Around the globe retail news
Two former executives of Britain’s largest retailer, Tesco, have faced Southwark Crown Court in London, charged with manipulating stock prices through the overstatement of profit expectations by some £250 million ($464 million), Reuters reports.
Christopher Bush, 52, who was managing director of Tesco UK, and John Scouler, 50, who was UK food commercial director, both deny charges of fraud by abuse of position and false accounting.
Bush and Scouler are accused of concealing Tesco’s true financial position from its auditors and other employees between February 1, 2014 and September 23, 2014.
Following the discovery of the alleged profit overstatement, Tesco suspended eight senior members of staff, including Bush and Scouler. Shares then lost £2 billion of value and the retailer was plunged into crisis.
Amazon partnership storms Paris
The partnership between Monoprix supermarket chain and Amazon Prime’s AMZ.O food delivery service for Paris has been deemed a huge success by the French retailer and its struggling parent company Casino Group, with orders coming in at two to three times expectations.
So far, the service is only available in parts of Paris, but with the successful launch, Monoprix chief executive Regis Schultz now says he hopes it can be extended across the city and into other areas of France.
The performance of the alliance in its first month is being closely watched since Monoprix was the first French retailer to agree in March to sell its products via Amazon. Competition is looming from such rivals as discounter Leclerc and global player Carrefour.
Monoprix had 2017 sales of €5 billion ($8.14 billion) and a margin estimated by some analysts at 5 to 6 per cent. Monoprix, one of Casino’s most valuable assets, is also under scrutiny as parent Casino faces concerns over its debts and has been selling assets to cut debt.
New-look Ikea sales rise 5 per cent
Swedish furniture chain Ikea has posted a 5 per cent rise in annual sales as its growing online presence and its new approach to bricks-and-mortar retailing begin to bear fruit.
The retailer, long famous for its low-cost DIY merchandise, is starting to change its long-successful format as a response to the rise of online rivals such as Amazon and made.com. Also there have been signs of waning consumer enthusiasm for self-assembled cheap furniture.
The company is now investing in e-commerce and city-centre showrooms, as well as more home delivery and assembly services. In Paris, for example, Ikea is planning a city-centre, full-range showroom, to open in 2019, and in Madrid its new city-centre store is dedicated to living room furniture. In Stockholm there is a kitchen showroom where customers can get planning advice.
Ikea, which still makes most of its sales in Europe, has announced plans to enter Latin America, starting with Chile in 2020 followed
by Colombia and Peru.
Ikea is planning similar changes in Australia, with more home delivery and putting its stores in more accessible locations.
South African chain to drop plastic bags
South African department store chain Woolworths Holdings has joined the international push to end plastic pollution, removing single-use plastic bags from one of its Capetown stores on a six-month trial basis.
As with plastic bans in grocery stores in Australia, customers will have a choice of bringing their own bags or paying a small price for a reusable bag in-store.
South Africa recently raised the levy on plastic bags – to SA12¢ (less than 1¢) but that, according to Woolworths head of sustainability Feroz Koor, did not fix the problem.
“When you consider that Woolworths currently sells about 140 million plastic bags a year, which is between six and seven tonnes of plastic, helping consumers choose reusable bags will make a significant impact on reducing plastic waste,” Koor said.
The retailer, which is the parent company of Australia’s David Jones Ltd, hopes to phase out the bags entirely by 2020.
UK pastry chain in financial bun-fight
The owner of British café chain Patisserie Valerie, a business famous for its cakes not controversy, has announced two serious apparent breaches of financial probity, sending the company into turmoil.
Patisserie Holdings said it had suspended its finance chief Chris Marsh, halted trading in its London-listed shares, and launched an investigation after its directors were notified last week of “significant, and potentially fraudulent, accounting irregularities” in its accounts.
In a separate statement a few hours later, the company said it had learned that the UK tax authority, HM Revenue & Customs, had on September 14 filed a winding-up petition against its main trading subsidiary, Stonebeach Ltd, over £1.14 million ($2.12 million) the tax office says it is owed.
Before its shares were suspended, Patisserie Holdings had a market value of about £444 million. Its brands include Philpotts, Baker & Spice and Flour Power City.
Uniqlo warehouse brings out the robots
In a move that seems to bring the future much closer, Japan’s Fast Retailing has created a warehouse in Tokyo’s Ariake district where robots are now doing nearly all of the work of sorting and inspecting the clothing stored there by popular clothing retailer Uniqlo.
Uniqlo has been able to cut staff at the warehouse by 90 per cent, and it can now operate 24 hours a day.
“We want to introduce automated warehouses around the world as soon as possible,” Fast Retailing chief executive Tadashi Yanai said.
The company has remodeled the existing warehouse on Tokyo’s waterfront with an automated system created in partnership
with Daifuku, a provider of material handling systems.
Fast Retailing said that it had teamed up with Daifuku to counter some of its problems with efficiency – for example, out-of-season clothing sometimes had to be stored for months before delivery.
The new system would ensure more timely delivery of products, minimising storage costs, it said.