Retail news from around the globe
Victoria’s Secret tipped to be sold
Following weeks of intense speculation, it seems that L Brands is about to unload its Victoria’s Secret lingerie business after several quarters of falling sales, a raft of bad publicity and consumer resistance to its sexy “fantasy” image.
Private-equity company Sycamore Partners is believed to be the bidder, and a deal is expected within days.
Rumours of a potential sale emerged in early January when it was widely reported that the controversial and outspoken founder, Les Wexner, was planning to step down as CEO.
One analyst, the Motley Fool, has described the brand as “losing relevance” as customers opt more for comfort, and prefer a company with a more inclusive image and diverse styles. Last year the company discontinued its high-profile televised fashion show and is said to be looking at closing its giant flagship stores as sales decline.
The move would leave L Brands with just one retail business – the fast-growing Bath & Body Works – but analysts question whether L Brands can survive without Victoria’s Secret, which accounts for the vast majority of its US$13 billion annual turnover.
JD Sports may have to sell Footasylum
Britain’s competition watchdog may force JD Sports to sell its Footasylum brand if it does not act to address the regulator’s concerns that consumers could be disadvantaged.
JD Sports acquired its smaller rival last April for £86 million ($167 million) but the deal has been under review from the Competition and Markets Authority (CMA) ever since.
The CMA said it was concerned that the loss of high street competition could mean fewer discounts, clearance sales and promotions, a lower quality of customer service and less choice in stores and online.
JD Sports has strongly denied that there is a problem with the acquisition hurting competition in footwear or athleticwear, calling the findings “fundamentally flawed”. It said that in any case Footasylum would account for less than 2 per cent of its earnings this year.
The company has until February 25 to come up with a proposal to avoid a sale.
UK braces for post-Brexit border checks
Goods coming to Britain from the EU will face import controls from January 1 next year after the post-Brexit transition period ends, senior cabinet minister Michael Gove has announced, potentially disrupting trade worth more than half a trillion dollars.
In response, the British Retail Consortium (BRC) warned the government would have to move fast to get infrastructure in place for the start of 2021. It said that without adequate preparations the availability of goods on shelves would be disrupted, with fresh fruit and vegetables especially vulnerable.
Andrew Opie, BRC director of food and sustainability, told the New European website that ministers needed to set out detailed plans on how the controls would be implemented if the flow of goods to consumers was to be maintained.
“Staff will need to be hired and trained to carry out these checks on the thousands of lorries that enter the UK every day,” he said.
Britain was able to import and export goods seamlessly during its membership of the EU’s customs union and single market. But the government says border controls will be needed to ensure the right customs and excise duties are collected and borders are kept secure.
Bed Bath and Beyond shares plunge
Troubled US homewares retailer Bed Bath and Beyond has announced a 5.4 per cent drop in same-store sales for the first two months of its fourth quarter, largely due to increased promotions, inventory management issues and falling store traffic.
The company said it was “having trouble stabilising the business” and that holiday sales had fallen far short of expectations.
The result disappointed analysts, who were expecting a more rapid turnaround following the appointment of Mark Tritton as CEO in November. Since then Tritton has made some structural changes and overhauled the executive team, and more changes are tipped in the next few months.
Following the announcement, shares fell 25 per cent.
Yahoo HK succumbs to competition
Yahoo Hong Kong is to close its commerce operations, including Yahoo Auctions, Yahoo Store and Yahoo Group Buy, a move it said reflected a “strategic directional change” following “fierce competition”.
The platform will suspend buying and selling features on March 24 and close on May 31. Until then, transaction history, past communications and other relevant data can be downloaded for users.
The peer-to-peer marketplace Yahoo Auction has been running for more than 20 years and was considered a pioneer of Hong Kong’s e-commerce scene.
Throughout the decades, several Yahoo Auctions marketplaces have been terminated around the world, but the concept found success in Hong Kong, Japan and Taiwan. Only the latter two will continue to operate for now.
The company promised that it would introduce “new shopping experiences”.
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