Consumer Products and Services

Luxury’s China wobble will accelerate M&A

16 Oct 2024

LVMH lost 7% of its market value after revealing bleak consumer spending in the world’s second-largest economy. The broader sell-off will make small players more vulnerable. But this will create a big opening for cash-rich giants to pounce on already battered stocks like Kering.

CD&R $17 bln French deal may hinge on big retreat

15 Oct 2024

Paris is concerned about the future of critical medicines if the private equity firm buys a stake in Sanofi’s consumer unit. CD&R can promise bigger investment and still get a decent return. Giving up control by bringing in a Gallic co-investor might also soothe the government.

Weak 7-Eleven defense might embolden Couche-Tard

10 Oct 2024

Japan’s top convenience store owner will spin off its superstores and trim stakes in non-core assets to fend off a $47 bln takeover approach. It’s a disappointing strategy update. The Canadian suitor can consider taking its offer directly to the target’s long-suffering investors.

Richemont exits online hell, but heaven is way off

9 Oct 2024

The $70 bln luxury group is offloading its ailing platform YNAP in exchange for a stake in US-listed buyer Mytheresa. Chair Johann Rupert gets rid of a loss-making arm. But the sector’s dubious economics make it hard to see how he winds up with a holding that offsets his blushes.

China’s consumers regain some lost lustre

7 Oct 2024

Daily cross-border travel is forecast to rise 19% for this year's Golden Week holiday, above pre-Covid volumes. Gamblers have also returned to Macau. Consumption bright spots are scarce, but more middle-class spending will stir hopes that Beijing's stimulus might gain traction.

Drink giants’ risky new plan: quantity not quality

1 Oct 2024

Liquor makers like $80 bln Diageo until recently focused on ‘premiumisation’, where customers consume less alcohol but pay up for fancy brands. With punters feeling the pinch, that strategy looks dicey. Yet flogging more cheap booze is optically awkward and financially painful.

LVMH wedges door open for future Moncler deal

27 Sep 2024

Bernard Arnault’s $400 bln group will help the CEO of its Italian rival raise his stake in the ski-jacket maker to 18.5%. It tightens Remo Ruffini’s grip on Moncler and puts LVMH in his good books. That leaves the luxury giant in pole position if Ruffini ever opts to sell.

New consumer CEOs start life in the slow lane

24 Sep 2024

Nike joined Campari, Nestlé and Starbucks in abruptly ditching its boss. There’s plenty of scope for the new CEOs to remedy their predecessors’ missteps. But a common thread at the four groups is slowing sales amid consumer weakness, making the turnaround jobs much tougher.

23andMe deal should never be cloned

20 Sep 2024

The genetic-test firm’s entire board, save founder Anne Wojcicki, resigned in frustration with her stalled takeover bid. The offer is perhaps the least-worst detail. The once $6 bln company should never have gone public and super-voting stock primed it for a governance implosion.

Amazon’s office mandate reflects deeper banality

20 Sep 2024

Boss Andy Jassy is ending remote work to inspire more inventiveness. Even before the pandemic, the tech goliath was rethinking staff locations and seating design. Reverting to assigned desks every day in a new era of employment says a lot about how stagnant its ideas have become.

BlackRock’s $30 bln AI fund is Big Tech’s backstop

18 Sep 2024

The asset manager will team with Microsoft to invest in AI infrastructure. It’s a way to bolster tech firms’ capacity to keep up with the $1 trln needed for data centers alone, akin to governments tapping private funds to build roads. Thing is, that assumes AI is just as crucial.

Campari can win back drinkers with marketing binge

18 Sep 2024

The $10 bln Aperol maker’s shares fell after the abrupt departure of CEO Matteo Fantacchiotti. He had a gloomy outlook because consumers aren’t splurging on pricey spirits. The next boss will have to position the company for the next bounce by leaving their card behind the bar.

For global firms, India IPOs are a honey trap

17 Sep 2024

Hyundai and LG Electronics are each keen to float their local subsidiary on Mumbai bourses. Rich valuations are on offer. Companies have been burnt, though, by chasing additional listings around the world. The risk of getting hurt looks particularly bad in India.

OpenAI’s value on human destruction short circuits

16 Sep 2024

The cutting-edge artificial intelligence outfit may be worth $150 bln, a 74% jump from its last benchmark. Take AI boosters’ claims at face value and it’s easy to justify wildly more still. The problem: that would mean OpenAI is no mere company but a force shoving aside humanity.

Evan Spiegel is the skunk at the founder’s party

13 Sep 2024

The Snap architect blamed his $16 bln social media network’s stock slump on tepid ad growth. Self-awareness is a positive sign, and attention to detail is a creative plus. But after 13 years it might be time for Spiegel to seek outside help.

UK dials up fresh signal of telco M&A optimism

13 Sep 2024

British regulators will OK Vodafone’s merger with CK Hutchison’s Three without structural remedies. Previous such deals have ended up blocked or, like Orange-MásMóvil, subject to disposals. It flags that new investment is more key than antitrust worries over consumer prices.

Midea listing promises Hong Kong a shot in the arm

12 Sep 2024

The electronics maker’s $3.5 bln offering stands to raise more in one deal than the city has seen all year. With solid earnings, diversified revenue sources and strong investor interest, the share sale could provide a boost to sentiment in the deal-starved market.

Apple offering a peek at AI’s financial reality

11 Sep 2024

The iPhone 16 is due in stores soon, optimized for artificial-intelligence. It’s unclear if business models exist for the costly and hyped tech. Sales of the new devices may signal whether consumers will pay for it or if Silicon Valley has a solution seeking a problem.

Rentokil’s US bug invites management fumigation

11 Sep 2024

The $13 bln pest controller’s shares fell 18% amid a new warning on growth. CEO Andy Ransom’s depleted credibility will embolden activist Nelson Peltz. A new boss or a private equity owner might better protect Rentokil’s US market share amid its tricky Terminix integration.

Hedgie’s magazine deal is hazy UK media buy signal

10 Sep 2024

Paul Marshall’s 100 mln pound bid for the Spectator values the right-wing publication at over 40 times EBITDA. His generosity will encourage seller Jeff Zucker and partners they can find a similarly blithe buyer for the Telegraph. But the market for political clout has limits.