Retail news from around the globe
Amazon in talks with Indian retailer
Amazon is said to be in exploratory talks to buy an up to 26 per cent stake in Reliance Retail, India’s biggest bricks-and-mortar retailer by revenue.
The company is a unit of Reliance Industries, a conglomerate controlled by India’s richest man, Mukesh Ambani. It was previously negotiating with China’s Alibaba to sell a Reliance Retail stake, but that deal fell apart on price, according to Reuters.
Beside food and grocery items, Reliance Retail focuses on a wide array of consumer goods, consumer durables, travel services, energy, entertainment and leisure products. It had a total of 3837 stores in April 2018 in India with an area of over 17.7 million square feet across 750 cities.
Amazon has been in fierce competition with Walmart’s Flipkart for a bigger share of India’s fast-growing e-commerce market, which Deloitte expects to more than treble to US$84 billion ($123.5 billion) between 2017 and 2021.
Hong Kong protests panic shoppers
Months of increasingly violent protests in Hong Kong are taking a growing toll on the city’s economy, making retailers fear that even Christmas trade may be crushed as tourists and local shoppers are scared away.
Economists say the impact of anti-government protests over the past eight weeks is already worse than in 2014, when a so-called “Umbrella revolution” paralysed the city’s financial district for 79 days, Reuters reports.
Demonstrations are more spread out across the city this time and violence has been more intense, forcing stores and even bank branches to close for prolonged periods.
Retail was already suffering from the effects of the US-China trade dispute with its escalating tariffs.
Next shrugs off the gloom
Fashion chain Next has defied Britain’s retail gloom with a surprise 4 per cent rise in full-price sales, which helped drive its shares to their highest point in a year.
Next, which vies with rivals including Marks & Spencer for the position of Britain’s top clothing retailer, had predicted a 0.5 per cent fall in full-price sales.
Chief executive Simon Wolfson attributed the current success to an overhaul of its practices. “We have improved the stock management in our stores, so have really focused on getting the right amount of stock to the right stores,” he told Reuters in an interview.
Next has more than 500 stores in Britain and Ireland, about 200 stores in 40 other countries and its Directory online business is outperforming rivals.
Lightbulb patents spark lawsuit
Five major retailers have been sued by the University of California in the US District Court in Los Angeles over what it called the “existential threat” of foreign manufacturers infringing schools’ patents, Reuters has reported.
Amazon, Walmart, Target, Ikea and Bed Bath & Beyond were accused of infringing four patents related to “filament” LED lightbulbs, which use 90 per cent less energy and last many years longer than traditional lightbulbs.
These patents relate to what the university called the “reinvention of the light bulb” by researchers at the University of California, Santa Barbara, led by professor Shuji Nakamura, who won the 2014 Nobel prize for physics.
The university is seeking unspecified damages, including royalties, and wants the retailers to enter licence agreements.
Nomura Holdings turns corner
Japan’s top investment bank Nomura Holdings says its first-quarter profit has soared more than tenfold as it seeks to put a troubled year behind it. Last financial year, the bank posted a loss for the first time in 10 years.
In May, Japan’s financial watchdog ordered it to improve internal controls following a serious breach in security related to listing and delisting criteria at the Tokyo Stock Exchange. This leak cost it the opportunity to manage a mammoth sale of shares in Japan Post Holdings as the government looked elsewhere for underwriters.
The bank attributes the current turnaround to structural reform.
China leads way in Puma surge
Puma sales surged by 15.5 per cent on a currency-adjusted basis in the first half of this year, to €2.546 billion ($4.15 billion).
The Asia-Pacific region led the way, with sales soaring 21.6 per cent in the second quarter, closely followed by the Americas, up by 19.7 per cent. Net earnings rose by 46.3 per cent to €144.1 million.
Within Asia, China was the main growth driver for the sportswear brand. Puma opened a net 33 owned-and-operated retail stores there during the first six months and its partners a further 200.
India’s coffee king found dead
VG Siddhartha, a tycoon who beat Starbucks to dominate India’s retail coffee industry but faced personal financial troubles, was found dead on July 31. Reuters reports that police are investigating the death.
Siddhartha, whose family has been in the coffee business for 130 years, became one of the world’s biggest traders after opening Cafe Coffee Day in 1996, earning him the nickname “the coffee king of India”. The company and its subsidiaries employ more than 30,000 people.
But Cafe Coffee Day and its parent organisation, Coffee Day Enterprises, were facing serious disputes with the Indian tax authorities, which raided company offices in 2017. And during this past year, the company has also faced a liquidity crisis and struggled to pay creditors.