Consumer Products and Services

Trust deficit thwarts logical Comcast-Disney truce

13 Jul 2018

The sensible way for the media giants to end their damaging bidding war would be to carve up Rupert Murdoch’s U.S. and UK assets. As the two sides can’t negotiate, an armistice depends largely on goodwill. The rivalry between CEOs Brian Roberts and Bob Iger makes that unlikely.

Key risk to Kylie Jenner’s lip empire is her mouth

13 Jul 2018

The reality TV star’s cosmetics business made $330 mln of revenue in 2017. Value her lip kits like L’Oreal, and she could be a billionaire. But as fellow social media entrepreneurs have found, the sales power of their platform can unravel in an instant by saying the wrong thing.

Rotten food is least of UK grocers’ Brexit worries

11 Jul 2018

British supermarket operators worry that failure to reach a deal with the EU would see goods stuck at the border. More serious is the prospect of tariffs on imports from the bloc. That would leave them scrambling to protect thin margins and their market share from foreign rivals.

Chinese sportswear may be hard turf to defend

11 Jul 2018

As Nike and Adidas duke it out at the World Cup in Russia, a bigger matchup looms. China’s market for sneakers and kit is growing quickly, and local rivals like $14 bln ANTA have had a good run. Younger and richer consumers, though, could start giving foreign brands an advantage.

Trade war corporate welfare queues will get long

11 Jul 2018

Team Trump is targeting another $200 bln of Chinese goods, from fish to chemicals, for 10 pct tariffs. Both countries are also trying to reassure businesses with talk of exemptions and subsidies. That just leads to more unhealthy and lasting government influence over industry.

Xiaomi IPO will punish bankers twice

9 Jul 2018

The Chinese smartphone-maker’s shares opened below the issue price in their $54 bln debut. It’s not the start tech companies covet. Advisers failed to sufficiently lower an unrealistic valuation goal. Their penalty may be that other big listings in Hong Kong are delayed.

Smartphone slowdown is least of Samsung’s problems

6 Jul 2018

South Korea’s $300 bln tech giant estimates quarterly revenue fell 5 pct from a year earlier. Weak handset sales will recover, though. More worrying are China's price-fixing probe into memory chips and new rules at home that could force a hefty batch of its stock onto the market.

China’s Fosun gets into bed with its boss

6 Jul 2018

The $16 bln conglomerate is adding matchmaking to its "happiness ecosystem", buying a dating service from Chairman Guo Guangchang for $600 mln. Baihe Jiayuan is a big brand, but sector growth is slowing and the price looks steep. This insider deal is unlikely to charm investors.

Dan Loeb hits limits of “constructivism” on Nestlé

2 Jul 2018

A year after disclosing a stake, the activist investor called on the Swiss giant to shake up its business and board. Though his ideas make sense, progress has been slow and the stock has lagged. He could take a more muscular approach, but only if other shareholders go along.

Novartis contact lens spinoff defies messy optics

29 Jun 2018

Separating its Alcon eyecare division is an admission of failure for the Swiss pharma group, which spent $52 bln on the unit seven years ago. Though the listing won’t unlock much value, it should help Alcon’s recovery, and let new boss Vasant Narasimhan focus on making drugs.

Chinese used-car sale fails timing test

28 Jun 2018

Online marketplace Uxin has halved the size of its U.S. float. A hefty lending business may be to blame, but its worst offense is probably picking a moment when regulatory uncertainty is already battering Chinese tech stocks. Rivals waiting in the IPO queue should take note.

Diageo could use a chaser as it runs up China tab

26 Jun 2018

The British booze giant wants to spend some $900 mln to own a majority of Sichuan Swellfun. A rally in baijiu stocks means Diageo is buying high again. Absolute control offers defensive value, but a broader strategy will be equally important against $150 bln Kweichow Moutai.

Jack-of-all-apps Meituan masters few for IPO

25 Jun 2018

The unprofitable Chinese tech firm revealed in its Hong Kong debut plans that food delivery, travel and a handful of other areas account for over 90 pct of revenue. To justify a possible $60 bln valuation, investors will have to believe it can succeed in more cutthroat markets.

Conagra food deal could leave heartburn

22 Jun 2018

The $15 bln owner of Hebrew National and Reddi-wip could tie up with smaller rival Pinnacle after hedge fund Jana has come calling. Bulking up is one way to fight slow growth as consumers shift from processed fare. But justifying a deal requires cost cuts which may be a stretch.

America Inc. may want to revise China growth plans

22 Jun 2018

Trade tensions might hit the U.S. stock market from another angle. A Communist Party tabloid just published an op-ed warning Beijing could target DJIA constituents such as Apple and Boeing. The scope of retaliation is limited by economics, but big expansion could be curbed.

Chanel lifts lid on impressive treasure chest

21 Jun 2018

The private luxury brand opened its books for the first time to reveal larger-than-expected sales of $9.6 billion and a plush 28 percent operating margin. The display nixes fears the Parisian label is flagging. Claims it is not preparing for an IPO or sale are less convincing.

BJ’s goes for refreshingly no-frills IPO

19 Jun 2018

The discount wholesaler’s private equity owners are aiming for a $2.1 bln valuation. BJ’s resembles pile-'em-high retailer Costco, but priced much more like the more modestly rated Walmart. The lack of a racy growth story or strategic gamble makes it a rarity – in a good way.

Debenhams dips into its emergency stock

19 Jun 2018

The UK department store is cutting investment and may sell assets, as pressure from online retailers and onerous leases erode its profit. That may help avoid breaching debt covenants, but its competitiveness will suffer. A more radical restructuring is getting harder to avoid.

Xiaomi resets shrill IPO tone

19 Jun 2018

The Chinese handset maker will delay a mainland listing instead of doing this simultaneously with a Hong Kong flotation. The valuation target also may have fallen to as low as $55 bln. It’s a bad start to a series of market debuts from a new wave of tech giants.

Carrefour tin ear puts fat cats in Macron’s sights

18 Jun 2018

The supermarket’s ex-boss forwent part of a 13 mln euro payoff after pressure from the French government. It shows that the ex-banker President Emmanuel Macron is no slave to laissez-faire economics. His move to liberalise firing rules makes corporate excess a legitimate target.