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Monthly Archives: February 2017
Starbucks to Close Two Remaining Evolution Fresh Juice Stores
Starbucks is closing its two remaining Evolution Fresh juice stores.
Seattle Met first reported that the two Seattle-located stores will close this spring — a move that officially removes the coffee-chain from the fresh juice bar market, notes Consumerist. However, the company is still slated to sell the juices at its coffee storefronts.
Starbucks (sbux, -0.28%) bought the Evolution Fresh in 2011 for a reported $30 million. Before, the juice company was a wholesaler, selling its products to high-end grocery stores like Whole Foods (wfm, +1.32%). Its first stand-alone stores were opened near Bellevue, Wa., according to Consumerist.
The decision to close the final two stores comes after Starbucks debuted four new juice flavors in March of last year, two of which were a part of its "Protein Power" line.
AO boss steps down
AO CEO and founder, John Roberts, will be replaced by COO, Steve Caunce.
AO World has announced its CEO and founder, John Roberts, is stepping down after nearly 17 years.
Roberts created the online electricals retailer in 2000 and will now move to a new executive role.
Effective immediately, COO, Steve Caunce, will step up to become CEO.
Roberts has always been a big believer of technology innovation, which saw the business quickly launch same- and next-day delivery options as well as develop a significant social media following, thanks to its team of over 100 IT professionals and substantial marketing team.
Last year, AO began trading in the Netherlands earlier this month by leveraging its German infrastructure.
Apple reportedly set to open first Argentina retail store
Apple reportedly set to open first Argentina retail store next year in Buenos Aires
According to a new report from Gizmodo, Apple plans to continue its slow Latin America expansion with a new store in Argentina. The store comes following Apple's first Latin American store in Brazil 3 years ago, which was followed by a new store in Mexico City last year.
The new store in Argentina is said to be located in Buenos Aires and will open in 2018. Plans for Apple's expansion to Buenos Aires follows a growing number of authorized resellers in Argentina. For instance, the Frávega appliance chain announced recently that it would begin marketing Apple products, though the iPhone wasn't included in those plans.
As Gizmodo has learned, the first Apple Store in Buenos Aires will open in 2018. It will be the icing on the cake for a wave of authorized retailers that will open other outlets this year. The Frávega appliance chain announced in November that it would start marketing Apple products (with the exception of the iPhone).
One thing Apple likely hopes its own retail store in Argentina will solve is the problem of tariffs, taxes, and inflation. Currently, a 9.7-inch iPad Pro costs an astronomical $1,418 in the country, which is significantly higher than the $599 it goes for in the United States.
Additionally, Apple is said to be in negotiations to open retail stores in Guadalajara, Monterrey, Santiago de Chile and Lima. It's unclear at this point, however, what the progress of those stores is.
Meanwhile, Apple is also expanding its retail presence in other areas around the world, including Austria, India, and Chicago here in the united States. Additionally, Apple is in the process of renovating its iconic Fifth Avenue retail location to more than double the size of the store. Apple also recently renovated its San Francisco Union Square retail store with a revamped design and 'Genius Grove.'
Apple's retail location in Buenos Aires is said to open at some point in 2018. Specific details on location and opening are still unclear at this point.
Apple officially announced that its $5 billion campus will open in April
Apple has officially announced that its new $5 billion (£4 billion) campus will be open to employees from April.
The Silicon Valley tech giant said that it will take over six months to move more than 12,000 staff to the new campus, which is set on a 175-acre site.
The ring-shaped facility, which Apple is now calling "Apple Park," is several months behind schedule. Construction on the main building and the surrounding parkland will continue over the summer, Apple said.
Apple said the Apple Park will also feature:
a visitor's centre with an Apple Store and a cafe that's open to the public
a 100,000 sq ft fitness centre
secure research and development facilities
two miles of walking and running tracks
and an orchard, a meadow, and a pond.
Apple ParkThe main building is clad in panels of curved glass.Apple
Apple started work on the Apple Park in 2013. Tim Cook, Apple's CEO, told employees last year that Apple planned to move the first groups into the new "Spaceship" campus in January 2017.
Apple also revealed on Wednesday that the new 1,000-seat auditorium will be named the Steve Jobs Theatre, after the company's cofounder, who would have turned 62 this Friday. The auditorium, which is "opening later this year", sits on a hill overlooking the rest of the campus and comes with a metallic carbon fibre roof.
"Steve's vision for Apple stretched far beyond his time with us. He intended Apple Park to be the home of innovation for generations to come," said Cook, in a statement. "The workspaces and parklands are designed to inspire our team as well as benefit the environment. We've achieved the most energy-efficient building of its kind in the world and the campus will run entirely on renewable energy."
Apple Park Steve Jobs theatreThe new Steve Jobs Theatre.Apple
Jony Ive, Apple's chief design officer, added in a statement: "Steve invested so much of his energy creating and supporting vital, creative environments. We have approached the design, engineering and making of our new campus with the same enthusiasm and design principles that characterise our products.
"Connecting extraordinarily advanced buildings with rolling parkland creates a wonderfully open environment for people to create, collaborate and work together. We have been extremely fortunate to be able to work closely, over many years, with the remarkable architectural practice Foster + Partners."
John Lewis sales down 0.2% last week
Fashion sales rose by 1.4% as trade in the category was boosted by the popularity of the retailer's own brand range Modern Rarity. In addition, sales of beauty, wellbeing and leisure products were up 11.2% as customers bought gifts for Valentine's Day.
Electrical and home technology sales were also up, increasing by 0.4%. Growth was driven by sales of communications technology products which increased by 6%.
Sales within the home category declined by 1.5% year-on-year despite an 8.5% uplift in sales of accessories and gifts.
This week John Lewis is launching US furniture and home accessories brand West Elm in its Southampton and Welwyn shops.
Asda sales fall by 2.9% in fourth quarter
The fall marks an improvement for the Walmart owned company on the previous quarter when like-for-like sales dropped by 5.8%.
Walmart president and chief executive Doug McMillon said Asda had faced challenges in the UK market in the past year which it is addressing "with urgency".
Sean Clarke, Asda president and chief executive, said the company had welcomed over 140,000 customers back to Asda in the quarter.
He added: "We are putting customers first and have sharpened our prices, improved our ranges and availability, all with friendly service. While we have a lot to do, it is great to see our colleagues, who really make the difference, engaged in this change in doing what's right for customers."
UK fashion retailer Reiss names Angelides as CEO
LONDON, Feb 20 (Reuters) – British fashion retailer Reiss named former Next (Frankfurt: 779551 – news) executive Christos Angelides as its new chief executive on Monday in a move aimed at allowing founder and chairman David Reiss to scale back his responsibilities.
Reiss, which is majority owned by private equity firm Warburg Pincus, said the appointment was part of a planned succession process. It ends speculation that Angelides might join Marks & Spencer (Frankfurt: 534418 – news) to lead its struggling clothing division.
Angelides, who spent 28 years at Next with 14 as group product director, had a brief stint as president of Abercrombie and Fitch based in the United States.
He will start his new role at the end of March and will resign as a non-executive director of rival French Connection (LSE: FCCN.L – news) on Feb. 28.
"I am delighted that Christos has agreed to lead Reiss … and look forward to working closely with him in order to ensure an orderly succession," said David Reiss, who will remain chairman but give up the CEO role.
Guess focuses on international markets
American clothing brand Guess has decided to venture off into expansion on an international level. Chief executive officer Victor Herrero just confirmed plans to broaden the company's reach in both Europe and Asia.
The company has done well in both North America and South America, expanding in the past couple of years. Guess hasn't done as well in Europe and Asia in terms of performance in its third quarter, as reported by WWD. The quarter, which ended October 29, resulted in a total of 9.1 million dollars in net earnings, which is 3.3 million dollars less than previously. However, the company's revenue rose three percent, totalling 536.3 million dollars. Due to these results, Herrero has confirmed that Guess is expecting to increase its sales in Europe and Asia in the future. According to the publication, projected sales for Europe and Asia would grow, while its sales in America may decline.
Currently, the company has done well in the Americas, as the brand originated in Los Angeles. Known for its iconic, quality jeans, Guess has grown as a staple, iconic brand in America. After recently launching a 35th Anniversary collection, the brand has been able to continue creating unique, high-caliber products. Moving forward,it seems that Guess has plans of increasing sales in all areas on a more global scale, focusing more on international countries.
Amazon to launch own fashion brand, compete with UK high street
Amazon to launch own fashion brand, compete with UK high street
London – Amazon has firmly set its sights on world domination on all aspects of ecommerce and is thought to be investing in its own fashion label.
The company has reported poached senior design and buying experts from Marks & Spencer and Primark, according to Drapers, as it starts to build its own brand in the UK.
While Amazon already sells many fashion brands, including third party suppliers in the UK, it has yet to launch a brand that can compete with the stalwarts of the British high streets, like M&S and Next and online giants Asos and Boohoo.
Richard Lim, chief executive of Retail Economics told the Evening Standard the online giant has the power to 'stir things up'. He said: 'Amazon is a very cash rich business and if they want to launch into a sector, they won't do things by half.'
Amazon has added over 350 new brands across its European sites
Amazon said it sold more than 60m fashion items after adding 350 new brands across its European websites earlier this month, making it one of the fastest growing categories.
It announced profits of 749 million dollars for the final quarter of 2016, a 55 percent increase on the previous quarter. After years of prioritising growth over profits, this was its seventh consecutive profitable quarter.
In 2015 Amazon Amazon opened a photography studio in Shoreditch, a 46,000 square-foot venue with 22 photography bays. The company said it is one of the largest of its kind in Europe and will help it create more than 500,000 images of clothes to its sites every year.
"Our aim is to make Amazon the best place to buy fashion online," said Sergio Bucher, VP of Amazon Fashion EU, in a statement. "The opening of our new fashion studio, in the heart of one of the leading fashion capitals of the world, illustrates our ambitions."
Woolworths sees green shoots in Australia
Woolworths says it is beginning to see some "green shoots" in its Australian operations, with significant changes in store for David Jones and Country Road Group.
However, the retailer warned that despite this encouraging trend, trading conditions in that market would remain difficult for the rest of the year.
CEO Ian Moir said Country Road Group had gone through "a really tough three years".
"We've spent a lot of time in the business. It's really beginning to make a difference.
"We are starting to see green shoots and that's not in just Country Road itself, but also within Witchery. Those two businesses are the biggest and were also the problem children and they are beginning to behave," said Moir.
The Country Road Group houses Country Road, Trenery, Trenery and Mimco.
In the 26 weeks ended December 25, David Jones' sales grew 4% and comparable sales 0.5% in Australian dollars. Country Road Group sales were 0.9% lower than the prior period due to high levels of promotional activity, Woolworths said.
Anchor Capital investment analyst Liam Hechter said Country Road's results were largely expected and were likely to have been more seasonal than structural.
"Management made the point that the performance in the second quarter was stronger than the first, so the disappointing operational performance could possibly be short-lived, although we would have to give the numbers and prospects a thorough interrogation over the coming months before forming a strong conviction on that view," Hechter said.
Management had executed well on some of the guided changes at David Jones, while the big source of synergies — the cross-selling of private label products in David Jones stores — seemed to have disappointed.
"Not enough has passed to make a definitive call on whether the cross-sell of private label will deliver the expected synergies. When Woolworths bought David Jones, investors expected the guided synergies to be delivered in a linear fashion. While this was always unlikely to be the case, we remain cautiously optimistic that management are on the right track in delivering on the guided synergies although it is likely going to take longer than initially anticipated," he said.
Moir said the second half of the year would be similar to the first. "In Australia, consumer confidence is a bit muted. Australians are by nature a bit of a miserable bunch, but their confidence has been dampened by economic events."
Wendy's plans to add 1,000 units by 2020
To get bigger, The Wendy's Co. is getting smaller.
The Dublin, Ohio-based burger chain wants to add another 1,000 locations by 2020, executives told investors on Thursday. One strategy the company plans to use to encourage that growth is a new, more flexible design that will enable Wendy's to go into smaller spaces.
Traditionally, the quick-service chain needed at least an acre of real estate to build its traditional, standalone units. But its new "smart design" can go into much smaller spaces, said Abigail Pringle, Wendy's chief development officer.
"The new designs enable the company to build on half an acre or even a quarter of an acre if needed," Pringle said.
Wendy's currently has just more than 6,500 locations worldwide. It wants to grow to 7,500 units by 2020. The locations would be both in North America, where the brand has commitments from operators to build at least 500 locations, and internationally — where Wendy's wants to grow from 439 locations now to 850 units.
Traditional sites are more difficult to open because real estate is more challenged today than it was a decade ago. One-acre sites in high-traffic areas don't exactly grow on trees. And when they come along, they can be expensive.
The new design, executives said, is $300,000 cheaper than a traditional site.
That's not the only strategy the company is using to expand add locations. Wendy's is also adapting to urban areas.
"We are looking far beyond suburban markets," Pringle said.
And the company is also looking at co-developing with convenience stores and other real estate opportunities, such as inline sites and strip-center end caps. And the company wants to convert vacated buildings — and not just restaurants.
One conversion opportunity, Pringle said, is banks.
"The real estate marketing is changing," she said. "Banks are going less with bricks and mortar. And they already have a drive-thru."
Wendy's discussed its long-term strategy with investors on the same day it preannounced earnings for the fourth quarter ended Jan. 1. The company said same-store sales increased 0.8 percent in the quarter and 1.6 percent for the full year in North America.
Revenue in the quarter fell 33 percent, to $309.9 million, in the quarter, from $464.4 million, due to lost sales from the sale of restaurants to franchisees. Net income also fell, to $28.9 million, or 11 cents per share, from $85.9 million, or 31 cents per share.
Executives at the presentation said they want to increase profitability in addition to adding new locations. Some profitability will come from reductions in general and administrative spending. Wendy's said it wants to cut another $35 million from G&A spending by 2020.
"We're committed to accelerating savings," Penegor said, although he noted that the company is currently developing plans to cut those costs.
Wendy's said Thursday that it added 58 new restaurants worldwide in 2016.
"That was the highest global total since 2005," Penegor said.
To get operators to build new locations, Wendy's isn't just using a smaller design. It's also offering incentives.
In past years, Wendy's would give operators building new units a 2-percent royalty abatement for the new unit for three years. Now the company will reduce costs by 5.5 percent in the first year the location is open, including a 2-percent royalty discount and a 3.5-percent ad fund discount
The abatement is reduced to 4 percent in the second year, including 1 percent on royalty payments and 3 percent on ad fund payments.
"This is about driving net new incremental growth," Pringle said, noting that the company is leveraging its ad fund payments to drive growth. "After year two, there's more money into the ad budget that was not there before."
Wendy's has also used its refranchising deals, and even franchisee-to-franchisee sales, to convince operators to add locations.
The chain has sold more than 1,000 locations to franchisees since 2013, following the sale of 537 locations in the third phase of that effort. Wendy's has reduced its company-owned unit count from 1,427 locations in 2012, or 22 percent of the system, to 330 units now, or 5 percent.
The company has sold many of these locations to operators willing to build new locations.
"We wanted to focus on growth," Wendy's CEO Todd Penegor said. "We're bringing in strong operators with strong balance sheets and with commitments to grow the system."
Wendy's also has a "buy-and-flip" strategy, in which it directs the transfer of franchisee-owned locations to preapproved operators willing to remodel locations and build new units.
"We are the ones playing matchmaker," Pringle said. "We're evaluating existing franchisees interested in leading the system. We want to work with them to find the right buyers."
As part of these strategies, Wendy's now has fewer, larger franchisees. In 2012, the company had 440 franchise companies. Today it has 375. The average size of a franchisee has increased from 11 locations to 15 units.
"Some larger franchise operators have used the opportunity to consolidate the market," Penegor said. "They wanted to control pricing, advertising, they wanted to control development and they didn't want to encroach on someone else. We have a healthier franchise community."
Africa retail giants Steinhoff, Shoprite shelve merger
Shoprite has scrapped plans to merge its South African businesses with Steinhoff's
Shoprite has scrapped plans to merge its South African businesses with Steinhoff's
South African retail firms Steinhoff International and Shoprite Holdings announced Monday they had scrapped plans to merge their local assets to form the continent's biggest retailer.
The plan announced in December 2016 was geared to create a discount retailer worth over $14 billion to target Africa's value conscious consumers.
The companies said in a joint statement they "decided to terminate their negotiations related to the proposed transaction" as their shareholders could not reach agreement.
"The fact that the relevant parties could not reach an agreement in respect of the share exchange resulted in the negotiations being terminated," read the statement.
The proposed ventured was to be called Retail Africa.
Both companies are leaders in the African retail sector.
Shoprite is the continent's largest supermarket with a footprint in 14 African countries, including Nigeria, Africa's largest economy, oil-producing Angola and Zambia.
It was proposed that Steinhoff would sell its African assets to Shoprite in return for a controlling stake in the supermarket chain.
Steinhoff's African businesses include a range of credit-based household goods and the company also has extensive interests in Europe.
E-City opens revamped store in Dubai Mall
E-City, a leading operator of a chain of world-class multi-brand electronics retail stores across the UAE, has inaugurated its newly renovated store in The Dubai Mall in Dubai, UAE.
E-City is the electronics retail arm of Albatha Retail & Home Products Group of Albatha Holding, which is one of the leading private business groups in the UAE, with staff strength over 7,000 and consisting of more than 25 autonomous companies in diversified sectors such as automotive, healthcare, manufacturing, FMCG, engineering, electronics, food and real estate.
The new store best reflects the company's tagline, 'Experience the future of electronics,' as it showcases today's leading innovative brands and their products. The newly renovated store will showcase a wide portfolio of electronic products and accessories–close to 10,000 products across 100 leading brands from drones, laptops, tablets, mobiles to TVs, gaming accessories, electronic toys, wearables and cameras. In total there are eight E-City outlets spread across the UAE.
"We are very pleased to announce the re-opening of our newly renovated outlet in Dubai Mall, which is expected to consolidate our position as the Middle East region's first 'Technology Convenience Store. This new outlet has been carefully designed to uplift the brand's appeal by featuring vibrant new products, a new signage and an improved store plan crafted specifically to the needs of our customers," said Jaouad Dakir, CEO, E-City.
"We would like to give our visitors and customers a truly unique experience–showing them the future of electronics and what it can offer. Looking around the new outlet is already an experience in itself as you will see the strong focus we have placed on innovative gadgets and electronic novelties."
The new E-City store features the company's new rebranding initiative, throwing the spotlight on its new logo and identity, which demonstrates its unique concept of using technology, fixtures, lay-outs and displays that have never been used across today's retail segment. The technology and fixtures used are one of a kind, utilizing European standards.
Digital pricing and features have also been integrated to make it easy for customers to compare products–including QR codes to look up more info about the product on the internet via the mobile phone. Digital screens have been placed strategically around the store to broadcast E-City's latest promotions and novelties. – TradeArabia News Service
Apple Store in Sydney, Australia Reopens After Temporary Closure Due to Alleged Bomb Threat
Apple Store in Sydney, Australia Reopens After Temporary Closure Due to Alleged Bomb Threat
The Apple retail store located on George Street in Sydney, Australia was closed for a brief period of time today due to "a police operation," although the exact reasoning behind the closure remains unclear. Some customers evacuated from the store tweeted claims of hearing employees discussing a "bomb threat," while workers in nearby buildings are referencing some kind of workplace accident responsible for the closure (via Gizmodo Australia).
Stefanel plots UK franchise stores
Italian womenswear brand Stefanel is looking to open up to 15 franchise stores across the UK and Ireland.
Love Brands, the brand's distributor in the UK and Ireland, has teamed up with franchise consultant Peter Danby to recruit potential franchisees. They will work alongside John Lane from London-based retail property advisors Tienda to select locations.
The brand is looking at market towns including Canterbury, Windsor, Tunbridge Wells, Cambridge, York, Harrogate, Dublin and Bath.
Hugo Deane, director of Love Brands, said: "We want aspirational areas that will suit the mid to premium offer. We believe there are 10 to 15 store opportunities across the UK and Ireland but we'll have to see how it goes. We plan on opening three or four stores within the next 12 months."
In the UK, the brand has eight House of Fraser concessions and stores on Regent Street and Covent Garden in London.
It launched wholesale in the UK for spring 17 and has secured 25 doors. Wholesale launched in Ireland for autumn 17 with agent Nuala Henshaw.
Stefanel has 400 retail and franchise stores worldwide.
Debenhams tops government's shame list for underpaying staff
Retailers, restaurants and hotels among a record 360 firms named for shortchanging staff by almost £1m
Sarah Butler and Robert Booth Wednesday 15 February 2017 19.48 GMT
Debenhams was accused of failing to pay almost £135,000 to just under 12,000 workers.
Debenhams was accused of failing to pay almost £135,000 to just under 12,000 workers. Photograph: Ki Price/Reuters
The government has named and shamed a record 360 firms for underpaying their staff, with the list of offenders topped by Debenhams after nearly 12,000 of the department store's workers were short-changed.
The businesses, including large numbers of hair salons, hotels, care homes and retailers, failed to pay either the national minimum wage or the national living wage to more than 15,500 workers, according to the list published by the Department for Business, Energy and Industrial Strategy.
The number of offenders surged as it includes the first group named for failing to pay the national living wage of £7.20 an hour for those over 25, which was introduced last year. The businesses were forced to pay back £995,233 to workers as well as penalties totalling £800,000 to HMRC.
Excuses for underpaying workers included using tips to top up pay, docking workers' wages to pay for their Christmas party and making staff pay for their own uniforms out of their salary.
More than 1,000 firms have now been publicly shamed for underpaying their staff since the name and shame system was introduced in 2013. They have underpaid their staff by a total of more than £4.5m. Fines of more than £2m have been levied in addition to firms being forced to make good the wages owed.
Debenhams was named as the most prolific offender since the naming and shaming system came into force in 2013. The company was hit with a £63,000 fine and forced to pay back nearly £135,000 to nearly 12,000 workers. The company said it had underpaid staff by an average £10 each in 2015 because of a "technical error in its payroll calculations".
A spokesman for the department store said: "As a responsible employer Debenhams is committed to the national minimum wage, and as soon as the error was identified by a routine HMRC audit last year we reimbursed all those affected. We have apologised to all our colleagues affected and have taken steps to ensure it cannot happen again."
The error by Debenhams is embarrassing, but many businesses were found to have underpaid individual staff members by thousands of pounds.
Tasman Ltd, a Harley Street property company that lets space to doctors and dental practices, was the worst offender. It was found to have underpaid a housekeeper by more than £11,000 over a number of years.
Hospitality businesses, including restaurants and hotels, feature in the list most often for underpaying their staff, with 84 employers underpaying 563 workers in total.
Lorenzo Berni was found to have underpaid 29 workers by more than £53,000 at his upmarket Knightsbridge restaurant Osteria San Lorenzo. Only last year Berni's Wimbledon eatery, which is a favourite haunt of tennis stars including Boris Becker, was forced to pay back almost £100,000 to 30 other employees. The company said the problem had occurred while it was dealing with family crises.
Contacted at his luxury Knightsbridge restaurant this week, Berni declined to comment. The restaurateur answered the phone but refused to respond and passed the phone to a colleague, who said only: "We have nothing to say."
Those working in retail and the social care sector were next most likely to be underpaid.
Kate Ashley, a director of Pembrokeshire Care, a home care company in rural west Wales that underpaid 154 carers by £55,000, said the company had miscalculated the amount of travel time their employees should be paid to get to their mostly elderly clients
"We thought we were paying the right amount and the HMRC found that we weren't," she said. "We have put in place a new system of calculation that the HMRC has said it is happy with. The social care sector is under tremendous pressure and we are on tight margins, which are getting tighter all the time."
The TUC general secretary, Frances O'Grady, called on the government to take tougher action on "serious offenders" who flouted the law, including prosecutions and higher fines.
"Minimum wage dodgers must have nowhere to hide. We need to see strong unions in every workplace to stop these abuses from happening," O'Grady said.
The Unite union also called for tougher action against unscrupulous bosses of firms that underpay, including a new "wage theft" offence, as exists in the US, punishable with a jail sentence.
Unite's assistant general secretary Steve Turner said naming and shaming was welcome, but bigger deterrents were needed. Turner said it was "pathetic" that only 13 businesses had been prosecuted for underpayment since 2007. "In America," he said, "bad bosses are jailed and heavily fined for 'wage theft', which is what this is, exploiting workers in such a shameful fashion."
The business minister Margot James said that by naming and shaming the government was "sending a clear message to employers that minimum wage abuses will not go unpunished".
"Every worker in the UK is entitled to at least the national minimum or living wage and this government will ensure they get it," James said.
Lingerie brand Agent Provocateur could be heading for administration
Private equity firm 3i invites bids for company, which has been hit by lacklustre sales and accounting issues
The Agent Provocateur store in London's Soho.
The Agent Provocateur store in London's Soho. It is thought five bidders have tabled bids for the brand. Photograph: Graeme Robertson for the Guardian
Lingerie brand Agent Provocateur could be headed for administration after the appointment of restructuring firm AlixPartners to lead a sale process.
Private equity firm 3i has been exploring options for the future of the company – founded by the son of designer Vivienne Westwood, Joe Corré, and his ex wife Serena Rees in 1994 – since late last year.
The brand has been hit by lacklustre sales and accounting issues. Last November, 3i wrote down the value of its 80% stake by £39m – the private equity firm's largest writedown.
Bids for the company, which 3i previously tried to sell nearly three years ago for as much as £250m, were tabled late last week with about five bidders thought to include Lion Capital, the former private equity owner of La Senza and American Apparel, and Alteri. Advisers were looking for sums in excess of the £30m Agent Provocateur owes to its lenders.
Sources close to the negotiations said Agent Provocateur was a strong brand, but had over-expanded into department store concessions and stores, and a pre-pack administration would enable a potential buyer to acquire the business without some of its liabilities.
In April last year, AlixPartners put upmarket tailor Austin Reed into administration soon after it was appointed to explore opportunities for the future of the business.
It is thought that 3i is looking to finalise a deal prior to the deadline for rent and rate payments due in late February/early March.
Data: Top 50 retailers by sales during 2015/16 financial year
Data: Top 50 retailers by sales during 2015/16 financial year
The top 50 retailers by sales during the 2015/16 financial year
Within the top 10, Aldi has solidified its position and climbed into ninth place.
The discounter's continued strong growth means it is expected to overtake both the Co-op and Boots in the next edition of this ranking. Read our analysis of the data here.
Aldi's progress shunted Dixons Carphone into 10th place, while the Co-op and Boots switched positions.
BHS's collapse last year means it has been removed from this list, while tough trading conditions at Game saw it drop out of the top 50. Selfridges was also just outside the top 50 this year.
These three spots have been taken up by new entrants The Range, Asos and Inditex.
Asos's profile is arguably higher than its 49th position might suggest, but it is easy to forget that it generates such a large proportion of its turnover internationally and it has taken a while for its domestic business to reach the required threshold.
While H&M has had a long-standing presence in this ranking, fellow fast fashion giant Inditex cracked the top 50 for the first time.
The Spanish retailer trades through Zara, Zara Home, Massimo Dutti, Pull & Bear and Stradivarius in the UK, but much of its growth has been driven by Zara, which accounts for just over 90% of its UK sales.
Retailers that have made great leaps over the year include Ocado, H&M and New Look, although the latter is unlikely to maintain its upward trend in next year's ranking given its poor domestic performance in 2016/17 to date.
In contrast to last year, general merchandise discounters such as Poundland, B&M Bargains and Home Bargains had a more muted performance.
Home Retail Group makes its last appearance in the table, with the Sainsbury's acquisition of Argos set to help solidify its position as the second largest retailer in the UK. Despite this, Tesco remains comfortably ahead in first place.
Laura Ashley shares drop 10% as it warns on profits after poor Christmas
Laura Ashley suffered a 29 per cent drop in pre-tax profits in the final six months of 2016, amid falling sales and rising costs.
The homeware and fashion chain warned it expects its full-year profits to come in below estimates, prompting the group's shares to fall by 11 per cent this morning.
In the last six months, Laura Ashley's sales fell by 3.5 per cent on a year ago, as the group failed to attract shoppers over the crucial Christmas period.
Falling profits: Laura Ashley suffered a 29 per cent drop in pre-tax profits in the final six months of 2016
Falling profits: Laura Ashley suffered a 29 per cent drop in pre-tax profits in the final six months of 2016
Tan Sri Dr Koo Kay Peng, Laura Ashley's chairman, said: 'Trading conditions have been demanding during the first six months of the year.
'The board have reviewed the first half results and forecasts for the remainder of the year to 30 June 2017 and, given the continued market challenges, feels that net pre-tax profit for the year will fall below market expectations.'
Laura Ashley is still struggling to appeal to shoppers this year, with like-for-like sales in the six weeks to February 11 down 0.6 per cent.
The group said its first-half profits were also knocked by rising costs after the pound's plunge in value since the EU referendum, as well as the new national living wage, which contributed to a 6 per cent rise in operating costs to £52.3million.
Laura Ashley's chief finance officer, Sean Anglim told the Press Association the group's festive performance was hit as it had one less week of clearance sales compared with a year earlier, which knocked trading for big-ticket items like furniture.
Sales: In the last six months, Laura Ashley's sales fell by 3.5 per cent on a year ago
Sales: In the last six months, Laura Ashley's sales fell by 3.5 per cent on a year ago
He said the firm remained optimistic despite the profit warning, having recently advanced further into two major overseas markets by signing up a new franchise partner in India and launching online in China for the first time late last year.
The group said like-for-like furniture sales dropped 8 per cent in the first half, while decorating sales fell 6.4 per cent and fashion down 3.2 per cent. Online sales grew by 2.1 per cent on a like-for-like basis.
Shares in Laura Ashley are down 5.33 per cent to 17.75p.
Apple Tops 'World's Most Admired Companies' List for Tenth Year in a Row
Apple Tops 'World's Most Admired Companies' List for Tenth Year in a Row
Apple has been awarded the number one spot on Fortune's annual list of the "World's Most Admired Companies." The 2017 list marks Apple's tenth consecutive win as the most admired company in the world according to Fortune, which collected the data from 3,800 executives, analysts, directors, and industry experts to end up with the final ranking.
After Apple, the top five slots are rounded out by Amazon, Starbucks, Berkshire Hathaway, and Disney. Last year, Alphabet ranked in second place but the company has fallen down to sixth in 2017. One of Apple's direct rivals in the hardware and software space, Microsoft, has been placed in the ninth spot in a tie with Facebook.
Ralph Lauren names new executives to new position
Ralph Lauren names new executives to new positions , 2 weeks after CEO steps down
Ralph Lauren Corp. RL, -0.77% named on Thursday Jonathan Bottomley to the newly created position of chief marketing officer, effective April 3. The fashion apparel and accessories company said Bottomley, who was most recently Chief Strategy Officer at Vice Media, will lead the global marketing team and be responsible for Ralph Lauren's brand voice. The company also named Tom Mendenhall to the newly created role of brand president, Men's Polo, Purple Label and Double RL, effective March 29. Mendenhall was most recently chief operating officer at Tom Ford International. All men's brand functions will report into Mendenhall, including design and merchandising. The moves follow Stefan Larsson stepping down as chief executive officer on Feb. 3 after just 15 months in the position, after Larsson and Chief Creative Officer Ralph Lauren couldn't agree about how to evolve the creative and consumer-facing parts of the business. The stock, which tacked on 0.3% in morning trade, has tumbled 29% over the past three months, while the S&P 500 SPX, -0.30% has gained 7.7%.
Canada Goose files for IPO
Coyote fur-trimmed hoods have become near synonymous with Canada Goose, the down-filled parka brand that has taken the world by storm. From the streets of Amsterdam to New York to the characters of the new Fortitude series, everyone living in arctic climates appears to be clad in Canada Goose.
Its international success is the key driver to the company filing for an IPO. In its filing the company said it built a strong foundation evolving into a highly coveted global outerwear brand. Over the past three fiscal years, it has grown its revenue at a 38.3 percent, net income at a 196 percent and Adjusted EBITDA at 85 percent. Over the same period the company has made significant long-term investments in human capital, production capacity, brand building and distribution channels.
In its application the company stated: "We currently generate sales in every major Western European market and, while this is where the brand first achieved commercial success, we believe there are significant opportunities to accelerate these markets to their full potential. In the United Kingdom and France in particular, we have achieved strong traction through our retail partnerships, but have yet to fully extend our wholesale network and are only in the initial phase of executing on our shop-in-shop strategy. In both markets, we launched our e-commerce platforms in September 2016 and intend to establish our owned retail presence in the near future. While the United Kingdom and France are our most developed European markets, we have identified a number of markets with significant near-term development potential, such as Germany, Italy and Scandinavia."
Canada Goose is 70 percent owned by Bain Capital, its investment vehicle. The company hopes its IPO will value the business at 2 billion dollars. For the fiscal year ended March 31, 2016, Canada Goose's revenue was 290.8 million dollars, with a growth of 38.3 percent, as mentioned.
Risks to the business include the expense of expanding into new markets and competition. The brand was sold in 36 different countries through about 2,500 wholesalers at the end of December, the filing shows, and the company plans to expand with more stylistic options as well as lightweight outerwear, rain gear and footwear as new product categories.
Despite the company's transparent manufacturing methods, it has receives regular complaints for its use of fur. On its website Canada Goose notes: Our products are designed and built to protect against the elements in the coldest places on Earth – places where exposed skin can freeze in an instant. In these environments, we believe that fur is the best choice. Having fur trim around a jacket hood disrupts airflow and creates turbulent air which helps protect the face from frostbite.
We understand and respect that some people think animal products should never be used in any consumer products, however we do not share that view. We are committed to providing full transparency about how we make our products, including the ethical sourcing and responsible use of animal products.
Waitrose named the UK's top supermarket
Waitrose has been named the UK's top supermarket in a new Which? Magazine survey of more than 7,000 shoppers.
Shoppers were asked to rate stores based on drivers such as store appearance, ease of finding products and overall quality of fresh products.
When it came to the online ranking, shoppers were asked about relevance of substitutions for products, value for money and delivery driver's service.
Waitrose finished just ahead of Marks and Spencer, with both earning plaudits for their store appearance and quality of own-label and fresh products.
"With concerns over rising prices the competition among supermarkets is fiercer than ever," said Richard Headland, Which? magazine editor.
"While value for money remains a top priority, in-store appearance and the availability of quality and fresh products can also go a long way to satisfying shoppers' needs."
Aldi and Lidl share third place and are the only two supermarkets in the survey to be awarded top marks for value for money
Morrisons is the biggest climber from last year's survey, moving up from eighth to fifth
Asda came last below Tesco (8th) and Sainsbury's (7th), who were ranked lower due to many of customers' favourite products not being in stock, difficulty finding items and low scores on value for money
In the online category, Iceland Online came top for the second consecutive year, with customers particularly happy with convenient delivery slots and friendly drivers
Ocado took second spot ahead of other online competitors including Morrisons, Tesco, Asda, Sainsbury's and Waitrose
Despite finishing runners up in the in-store category, M&S had reason to cheer as its Simply Food convenience stores came top in the first ever Which? convenience store satisfaction survey
Budgens, Nisa and Spar occupied the three bottom places of the convenience store survey
Amazon's business rate to be cut while 500,000 other businesses across UK see rises
Online retail giant Amazon will see its business levy slashed at most of its warehouses across the UK in the next financial, as nearly half a million other businesses across the country will be slapped with an increase in rates.
The first overhaul of business rates, which take effect in April and represent the first change in nearly 10 years, will see companies paying rates which have been calculated to take into account the rise in property prices since 2008.
According to an analysis by business rates specialists CVS, high street retailers in parts of the country are facing rises of up to 150 per cent and many smaller business fear being pushed out of business altogether.
By, contrast, Amazon, which earlier this month reported $748m in profits for the final quarter of 2016 and is already under fire over allegations of tax avoidance, is expected to see business rates fall at six of its nine major distribution centres, according to CVS.
Business rates for Amazon's London head office will increase, but the overall bill for Amazon's nine UK warehouses is set to fall by more than £140,000.
Other online retailers which may benefit from the rate change include Asos and Boohoo.
Following the CVS analysis the Institute of Directors urged the Government to "level the playing field" to help smaller businesses.
Mark Rigby, the chief executive of CVS, said the government made all the right noises back in 2015 but "nothing materialised".
He said: "April will serve a 'hammer blow' to small shops, and the consideration should now be to ensure that they are in fact paying fair and accurate rates.
Next chairman to retire and be succeeded by Michael Roney
Barton, who is 72, joined the Next board in 2002 and took up the chairmanship in 2006. In a statement, Next said that he had made "an outstanding contribution" to the company over the last fifteen 15 years.
Following a search for a successor, Roney has been appointed as an independent non-executive director, deputy chairman and chairman designate with effect from 14 February. He will take up the chairman's role on 1 August.
Roney headed up Bunzl, a FTSE 100 listed distribution and outsourcing business, from 2005 until his retirement in April 2016.
He is currently chairman of Grafton Group and a non-executive director of Brown-Forman Corporation. His previous roles include non-executive director at Johnson Matthey.
Michael Kors opens in Cape Town first store in South Africa
Michael Kors has recently opened its first store in South Africa, in Cape Town at V&A Waterfront Mall. The 2,497-square-foot boutique was designed by the brand's in-house team and features a neutral color palette for a luxurious ambience. The boutique is designed to reflect the label's sophisticated, jet set aesthetic.
Michael Kors Cape Town carries ready-to-wear, footwear and accessories from the Michael Michael Kors label, including handbags and small leather goods. The boutique also offers watches, jewelry, eyewear and a selection of fragrances.
"We chose the V&A Waterfront because it's the top luxury mall in Cape Town, a city renowned for its laid-back glamour," said Michael Kors. "The city represents the mix of sophistication, glamour and ease that defines everything we design."
Michael Kors currently operates 816 retail stores, including concessions. There are 944 Michael Kors stores in total, including licensed stores.
The Victoria & Albert Waterfront Mall is home to a number of retailers and brands including Louis Vuitton, Tom Ford, Versace, Zara, Calvin Klein, Gant, and Jo Malone among others.
Tesco to investigate claims of overcharging in dozens of stores
Tesco accused of overcharging customers
Tesco is to check the prices of all items in every store after an investigation found customers were being short-changed on promotions.
An undercover reporter for BBC Inside Out was overcharged on multi-buy offers at two-thirds of stores visited.
The reporter was charged more than expected in 33 out of 50 stores visited because promotions marked on the shelves were out of date and no longer valid at the tills.
Multi-buy deals were still being advertised on the shelves months after they had expired in some cases.
Martin Fisher from the Chartered Trading Standards Institute said the errors could break the law by falling foul of the The Consumer Protection from Unfair Trading Regulations 2008, according to the BBC.
The supermarket giant will now re-evaluate the price of every item at its 3,500-plus stores across the UK.
A spokeswoman said: "We take great care to deliver clear and accurate price labels for our customers so they can make informed decisions on the products they buy.
"We are disappointed that errors occurred and will be working with the stores involved to reinforce our responsibilities to our customers."
The full investigation will be broadcast in most English regions at 7.30pm on BBC on Monday.
Dis-Chem turnover fails to move investors
The trading update is largely upbeat, but investor enthusiasm for the JSE's retail sector has been tempered
Shares in recently listed healthcare retailer Dis-Chem fell 3.7% on Friday after the release of a trading update for the 22 weeks to end January.
The trading update was largely upbeat, but investor enthusiasm for the JSE's retail sector has been tempered in recent months after evidence of trading strain in certain mainstay companies.
Still, shares in Woolworths, Clicks and Massmart all finished higher on Friday. Market watchers did point out that Dis-Chem had been trading close to an all-time R24.99 high recorded earlier in February.
Dis-Chem reported retail turnover up 14.3% to R6.7bn, while group turnover was up 13% to R7.3bn.
At face value, the retail segment appeared to have performed vibrantly with comparable store growth and sales price inflation for the period coming in at 9.1% and 6.5% respectively.
CJ Distribution, Dis-Chem's wholesale segment, increased turnover 15.2% with sales price inflation averaging just 4.8%.
Dis-Chem CEO Ivan Saltzman reckoned trading was in line with expectations. He was encouraged by the performance of the eight new Dis-Chem stores opened in November.
Saltzman noted the new convenience-focused format had traded at densities that were higher than expected.
The company's Northridge store in Bloemfontein, which was flooded late in 2016, was being rebuilt and would reopen in the second quarter. "Although this had no effect on our comparable turnover number, it did impact both the retail and group turnover numbers by 0,6%," Saltzman said. Direct losses from the Northridge store were fully covered by insurance.
Saltzman said Dis-Chem continued to expand and planned to add another 21 stores in the 2018 financial year. "This new space, together with maturing space within the existing store footprint, is expected to drive strong retail and comparable store growth in the years ahead, both of which are supported by the resilient health and beauty markets that we operate in."
In spite of the market's response to the trading update, Chris Gilmour, an investment analyst at Barclays Wealth and Investment Management, said Dis-Chem remained a "top quality and classy" retail operation.
He conceded that Dis-Chem's market rating looked incredibly expensive. "But this looks like a very special firm, and I would not have a problem buying the share for the longer term."
Zara China closes giant flagship store in Chengdu
Zara China has shuttered its giant three-story, 3000 sqm Chengdu flagship store in what a retail commentator describes a "fine-tuning" of its retail network.
The store, at Lesen Shopping Center, No.31, Zongfu Road, was previously occupied by luxury brands Louis Vuitton and Dior. It opened at the end of 2011 as Zara China's single largest store and closed last weekend.
Pascal Martin, partner with OC&C Strategy Consultants in Hong Kong, said the flagship was "probably a lower performing site".
"Zara recently opened another front nearby, in a trendier part of the city, which seems to be doing well. This move is probably just part of Zara's ongoing normal fine-tuning of its store network strategy in China."
Martin said Zara has already built a strong brand in China and is thus now less dependent on large and expensive brick-and-mortar flagship stores to maintain their brand.
"Also, Zara has built a powerful eCommerce capability in China. Therefore they can continue to be successful with fewer retail outlets than competitors H&M and Uniqlo.
"The resulting lower fixed costs should serve them well during the continued retail slowdown and market saturation. We may see them selectively further reduce the size of their 190-store network or relocate some outlets to stronger locations," he said.
Zara China opened its first store in Hong Kong in 2004, before expanding onto the mainland two years later. It now has more than 190 stores in the country.
New FENDI Kids store opens at Dubai Mall
Founded by Adele and Edoardo Fendi in 1925, the eponymous Rome-based fashion House has gained a new space in Dubai. A playful, bright and stylish new Fendi Kids flagship store has launched on the second floor of The Dubai Mall next to Dolce & Gabbana Kids shop. The new venue has opened its doors to the public in February 2017.
L'Oréal confirms it is considering selling The Body Shop as profits fall
Cosmetics company says it is exploring all options but has not made any decision on future of Sussex-based ethical retailer
Sluggish sales in Saudia Arabia and Hong Kong have affected The Body Shop's overall performance. Photograph: Martin Argles for the Guardian
L'Oréal has confirmed it is exploring a potential sale of The Body Shop as the ethical beauty retailer revealed sliding sales and profits.
The world's largest cosmetics company said it had not made any decision on the future of the Sussex-based retailer, which has more than 3,000 stores in 66 countries, but had "decided to explore all strategic options" in order "to give it the best opportunities and full ability to continue its development".
The announcement confirms reports earlier this week that L'Oréal had appointed bankers to examine a sale of The Body Shop with some private equity suitors already interested.
The French beauty products company bought out the founder, Anita Roddick, in 2006 for £652m in a move that shocked supporters of the ethical firm. Roddick set up the business in Brighton in 1976 to help support her two daughters.
Roddick said she had ensured The Body Shop's own principles were protected under the terms of the takeover, and insisted she could be a "Trojan horse" who could influence the new parent into adopting some of her ethical ideas. However, she died in 2007 and industry watchers believe there is little crossover between her business and L'Oréal's other brands. Some fans of The Body Shop are put off by its links to a vast corporate cosmetics firm.
Last year, The Body Shop tried to reaffirm its ethical principles with 14 targets for 2020, including ensuring all its natural ingredients were traceable and sustainably sourced, compared with just under half today, and that 70% of its packaging did not come from fossil fuels, compared with 30% today.
But the group now faces more competition than when it started out, from more upmarket ethical brands such as Dr Hauschka and Chantecaille, as well as the British rivals Lush and Neal's Yard.
L'Oréal, which owns a plethora of international brands including Garnier and Maybelline, reported on Thursday that The Body Shop's operating profit had dived 38% to €33.8m in the year to 31 December 2016. Sales sank nearly 5% to €920.8m. The pace of decline stepped up in the final and most important quarter of the year – sliding by 6.3% in total.
Reporting its annual results on Thursday afternoon, L'Oréal said The Body Shop sales at established shops had risen 0.6% over the year as it enjoyed good momentum in Europe, especially the UK. Online sales also rose. However, sluggish sales in Saudia Arabia and Hong Kong have affected the business's overall performance.
Saudi's Alhokair plans to build Egypt shopping mall
Saudi-nased Alhokair franchises brands such as Zara and Marks and Spencer in the kingdom.
Saudi-nased Alhokair franchises brands such as Zara and Marks and Spencer in the kingdom.
The board of Egypt's Medinet Nasr for Housing and Development (MNHD) has approved an offer from a unit of Saudi Arabian retailer Fawaz Abdulaziz Alhokair to build a mall at MNHD's Teegan development, the firm said on Tuesday.
Under the proposed deal, Alhokair, which franchises brands such as Zara and Marks and Spencer in the kingdom, will own and operate the mall for 50 years before transferring it to MNHD, who in the meantime will receive a share of the mall's revenues.
MNHD said the new mall would have a gross leasable area of 68,500 square metres and would take three years to construct.
"Such deals should help MNHD to significantly improve on its financial performance and balance sheet, enabling it to unlock significant value from its unutilised land bank," Cairo's Naeem Brokerage said in a note.
The Teegan development is located in the east of the Egyptian capital, across from Cairo International Airport, and will ultimately cover 3.5 million square metres.
New boss vows to overhaul Edcon
The newly appointed chairman of Edcon said the retailer was too important to fail and would be turned around. Gareth Penny, who took up the position on Wednesday, said he was "confident we can continue to make progress in recreating a world-class retailer".
New boss vows to overhaul EdconPenny, the former group CEO of De Beers, said Edcon, which is the largest clothing retailer in SA, had 45,000 employees, 9-million registered customers and was a major player in local malls.
"It will be got right," said Penny, who during his tenure at De Beers was instrumental in reshaping the world's largest diamond company.
The other board members are Bernie Brookes, Rhidwaan Gasant, Daphne Motsepe, Marti Murray, Grant Pattison and Keith Warburton. Brookes, who is CEO, is the only executive of the relatively small board.
Former Massmart CEO Pattison is the only nonexecutive with any significant retail experience, although it did not involve much exposure to clothing. Walmart has failed to make inroads in the local clothing market with Makro and Game failing to crack the market.
Analysts were generally unimpressed by the list of new directors. "It looks as though Bernie [Brookes] doesn't want to be challenged," said Sasfin analyst Alec Abraham.
But Penny said Pattison and Brookes had good hands-on retail experience and as a former chief financial officer of Clicks, Warburton would provide good financial back-up.
He said Motsepe, who is a former Absa executive, and Gasant, who is CEO of Rapid African Energy Holdings, would bring important perspectives to the board. Murray, an American and along with Brookes the only non-South African on the board, "has great experience in dealing with corporate challenges".
Penny said former Edcon CEO Steve Ross and former Woolworths top executive Andrew Jennings, who had been touted as candidates for the role of chairman, would play an advisory role to the company.
Jennings, who is South African, worked in Australia as a consultant for Brookes in his largely successful efforts to turn around leading Australian group Meyers.
The previous Edcon board also had limited retail experience and was dominated by bankers with a sprinkling of miners. As well as diamond retailing, Penny's experience includes mining and banking.
Penny said Brookes had done a good job since he took over in October 2015. "We've made progress but there is still a significant period ahead."
Halfords' commercial boss Emma Fox exits
Fox, who joined Halfords from Walmart's Canada unit, has been at the cycling and car parts retailer for three and a half years and is regarded by some as being instrumental in helping drive its turnaround.
Fox, who also spent a decade in various roles at Asda, will not be directly replaced and her duties will be shared across other executives, Retail Week understands.
In a statement, Halfords said: "We have been reviewing the business to ensure that it's fit for purpose and supports our Moving Up A Gear strategic priorities.
"As a result, we have made the decision to flatten our senior structure, with Emma Fox leaving the business by mutual agreement to pursue opportunities elsewhere."
It is not immediately clear if Fox has another role lined up, but last year she took on a non-executive role at pubs giant Punch Taverns.
"A significant loss"
An industry source told Retail Week: "I think she is a significant loss to that business and a hard act to follow.
"She was responsible for 200 people in three countries and a big driver behind their current performance."
It also understood Fox helped orchestrate Halfords' high-profile tie-ups with Orla Kiely, Bradley Wiggins and Chris Boardman.
Halfords boss Jill McDonald has been driving change at the retailer through its 'Moving up a Gear' strategy – which has included a bid to understand its customers more using data.
Last month, Halfords unveiled a better-than-expected 7% rise in third-quarter like-for-likes, but warned it will have to raise its prices due to Brexit. In its half-year, profits plunged as it felt the impact of a weak pound.
Aldi leapfrogs Co-op to become UK's fifth-largest grocer
Aldi market share hits 6.2%, usurping the Co-op for the first time
The discounter's sales rise 12.4% in the 12 weeks to January 29
Morrisons takes title of fastest-growing big four grocer as sales advance 1.9%
Embattled Asda stems rate of revenue decline to 1.9% during the period
Aldi grew sales 12.4% in the 12 weeks to January 29
The German discounter grew sales 12.4% during the 12 weeks to January 29, propelling its market share up 0.6 percentage points to 6.2%.
That meant it overtook the Co-op for the first time, despite the convenience specialist posting a 2% uplift in sales during the same period.
The mutual's continued momentum was driven by a 7% spike in own-label sales.
Kantar Worldpanel's head of retail and consumer insight Fraser McKevitt said: "Just a decade ago Aldi was the UK's tenth-largest food retailer, accounting for less than 2% of the grocery market.
"Since then the grocer has grown rapidly, climbing the rankings by an impressive five places to hold a 6.2% market share.
"Underpinned by an extensive programme of store openings, the past quarter has seen Aldi attract 826,000 more shoppers than during the same period last year."
Co-op food boss Steve Murrells, who previously told Retail Week it was "inevitable" that its market share would be usurped by Aldi, said: "Our strategy is delivering strong results as we continue to focus on our core convenience business, with the right stores in the right location with the right range.
"According to Kantar, we are the most frequently visited retailer in the UK. Our offer and revised ranging meets the 'little and often' mantra of the modern-day shopper and is tailored to meet the needs of local communities, whether it be top-up shopping or food on the go."
Rivals' performance
According to the Kantar data, Morrisons was the fastest-growing member of the big four during the quarter as it continued its impressive turnaround.
The Bradford-based chain enjoyed a 1.9% increase in revenues, edging its market share up 0.1 percentage points to 10.9%.
Tesco's sales edged up 0.3% across the 12 weeks, while Sainsbury's revenues were flat year-on-year.
Asda's sales continued to decline, but the Walmart-owned supermarket stemmed the rate of decline to 1.9% as new boss Sean Clarke's turnaround plan begun to take hold.
Aldi's discount rival Lidl was the second-fastest-growing chain during the period, registering a 9.4% jump in sales.
Waitrose and Iceland recorded revenue rises of 3.4% and 8.6% respectively as the frozen-food specialist retained its place as the fastest-growing grocer outside of the German discounters.
Co-op rings changes as retail chief Murrells replaces Pennycook
The Co-operative Bank is looking to offload a portfolio of loans
Co-op retail chief Steve Murrells will replace Richard Pennycook as CEO
The executive who helped revive the Co-operative Group, Britain's biggest mutual, in the wake of the biggest crisis in its history is to step down later this year.
The Co-op rushed out a statement on Tuesday afternoon in response to a Sky News report that Richard Pennycook would hand over the reins of the food-to-funerals group to Steve Murrells, the head of its retail business.
Mr Pennycook's departure will come three years after he was handed the daunting task of rebuilding the Co-op's fortunes after a series of governance and operational failings had cast doubt over its future.
An improvement in the fortunes of its food retailing arm and a revival of its historic membership scheme have pointed towards a brighter outlook for the Co-op'.
Its chairman, Allan Leighton, hailed Mr Pennycook as the Co-op's saviour, adding: "In three short years he has rescued and rebuilt our business and restored pride to our 70,000 colleagues and 4.5 million members.
"We owe Richard a huge debt of gratitude and his place in Co-op history is secured."
The news of Mr Pennycook's departure comes less than a year after he asked fellow directors to sanction a big pay cut in a symbolic move which reflected the mutual's transition from crisis to recovery.
Mr Pennycook is to step down later this year
The group said on Tuesday that the next phase of its rebuilding plan would be led by Mr Murrells, who has run its retail business since 2012.
Mr Pennycook will remain a consultant to the Co-op with a specific remit to advise on its relationship with the troubled bank which bears its name.
A black hole in the balance sheet of the Co-op's banking arm led to the group relinquishing overall control of the division in 2013, and paved the way for a radical overhaul of the organisation's governance and structure.
Under Mr Pennycook and Allan Leighton, the chairman, the Co-op has sold a number of businesses, including its pharmacy and farming operations.
"The CEO who is to lead the Renewal phase in 2018 has to be the CEO who builds the plan in 2017," said Mr Pennycook.
"In passing the baton to Steve, I leave safe in the knowledge that the Co-op will be taken forward by a leader who shares our vision of what can be achieved in the future."
A former finance director of Wm Morrison, the supermarket chain, Mr Pennycook joined the Co-op in the same role in 2013.
He was promoted to the top job a year later when Euan Sutherland quit after media coverage of his multimillion pound salary.
Although Mr Pennycook is regarded as having done an excellent job at the helm, he will leave amid unresolved questions about the future of the Co-op Bank.
The succession announcement also comes on the same day that the Co-op relinquished its status as the UK's fifth-biggest supermarket chain to Aldi.
Mr Murrells, who will continue to earn the same £750,000 annual salary in his new role, said: "All the signs are that consumers are looking for a different type of business, one that looks after them and their communities and I truly believe that the Co-op is that business.
"We have amazing colleagues and a growing and more engaged membership.
"Now is our time and we are ready to show the country that good businesses that do good things offer a better future for us all."
The Co-op said Mr Murrells would be able to earn up to an additional £1.5m each year under two incentive plans.
House of Fraser to open anchor store in 2021
Department store chain House of Fraser has confirmed plans to open an anchor store at the new Chester Northgate retail complex.
The 500,000sq ft development project, which is spearheaded by Cheshire West and Chester Council, will see House of Fraser take on a 100,000sq ft unit of retail space over three floors.
Construction of the development will commence in late 2018, targeting an opening of all three phases by 2021.
Chester Northgate will be House of Fraser's second major UK store opening, following Rushden Lakes, which opens this year, since its acquisition by Sanpower Group in late 2014.
House of Fraser has focused on further developing its multichannel proposition, alongside continued investment in its store portfolio and international expansion, including the recent opening of the company's first store in China, Nanjing in December 2016.
Frank Slevin, executive chairman of House of Fraser, said: "We are very pleased to announce that we have signed an agreement to open an anchor store at Chester Northgate. Chester is an exciting location for us, being at the centre of a thriving regional economy. The new store clearly cements our commitment to and vision for the future growth of House of Fraser.
"The growth of our store portfolio and the further development of House of Fraser's multichannel offer provides solid foundations for the ongoing transformation of the business, ultimately driving a great customer experience. I look forward to the store opening in 2021."
Councillor Samantha Dixon, leader of Cheshire West and Chester Council, said: "We are delighted to have secured House of Fraser, one of the UK's top department stores, as an anchor tenant for the new Northgate development in Chester."
Rumour mill: Morrison's and Sainsbury's to merge?
Could rumoured merger create an online giant and usher in a new era of grocery?
Could rumoured merger create an online giant and usher in a new era of grocery?
The passing of UK supermarket pioneer Ken Morrison this week has sparked new rumours of a merger between Sainsbury's and Morrison's which, if it comes to pass, would spark a revolution in home grocery delivery.
That's the opinion of e-delivery specialists ParcelHero; that it would bring together three leading e-commerce platforms, Amazon, Argos and Ocado. A combined relationship between these three would be a force to be reckoned with and may well bring about the online food shopping revolution that has been looming for some time.
It breaks down like this: Sainsbury's is the owner of Argos, which in the UK has recently introduced a same-day delivery service. Meanwhile, Morrison's works hand-in-hand with Ocado, the online-only grocery retailer, and also with Amazon for that company's Amazon Prime Now food delivery service.
David Jinks, head of consumer research at ParcelHero, explains the potential: "The bringing together of these brands presents huge home delivery opportunities," he says.
"Despite repeated conjecture of an Ocado-Amazon merger, the three leading digital retailers have always been rivals. For them to be pushed into collaboration is exciting for the future of food and goods retailing and deliveries. The potential to have all our produce and consumer goods ordered and delivered same day, or even within the hour, would be a godsend for busy shoppers."
Sports Direct buys French Connection stake as battle looms
Mike Ashley's discount retailer gains stake in future of ailing fashion chain, which is under pressure over governance
Sarah Butler
A French Connection store in London
French Connection is under pressure to make acquisitions to meet its growth targets. Photograph: Hannah McKay/Reuters
Mike Ashley's Sports Direct has taken control of an 11% stake in French Connection, setting up a potential power struggle over the future of the ailing fashion chain.
The 10.7m shares, controlled via a complex form of derivative known as a contract for difference, would give Sports Direct the power to disrupt any takeover bid for the retail group.
It is not clear whether Sports Direct, which has a history of taking strategic stakes in related companies including Debenhams, JD Sports and the online specialist Findel, is interested in making a bid itself. It is understood there has been no contact between the sports group and French Connection about the share acquisition.
French Connection said in a statement: "We note that Sports Direct has taken long-term significant stakes in a number of British retailers in recent years, and see this investment as a vote of confidence in the true potential of our company. We look forward to working with them more in the future."
Sports Direct is under pressure to make acquisitions to boost profits to meet its growth targets, and some industry insiders believe it would fit well with Sports Direct's fast-growing Flannels fashion business. Flannels already stocks French Connection products in its 13 stores and five more stores are set to open soon, several in former BHS outlets.
But Stephen Marks, who founded French Connection in 1972, still owns a near-42% stake and will be key to deciding the future of the business.
Meanwhile, the founder of the Dunelm furniture chain, Will Adderley, last year bought an 8% stake in French Connection through his private investment vehicle.
Marks is currently fighting off pressure from an activist shareholder to surrender his dual role as chair and chief executive as the business continues to nurse heavy losses.
Gatemore Capital Management, a US hedge fund that has built an 8% stake, has joined forces with other investors OTK and Zoar Invest to control 15% of French Connection shares.
The retailer is in its fifth loss-making year and Liad Meidar, a managing partner at Gatemore, said it was time to "rip off the Band-Aid".
He accused Marks of overseeing a "tremendous decline in value". The retailer reported a pre-tax loss of £7.9m for the six months to 31 July and its shares have plummeted in value by 57% since May 2014.
On Thursday Meidar welcomed Sports Direct's investment in French Connection, although he said Gatemore had not been in contact with the sports retailer and did not know its intentions. "What is encouraging is that a retailer that understands the value of brands has taken a seat at the table.
"It is encouraging they obviously see the value we see. At this point I can't see how their participation can't help."
H&M targets expansion in SA
Hennes & Mauritz says it has an aggressive expansion strategy in place to expand on strong sales in SA
While Hennes & Mauritz (H&M) may have delivered an impressive full-year performance in SA amid a constrained consumer environment, the Swedish company's group results show that global retail is struggling as much as the local sector.
H&M reported South African sales of about R1bn last year from its fewer than 10 stores. In the fourth quarter of its 2016 financial year, H&M local sales grew by 111% in rand terms. H&M opened its doors in SA in 2015.
"We had another fantastic festive season in SA and our customers seem to like what we offer — fashion and quality at the best price in a sustainable way," said H&M SA communications manager Amelia-May Woudstra. "We currently have nine stores in SA with five in Gauteng and are planning on expanding our offering throughout SA."
"We see a lot of potential in the South African market and have an aggressive expansion strategy in place. We will be opening another two stores in Nelspruit at the Ilanga Mall and in Polokwane at the Mall of the North," said Woudstra.
For the year ended November 2016, H&M's group net income fell 11% as a result of increased markdowns during the year and a stronger dollar that made purchasing costs higher. Group sales rose 6%, not unlike the low sales growth figures posted by local retailers.
The world's second-largest fast-fashion clothing retailer also revealed that it would be scaling back on its global expansion efforts. The prior target was to increase the number of stores by 10%-15% annually.
H&M's presence extends to 64 markets worldwide, of which 35 have online platforms.
There are finally enough H&M stores in the world, H&M says
H&M stores have been spreading across the world like a fast-growing mold. For at least a decade, the fast-fashion retailer has increased stores by 10% to 15% annually, sometimes squeezing them in at a preposterous density: In New York in 2015, the chain opened a 63,000-square-foot behemoth that was literally across the street from another H&M (and just down the street from still another).
But the company says it's finally time to ease off. Sales are slowing, and those physical stores no longer serve as the profit machines that turned the chain's chairman into Sweden's richest person.
In reporting its 2016 earnings, which saw sales rise 6% for the year, the company yesterday said it is replacing its brick-and-mortar expansion target with a new sales target of 10% to 15% annual growth. This new bullseye includes in-store and—importantly—online sales. Like pretty much every other retailer, H&M acknowledges that more dollars are moving to e-commerce, and that it already has plenty of stores selling its ultra-cheap clothes.
The world's largest H&M (for now) at Herald Square
The world's largest H&M at Herald Square, seen from an H&M across the street. (Marc Bain)
While physical stores are far from dead, their value is changing as the retail landscape shifts. Increasingly they have to offer customers experiences to be worthwhile, because if all shoppers want is a place to buy things, they can do that on the internet. Zara, which is H&M's big fast-fashion rival, said last year that it would pull back on store expansion to focus more on its online sales.
And H&M's physical stores aren't bringing in the profits they used to. A report by analysts at Morgan Stanley last year pointed out that the profit H&M stores bring in isn't keeping pace with their rapid proliferation. The analysts worried H&M was reaching a "mathematical tipping point," which could cause profits to fall sharply by 2020.
Clothing retailers with less healthy businesses have been shuttering their physical stores like crazy: See Macy's and other department stores that analysts think need to shut hundreds of locations to restore their sales-per-square-foot productivity.
H&M, which operates more than 4,300 stores worldwide, has evidently gotten the message that populating the earth with more stores isn't going to keep adding more profit. Still, it's not slamming the brakes on entirely: In the year ahead, the company plans to open around 430 new stores, entering new markets in Kazakhstan, Colombia, Iceland, Vietnam, and Georgia, among others. That's about the same number of stores it opened in 2016, and represents roughly 10% growth of its current portfolio—in line with its former target.
But the indication is that sort of brick-and-mortar expansion won't continue for much longer. H&M also plans to enter six new markets online in 2017, focusing on Asia. Shoppers in 35 of the 64 markets H&M serves could already browse and purchase clothes online by the end of 2016.
H&M is fighting many of the same challenges as other fashion retailers, including a shift in consumer spending to experiences and away from stuff. More stores, it has finally acknowledged, aren't the solution.
Sir Ken Morrison dead: Founder of Morrisons supermarkets has died
Sir Ken Morrison, the founder of supermarket chain Morrisons, who was instrumental in growing the company into one of Britain's leading retailers, has died at the age of 85.
The Press Association cited a short statement from Sir Ken's family, according to which he passed away at his home in North Yorkshire, following a short illness.
In the statement his family described him as a "unique figure in the history of grocery retailing in the UK" and said that for more than half a century he had been "the driving force at the heart of Morrisons".
10 people who prove you don't need good grades to be successful
In a separate statement, Morrisons said that Sir Ken was "an inspirational retailer" who transformed the company from a small, family-run business to a major player in the industry. At Sir Ken's retirement in 2008, Morrisons had 375 stores and was serving over nine million customers, Morrisons said.
Sir Ken was awarded a CBE in 1990 and was knighted in the Millennium New Year's honours list for his services to the food retailing industry.
"Ken will be remembered by us all for his leadership, his passion for retailing and for his great love of Morrisons," said Andrew Higginson, the current chairman of Morrisons.
"To honour his memory in the most appropriate way we can, we will continue to develop the company that he built and loved," he added.
Joules enjoys strong sales uplift
In the six months to 27 November, retail revenue was up 15.8% as ecommerce sales rose by 30.3% and store sales grew by 11.2%.
The company also saw an uplift in wholesale revenue which climbed by 17.1%. International revenue increased by 39.3% and now represents 10.6% of group revenue.
Meanwhile, underlying pre-tax profit rose by 19.9% to £7.5 million.
Colin Porter, Joules chief executive, said: "Joules has continued to perform well during the first half of the financial year with strong growth delivered across the brand's distribution channels and target markets. This significant progress reflects the quality and design of our products and the growing demand for the Joules brand, both in the UK and internationally."
The company said group trading over the Christmas period and in the second half of the year to date has been strong and in line with expectations.
H&M posts 7 percent rise in FY16 sales, plans foray into five new markets
H&M posts 7 percent rise in FY16 sales, plans foray into five new markets
For the full-year as well as fourth quarter ending November 30, 2016 H&M group's sales including VAT increased by 7 percent in local currencies. The company has said in a statement that it aims to achieve a sales growth target of 10-15 percent per year and will continue its offline and online expansion in the existing and new markets.
Commenting on the company's annual performance, Karl-Johan Persson, CEO of H&M said, "2016 was an eventful year which included many positive things but also challenges for us as well as for the industry. For fashion retail in general, 2016 was at the same time a challenging year in which various external factors – including geopolitical events – had a negative impact on retail trade in many markets. This was particularly visible in France, Germany, Switzerland and Italy as well as in the US and in China. Since these markets represent a large share of our sales, this consequently had a great impact on our overall sales development."
Full year and fourth quarter highlights
Converted into SEK, sales for the year, including VAT increased by 6 percent to 222,865 million Swedish krona (25,229 million dollars), while sales excluding VAT amounted to 192,267 million Swedish krona (21,765 million dollars). Gross profit increased to 106,177 million Swedish krona (12,018 million dollars) against 103,167 million Swedish krona (11,678 million dollars), corresponding to a gross margin of 55.2 percent.
Profit after financial items amounted to 24,039 million Swedish krona (2,721 million dollars) compared to 27,242 million Swedish krona (3,083 million dollars) last year. The group's profit after tax amounted to 18,636 million Swedish krona (2,109 million dollars) against 20,898 million Swedish krona (2,365 million dollars), corresponding to11.26 Swedish krona (1.27 dollars) per share. The company said, profits during the year were negatively affected by increased mark-downs but also by higher purchasing costs from the strengthened US dollar.
The company reported continued strong online development for all brands both as regards sales and profitability and witnessed strong sales growth for COS, & Other Stories, Monki, Weekday and H&M Home during the year.
For the fourth quarter, H&M group's sales including VAT increased by 7 percent in local currencies. Converted into SEK, sales including VAT increased by 8 percent to 61,098 million Swedish krona (6,922 million dollars). Gross profit increased to 30,027 million Swedish krona (3,398 million dollars), corresponding to a gross margin of 57 percent. Profit after financial items increased to 7,409 million Swedish krona (838 million dollars). The group's profit after tax increased to 5,914 million Swedish krona (669 million dollars), corresponding to 3.57 Swedish krona (0.40 dollar) per share.
H&M ventures into new markets
H&M carried out a strong expansion during the year with a total net addition of 427 new stores and 11 new H&M online markets. At the end of the financial year H&M had 35 online markets and the number of stores amounted to 4,351 in 64 markets.
During the fourth quarter, the company ventured into new markets – Cyprus and New Zealand, as well as rolled out H&M online platforms in Canada and South Korea.
The Board of Directors proposes a dividend of 9.75 Swedish krona (1.10 dollars) per share for the 2015/2016 financial year.
Aims to grow sales by 10-15 percent per year
The group has announced a new growth target and aims to increase the sales by 10 – 15 percent in local currencies per year with continued high profitability.
The H&M group's sales including VAT in December 2016 increased by 6 percent in local currencies compared to the same month the previous year. Converted into SEK the increase was 10 percent. The H&M group's sales including VAT in the period January 1 to January 29, 2017 increased by 11 percent in local currencies compared to the same period the previous year.
The H&M group plans to open approximately 430 new stores net in the 2016/2017 financial year. Kazakhstan, Colombia, Iceland, Vietnam and Georgia are planned to become new H&M markets. In addition, H&M plans to continue its online roll-out into six new markets: Turkey, Taiwan, Hong Kong, Macau, Singapore and Malaysia. The company also plans to launch one or two new brands in 2017.
In brief
FY16 sales rise 222,865 mn SEK
Q4 sales up 61,098 mn SEK
Shoprite profits come roaring in
Despite a tough local market, Shoprite has edged its rivals and its rest of Africa play is going swimmingly
It has been 27 years since Shoprite, then and until recently led by Whitey Basson, took its first tentative steps beyond SA's borders.
The move was greeted by widespread market criticism.
Shoprite has, mostly, proven that any pointed fingers have been hopelessly misdirected.
Basson (now retired) termed African expansion Shoprite's second growth engine and it is proving to be just that.
The retailer's trading update for the six months to December 2016 leaves no doubts.
Shoprite's operations in 14 other African countries spanning 375 stores (as at June 30, 2016) delivered an exceptional 32.2% rise in year-on-year sales, to about R12.9bn.
This will take non-SA operations' contribution to almost 21% of group sales, up from 17.5% in the six months to December 2015.
In constant currency terms, the rise in sales in the latest update period was an even more impressive 51.7%.
Working in Shoprite's favour is the crippling shortage of foreign currency, particularly in oil-producing countries Angola (its biggest non-SA market) and Nigeria. The currency shortage has left local traders desperately short of their mainstay: imported stock.
It is a situation in which Shoprite is using its financial muscle to full advantage.
"Shoprite has its external balance sheet in SA to fund stock requirements in its African operations," says Evan Walker of 36One Asset Management.
Availability of stock is enabling Shoprite to attract a whole new group of consumers into its stores: those who have traditionally bought from the huge number of small, informal traders.
"There has been a perception among consumers that Shoprite was an expensive place to shop, suitable for the elite only," says Joachim Kotze, an equity analyst at Denker Capital.
Now, with those sceptical consumers drawn into Shoprite stores, the perception may well be changing. Shoprite has probably gained a significant number of new, permanent customers, says Kotze.
Walker agrees. "I believe Shoprite has entrenched its position," he says.
Shoprite is probably not getting much cash, in the form of repatriated profits, out of its African operations.
Independent retail analyst Syd Vianello does not view this as a matter of concern. "They will just continue to use local profits to fund expansion," he says.
Shoprite's expansion in Africa remains vigorous, with more than one new store being opened every week. The number of stores outside SA by the end of 2017 is targeted to stand at 415 — that is 58 (16%) more than a year earlier.
Though Shoprite's operations outside SA were the highlight of the trading update to December, local operations more than held their own. They did so in a market where most consumers are being hit by rampant food-price inflation, slowing household income growth and difficulty in accessing credit.
Trading through more than 1,170 Shoprite, Checkers and USave stores, the SA supermarkets division (the core of group operations) ended the six months to December with year-on-year sales rising 10.7% to just on R51bn and sales volume lifting 3.3%. On a like-for-like (same store) basis, sales were up 7.4% — in line with internal inflation at the same level.
"It was a very good showing," says Walker.
Woolworths is the only competitor with which an up-to-date comparison can be made.
It was no match for Shoprite.
Despite Woolworths priding itself on the resilience of its core market — the upper-income segment — in the 26 weeks to December 25 it reported food volume growth of only 0.3% and a 3.6% fall in like-for-like sales volume.
Shoprite's R5.2bn annual revenue furniture division also shone, lifting sales by 10%.
The division operates through 53 House & Home stores and 454 OK Furniture stores, of which 67 are in seven other African countries.
It was a solid performance in a sector which is far from enjoying boom conditions. Reflecting this, Statistics SA reports that in the three months to November furniture and appliance sales in current money terms fell by 0.3% year-on-year. In the previous three months, sales in current money terms were down 3.4%.
In 2016 Shoprite's defensive quality again caught the attention of the market which, in the two previous years, had dished out harsh punishment to its share price. It resulted in Shoprite becoming one of the top five best-performing retail shares in 2016.
The market's renewed confidence in Shoprite was also rewarded by a 12.7% rise in its headline EPS (HEPS) in the year to June.
A similar annual HEPS growth pace of 11%-13% appears well within Shoprite's reach in its financial years to June 2017 and 2018. In its current financial year it would put Shoprite on a forward p:e of about 17.7, a level offering fair rather than great value.
However, putting a fair value on Shoprite, led since January by new CEO Pieter Engelbrecht, is no easy task. It has become more a matter of speculation following the announcement on December 14 of the intention to form a new entity, Retail Africa, through the merger of Shoprite and Steinhoff's operations in SA and the rest of Africa.
All that is known so far is that to create Retail Africa, Shoprite will issue new ordinary shares to Steinhoff in exchange for "a significant equity interest" in Shoprite.
While the market has given news of the proposed creation of Retail Africa a lukewarm reception, Vianello believes it will go ahead. "It will be a complex deal but nothing is insurmountable," he says.
Emaar Malls reports strong growth in 2016
Emaar Malls reports strong growth in 2016
Emaar Malls reported a growth in fourth-quarter (October to December 2016) net profit by four per cent to AED 452 million ($123 million), compared to the Q4 2015 net profit of AED 435 million ($118 million).
Emaar Malls (DFM: EMAARMALLS), the shopping malls and retail business majority-owned by global property developer Emaar Properties, has recorded a net profit of AED 1.874 billion ($510 million) during 2016, an increase of 13 per cent over the full-year 2015 net profit of AED 1.656 billion ($451 million). FY 2016 revenue recorded a growth of 8 per cent to AED 3.227 billion ($879 million) compared to FY 2015 revenue of AED 2.992 billion ($815 million).
Emaar Malls reported a growth in fourth-quarter (October to December 2016) net profit by four per cent to AED 452 million ($123 million), compared to the Q4 2015 net profit of AED 435 million ($118 million).
Revenue for Q4 2016 increased to AED 835 million ($227 million), which is 8 per cent more than Q3 2016 revenue of AED 774 million ($211 million).
The shopping malls assets of Emaar Malls – The Dubai Mall, Dubai Marina Mall, Souk Al Bahar, Gold & Diamond Park and the community shopping centres – welcomed 125 million visitors during 2016, similar to annual footfall during 2015.
The Dubai Mall set a similar footfall level of 80 million visitors for three consecutive years despite ongoing expansion in and around the mall, reiterating its reputation as the world's most-visited retail and lifestyle destination. The gross leasable area (GLA) occupancy levels averaged 96 per cent during 2016.
Mohamed Alabbar, Chairman of Emaar Malls and Emaar Properties, said: "As a global business and leisure hub, Dubai is among the top preferred destination for international retailers to expand their operations. Emaar Malls has created a dynamic platform of shopping malls that catalyse the growth of Dubai's retail sector while offering the nation's residents and visitors with exciting retail and leisure choices.
"In today's digital age, we are focused on leveraging advanced technologies to ensure that our visitors have memorable experiences at our malls. We will continue to introduce new innovations, strengthened further with digital strategies to ensure that our malls stay ahead of the curve, and redefine the retail sector.
"The positive growth of the Dubai economy, led by the smart, futuristic vision of HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, will continue to power our growth. We are now expanding our footprint with next-generation malls in Dubai Creek Harbour and Dubai Hills Estate that will make the city the first choice for retail."


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