per cent, compared with the same quarter last year, largely due to strong holiday trading.
Additionally, the big quarter came thanks to the continued growth of Amazon Web Services (AWS), which saw a 34 per cent year-on-year increase in sales for a total of US$9.95 billion in revenue for the quarter, Ars Technica reports.
Amazon executives said that the company quadrupled same-day and one-day shipping over last year’s figures, and it credited part of the holiday success to the company’s ability to offer expedient shipping.
CEO Jeff Bezos said in a statement that Amazon now has more than 150 million Amazon Prime members globally, a 50 per cent rise over the past two years.
According to Forbes, the result was timely for investors, who were getting tired of Amazon’s “bottom-line disappointments” and were happy to finally see earnings growth.
Speed pressure hits UPS bottom line
United Parcel Service, the world’s biggest delivery company, has forecast lower-than-expected 2020 earnings due to accelerated spending on weekend delivery and the need for speedier service.
The announcement sent shares down 6.2 per cent, despite remarks by chief executive David Abney to Reuters that the downturn would be very short term and better results were tipped for 2021.
Amazon is UPS’ largest customer, accounting for 11.6 per cent of its revenue for the year. Its insistence of faster delivery has created a need for UPS to hire more drivers and build up its logistics networks quickly.
Epstein link hits L Brands CEO
L Brands CEO Leslie Wexner is said to be in talks to step aside from the role. Wexner, who is 82 years old and the founder of L Brands, is facing scrutiny for employing the disgraced Jeffrey Epstein as a personal financial adviser, according to reports in the New York Times.
L Brands, the owner of Victoria’s Secret, is also in discussions with private equity firm Sycamore Partners for a full or partial sale of the lingerie brand, the Wall Street Journal has reported.
Victoria’s Secret, which is worth about US$6 billion ($8.9 billion), has faced declining sales over the past few years, as online competition increased.
Casper IPO valuation slides
Casper Sleep, the US online mattress retailer whose investors include actor Leonardo DiCaprio and rapper 50 Cent, expects its initial public offering valuation to be well below the roughly US$1 billion it commanded in the last funding round.
In a regulatory filing, the company said it expects the offering of 9.6 million shares to be priced between US$17 and US$19 per share. At the top end of the range, the IPO will raise US$182.4 million ($271.5 million) and give the firm a valuation of US$768 million ($1.12 billion).
Launched in 2014, Casper, along with fellow online mattress retailers such as Purple, Nectar Sleep and Tuft & Needle, has squeezed the industry’s old players.
According to Reuters, investors hope that Casper’s increased popularity with urban millennials will ensure it does not share the same fate as Mattress Firm, the largest US bricks-and-mortar mattress retailer that filed for bankruptcy protection in 2018.
Poles move away from snowboots
Poland’s biggest shoe retailer CCC has shifted its focus to year-round sports shoes rather than traditional winter boots following a succession of mild winters blamed on global warming, Reuters reports.
Dariusz Milek, the company’s founder and one of Poland’s richest men, said CCC had failed to respond to the changing climate in recent years and could ignore it no longer.
“Two years ago and a year ago we thought that the mild winter was a one-off incident. Now we know that it is not,” Milek said.
CCC is present in 23 countries and is the biggest shoe retailer in central and eastern Europe.
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