Retail news from around the globe
Ikea accused of illegal timber
Some of Ikea’s best-selling chairs may have been made from illegally sourced beech trees from Ukraine’s Carpathian forests, home to the last remaining European lynx, brown bear and wolves, according to an investigation from environmental NGO Earthsight.
“Ikea is the biggest consumer of timber in the world, and it’s using illegal wood from Ukraine for some of its most popular products, products that people are buying on a daily basis,” Sam Lawson, director of Earthsight, told the UK site inews.
Although the timber was certified as sustainable by the Forest Stewardship Council (FSC), Earthsight’s investigations claim it was taken illegally from Ukraine while authorities and FSC enforcers reportedly turned a blind eye.
Alleged breaches of regulation include logging during the breeding season and the blocking of vital waterways, the UK’s Channel Four reports.
The Sweden-based furniture giant said in a statement to Reuters that it had begun an independent investigation into the practices in Ukraine, and that it did not knowingly accept illegally logged timber.
UK retailer Go Outdoors gets reboot
UK sport fashion retailer JD Sports, the owner of Go Outdoors, has called in administrators for its subsidiary, saying “the business is no longer viable” under its present structure.
After appointing Deloitte as administrators, JD Sports then bought back assets of Go Outdoors for £56.5 million ($102 million) in what is known as a pre-pack administration deal.
Go Outdoors, which JD first bought for £112 million ($202.2 million) four years ago, has struggled with significant losses as sales declined, and JD had been exploring options for the division while the coronavirus lockdown mounted further pressure, Reuters reports.
Go Outdoors employs about 2400 staff across 67 stores, around the world including in Australia, and specialises in camping equipment, bikes and clothes.
The restructuring, which will also be led by Deloitte, will primarily focus on trying to renegotiate rent terms with landlords.
Walmart reviews prison labour policy
Walmart, the largest retailer in the US, has admitted that a “small number” of its domestic suppliers use voluntary prison labour but that it continues to oppose the use of involuntary prison labour, Bloomberg reports.
According to an emailed statement from Walmart spokesperson Tricia Moriarty, in the US, prison labour is used as a rehabilitation program and is permitted by law. She said that inmates are paid “prevailing wages” and that the programs provide training in marketable skills to help inmates re-enter society.
However, she said the company will review its policy on working with such suppliers in the wake of racial unrest around the US and beyond. Black and Latino inmates vastly outnumber the number of white inmates in US prisons.
India tightens labelling rules
Amazon and Walmart, bowing to India’s regulatory demands, will soon require merchants to display the country of origin for products sold on their platforms in India.
This new measure will single out goods that have been made or developed in China, and is expected to be costly for Chinese businesses. China and India have a tense relationship currently, and recent border clashes leading to the deaths of Indian soldiers have created outrage in India and calls to boycott Chinese goods.
According to India Today, the government has introduced filters on government procurement portal Government e-Marketplace (GeM) that inform the buyer of what is and is not made in India, as well as the percentage of local content in each listed product. The filter may soon be introduced on private e-commerce websites like Amazon and Walmart’s Flipkart as well.
The GeM has issued orders that it is now mandatory for all sellers to mention the country of origin while registering new products. In the case of products that have already been uploaded, relevant sellers have been asked to update the country of origin entry, India Today reports.
Pepco sale delayed by COVID-19
The boss of Pepco Group, the owner of UK discount retailer Poundland, said the coronavirus crisis had delayed the sale of the group by its troubled South African parent company Steinhoff.
Steinhoff, which is still emerging from a 2017 accounting scandal, said last year it was evaluating a range of strategic options for Pepco Group, including a potential public listing, private equity sale or trade sale.
“As far as how that happens and when? I think clearly COVID has thrown things up in the air,” Pepco Group CEO Andy Bond told Reuters.
Bond said that although Pepco expected revenue to remain below historic norms for the remainder of 2020, “it is likely that consumer demand for discount retailing will increase in a period of prolonged economic uncertainty and we are extremely well placed to take advantage of this trend”.
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