Retail news from around the globe
New owners rescue Forever 21
US teen fashion retailer Forever 21 has been saved from bankruptcy by three new owners with big plans for its future.
Brand management company Authentic Brands and mall owner Simon Property are to own 37.5 per cent each of the retailer, while Brookfield Property is to buy 25 per cent of the intellectual property and operating businesses. Forever 21 went into Chapter 11 bankruptcy protection last September.
The new owners will seek to keep most of the chain’s 448 US stores open. They also plan to launch new lines of jewellery, footwear and handbags.
Most significantly, the new owners want to expand in Europe, the Middle East and Southeast Asia, along with China. The chain already has 600 stores across 57 countries, the BBC reports.
The Los Angeles-based retailer is looking for a new CEO to drive these plans forward.
Tepid holiday shopping hits Walmart
Walmart has reported a disappointing final quarter, as sales at its US bricks-and-mortar stores rose by just 1.9 per cent, impacted by a shorter holiday season, and revealing the pressure traditional retailers are facing from online shopping.
The US big-box retailer, however, is also challenged with its online offering. It has forecast online sales growth to slow to about 30 per cent this year, down from last year’s growth of 37 per cent. For the quarter, the company reported a 35 per cent increase in online sales – the slowest in nearly two years.
The fourth quarter’s results – and the outlook – are below analysts’ expectations.
Walmart has also said that it expects its fiscal 2021 results to be affected by the corona virus and its impact on imports from China.
Despite a weak holiday for toys and clothes, Walmart’s grocery operation, its largest business, helped drive growth in online sales in the quarter, Reuters reports. Walmart has been pushing speedy delivery and pickup services for groceries as it competes with similar options from Amazon and Target.
Bezos pledges fortune to save Earth
Amazon CEO Jeff Bezos has committed US$10 billion to fight climate change, saying in an Instagram post that global warming “is the biggest threat to our planet”.
The Bezos Earth Fund will begin issuing grants to fund scientists, activists and nonprofits this northern summer as part of the initiative, Reuters reports.
Climate experts say it’s a massive investment that could help give the warming planet a fighting chance – so long as it isn’t squandered, Wired reports.
“It really will shape the whole nature of the climate movement,” Robert J. Brulle, a professor emeritus at Drexel University studying politics and the environment, told the website. “There’s going to be this mad rush for cash.”
Bezos has also pledged to make Amazon carbon neutral by 2040. This will be a huge challenge as the e-commerce company has a massive transportation and data centre footprint, for which it has faced criticism from within its own workforce and others.
The nonprofit CDP told Bloomberg News last year that Amazon was one of the biggest carbon emitters in the world outside the fossil fuel industry.
Corona fallout hits HK retailers
Hong Kong retailers, already reeling from the effects of months of anti-government protests, are now fearing that the corona virus will be their knockout blow.
Retail sales are expected to post their steepest fall on record in January at around 30 per cent. Tourist arrivals in Hong Kong in February fell to under 3000 a day on average, from around 100,000 in January, which was already less than half the traffic from January 2019.
The Hong Kong Federation of Restaurants and Related Trades has told Reuters that more than 100 restaurants have closed. The chair of the restaurant employees union says the restaurant business dropped 30 to 50 per cent during the protests, but the coronavirus had raised that to 70 to 80 per cent.
The Travel Industry Council of Hong Kong told the news agency that a wave of closures of travel agents and related businesses had put more than 40,000 jobs at risk.
New CEO for troubled Dia
Spanish supermarket chain Dia has appointed Marcelo Maia as chief executive of its Brazilian subsidiary to lead a restructuring process in Brazil, and as part of a broader global shakeup.
Dia Brasil has 900 bricks-and-mortar stores across the country, most of them in rented locations; it closed around 300 underperforming stores last year, most of which were franchises, according to Reuters.
Dia, which employs some 6800 people in Brazil, is under investigation for alleged accounting fraud under its previous management, both in Brazil and in its home country, Spain.
The company said it would provide fourth-quarter results in the coming days.
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