Consumer Products and Services

China’s noodle master has to get nimbler

23 May 2017

A profit rebound at Hong Kong-listed Tingyi is less than meets the eye. Rising ingredient costs are squeezing the firm, which works with Starbucks and Pepsi, and it relies too much on instant noodles and soft drinks. As China’s tastes get healthier, Tingyi needs to adapt faster.

TalkTalk resets Wi-Fi, but signal is still weak

10 May 2017

The UK broadband supplier cut its dividend and said it wants to get back to its low-cost roots. Competing on price to win subscribers is sensible as far as it goes, but since TalkTalk’s larger rivals offer juicy TV, mobile and internet bundles, the battle is not evenly pitched.

Burberry looks better without boardroom wrinkles

9 May 2017

In two months, designer Christopher Bailey will be replaced as CEO but keep outsize influence and a board seat. That might be tolerable were Burberry performing better. Now, it’s clear new boss Marco Gobbetti needs a free hand. Bailey has a role, but ideally a lesser one.

Canada’s subprime trouble is drama, not crisis

8 May 2017

A run on the Home Capital mortgage lender has eerie echoes of 2008. But structural strengths and regulatory awareness mean the Canadian financial system is far sounder than its neighbor's before the crisis. Still, high housing prices and consumer-debt levels are economic risks.

Sainsbury over-seasons a stale retail recipe

3 May 2017

The supermarket’s full year like-for-like sales fell 0.6 percent, despite help from recently acquired Argos. Rival Tesco is diversifying too through its purchase of wholesaler Booker. Greater complexity masks problems caused by a long price war, but doesn’t fix them.

Hillhouse makes cautious pass at China’s Belle

28 Apr 2017

The Chinese investment manager has joined with CDH and bosses to take the struggling mainland shoe retailer private. At $6.8 bln, this could be one of Asia's largest management buyouts. The offer isn't extravagant, but making Belle's results pretty again won't be easy.

Gucci shows up rivals – and analysts

26 Apr 2017

The Italian label’s first-quarter sales rose 48 percent, double even bullish predictions. Global luxury spending is flat so rivals are probably losing market share. The difficulty of spotting winners and losers in this skittish sector makes current lofty valuations suspect.

Ericsson turnaround has a static problem

25 Apr 2017

The Swedish telecoms kit maker made a $1.4 billion first-quarter operating loss after provisions and writedowns announced in March. New boss Borje Ekholm has the right strategy. But investors will still fret about further nasty surprises and a lack of progress on non-core sales.

Arnault’s new-look Dior pleases almost everyone

25 Apr 2017

The French tycoon is offering to buy out minority investors in Christian Dior for 12 bln euros. LVMH shareholders will also welcome a streamlined empire. The most stylish twist is that Arnault is using the luxury giant’s balance sheet and shares in rival Hermes to pay for it.

Jimmy Choo seeks new owner for scuffed brand

24 Apr 2017

The high-heel label is for sale less than three years after its IPO. Owner JAB may need cash following its $7.5 billion purchase of Panera Bread. There is room to increase Jimmy Choo’s operating margin, but with slow sales growth, it already looks expensive.

Reinvention of Philips is on a healthy track

24 Apr 2017

The Dutch group’s transformation from a conglomerate into a focused maker of health kit is in its final stage. After carving out lighting, boss Frans van Houten is making headway in lifting poor margins. The surgery is needed to close the valuation gap with pure-play rivals.

Unilever wins battle in shareholder value war

20 Apr 2017

Consensus-beating first quarter results add impetus to the Anglo-Dutch group’s goal of a 20 pct operating margin by 2020. Hitting the target would help justify a share price above the spurned offer from Kraft Heinz. That hinges on it cutting fat rather than bone, though.

PetSmart’s cross-breeding effort may produce mutt

19 Apr 2017

The U.S. merchant of dog food and cat toys is acquiring online rival Chewy in the latest example of bricks chasing clicks. PetSmart's model puts it in better shape to buy than many retailers. At a reported $3.4 bln, though, the deal could bastardize a highly leveraged business.

Feds keep hunting big game in bank M&A

18 Apr 2017

U.S. regulators are permitting consolidation among smaller financial institutions. Capital One's revised deal – with a new partner and a lower price – for the credit-card assets of guns-to-tents retailer Cabela's, however, suggests that larger mergers are still in the crosshairs.

7-Eleven owner steps on the gas in Texas

6 Apr 2017

Japan's Seven & i will pay $3.3 bln for most of Sunoco's gas stations, building on its lead as America's top convenience-store chain. Financial details are scant, but there is a good geographic fit. The buyer has also clearly moved on from last year's sensational boardroom coup.

Unilever finds clever twist in takeover defence

6 Apr 2017

The Magnum ice cream maker unveiled measures to increase shareholder value, and implicitly prevent a re-run of Kraft Heinz’s hostile approach. It’s mostly obvious stuff. But plans to review Unilever’s dual Anglo-Dutch structure offer a cunning way to build a political shield.

Asos takes costly fashion cues from Amazon

4 Apr 2017

The UK online clothes retailer has raised sales forecasts on international demand. But Asos is becoming pricier to run: six-month costs rose 38 pct, more than the group's top line. Asos is investing prudently, but a rich valuation leaves it exposed to web-based competition.

Unilever can take page from GE’s activist playbook

29 Mar 2017

The 139 bln-euro Magnum ice-cream owner may attract uppity investors for the same reasons Kraft Heinz came calling: low margins and relatively little debt. CEO Paul Polman could keep them at bay by aping GE and seeking an activist's advice. But he'd have to be willing to act.

Tesco has three issues, but only one matters

28 Mar 2017

Some investors think the UK grocer's merger with wholesaler Booker is distracting and expensive. Regulators are punishing it for an old accounting scandal. And customers just want ever-lower prices. This last challenge is the only one with the potential to knock Tesco off course.

Unilever’s spreads sale plan contains adequate fat

23 Mar 2017

After Kraft’s aborted bid, the Marmite maker needs a self-help plan. Selling its spreads business would be risky as weak growth prospects may mean a low price. But on modest assumptions a private equity buyer could get a decent return – and kick-start Unilever’s reinvention.