Retail news from around the world
Nordstrom reports 13 per cent loss
Upscale US department store chain Nordstrom has joined its rival Macy’s in reporting a heavy second-quarter loss, despite cost-cuts and massive inventory clearing. Net earnings fell 13 per cent from the corresponding quarter last year to US$141 million ($209 million), or US90¢ per share.
However, analysts had tipped earnings of just US75¢ a share, which was enough to send the company’s stock up 10 per cent on the announcement, although shares are down some 58 per cent year-on-year.
Nordstrom has been aggressively buying back stock over the last year as shares have tumbled, and its share-repurchase program helped compensate for the earnings decline.
Motley Fool stock forecasting website, however, described the numbers as “ugly” and said that they paint a picture of a “fundamentally weak” company.
Sainsbury’s posts least-bad quarter
Sainsbury’s recorded the smallest sales decline among Britain’s big four grocers in the latest 12-week period, showing tentative signs of improvement after nearly two years of underperformance.
Market researcher Kantar said Sainsbury’s sales fell 0.6 per cent in the 12 weeks to August 11. That compared with falls of 1.6 per cent, 1.5 per cent and 2.7 per cent at industry leader Tesco, Asda and Morrisons respectively, Reuters reports.
Sainsbury’s boss Mike Coupe is under pressure to turn around the group’s fortunes after the failure of the Asda merger in April and three straight quarters of declining underlying sales but the company denied that moves were afoot to replace him.
Same-day service boosts Target
Target has beaten expectations for earnings and raised its full-year outlook as its investments in same-day delivery and pickup services increased traffic to its website and stores, sending shares soaring 19 per cent to a record US$103.
The US department store chain’s quarterly profit jumped by 17 per cent. Sales at stores that have been open for at least a year grew 3.4 per cent during the quarter, also exceeding expectations.
The retailer has spent billions of dollars on its push to compete with the ease of delivery provided by Amazon and Walmart, buying grocery delivery firm Shipt, and building in-store pickup and drive-up services.
Led since 2014 by retail industry veteran Brian Cornell, Target has bounced back from a slide three years ago which saw its margins drop, prompting a rethink that has seen it remodel hundreds of stores each year since.
Walmart sues Tesla over solar panels
Giant US retailer Walmart is suing Tesla, accusing it of “widespread negligence” that led to repeated fires of its solar systems. It is asking a court to force Tesla to remove solar panels from more than 240 of its US stores.
Solar energy systems installed and maintained by the electric car maker were responsible for fires at seven locations, with dozens showing hazardous problems such as loose wiring and “hot spots” on panels, according to court papers filed in New York State Supreme Court.
The lawsuit accuses Tesla of having untrained workers putting up shoddy installations and showing “utter incompetence or callousness, or both”, Reuters reports.
The lawsuit is the latest blow to Tesla’s struggling solar business, which it acquired through its US$2.6 billion ($3.9 billion) purchase of SolarCity in 2016. Quarterly installations have plummeted more than 85 per cent since the deal, as Tesla has cut its solar panel sales force and ended a distribution deal with Home Depot.
Amazon reaches out to Israel
E-commerce giant Amazon has launched a Hebrew-language website in Israel to recruit local companies to sell their products on the platform, and speculation is widespread in Israel’s media that Amazon plans to open a local fulfilment centre.
Local consumers currently have to order from Amazon’s international sites.
Shares in Israel’s shopping malls were down as much as 1 per in Tel Aviv last Wednesday following the Amazon announcement.
Miniso signs six new deals
Chinese discount merchandise chain Miniso has signed cooperation agreements with partners from six new countries and regions – the UK, France, Maldives, Reunion Island, Aruba and Curaçao.
Miniso now operates in more than 90 countries and regions, taking it closer to its target of opening “10,000 stores in 100 countries with 100 billion sales volume” by 2022.
Miniso has also been moving into the European market since last year, opening physical stores in Spain, Germany and Ireland.
In overseas markets, Miniso has adopted a differentiation strategy with its products. Nearly 1000 SKUs more in line with European consumption habits and design aesthetics have been developed by the commodity centre team for the European market over the past six months.
Lowe’s bet on quality pays off
US hardware chain Lowe’s has seen its strategy of chasing higher-spending customers begin to bear fruit, as it beat quarterly profit forecasts and gained ground on its larger rival Home Depot.
Lowe’s has been working to attract plumbers, builders and carpenters – who spend more than its core “do-it-yourself” shoppers – by stocking up on higher-end industrial products such as drills and power saws.
The company said its forecasts took the impact of the US-China trade war into consideration.
Lowe’s overall quarterly net sales of US$20.99 billion ($31.1 billion), hurt by a drop in revenue from Canadian stores, was still about US$10 billion shy of Home Depot’s figure.