Consumer Products and Services

Vinted’s price markup rests on limitless growth

9 Sep 2024

Private equity shop TPG may buy a stake in the second-hand clothing site at a $5.5 bln valuation, the FT reported. It implies a much steeper multiple than the main listed peer. That may be fair if rapid growth persists, but the performance of other marketplaces are a red flag.

Nordstrom buyout looks like least bad fit

6 Sep 2024

The US department store chain’s founding family and a Mexican retailer have offered to take it private in a $3.8 bln deal. The share price has risen since a deal was first mooted, but Nordstrom’s prospects haven’t. Its directors ought not to let this one get away.

Couche-Tard gives 7-Eleven owner easy defence path

6 Sep 2024

The Japanese company's board unanimously rejected its Canadian suitor's $39 bln takeover offer. The 21% premium is well short of Seven & i's breakup value. For this deal to be a real test of Japan's receptiveness to foreign M&A, Couche-Tard needs to work a whole lot harder.

Couche-Tard deal machine faces ultimate test

5 Sep 2024

The Canadian convenience store operator has spent $18 bln gulping down 75 acquisitions since 1996. Japanese rival Seven & i is much bigger prey. Success will depend on the Circle-K operator learning from incomplete takeovers including Carrefour, Caltex and Casey’s General Stores.

VW row flags Germany’s creaking corporate model

5 Sep 2024

The $55 bln carmaker is battling unions as it tries to deepen a $11 bln cost-cutting programme. A complex shareholder base makes agreement harder. Such feuds are becoming more common as German consensus-driven governance faces a weak economy, trade wars and climate change.

Nestlé L’Oréal sale would add sugar to sour fix

5 Sep 2024

The Kit Kat maker’s new CEO Laurent Freixe may have to sacrifice profitability to claw back market share. Flogging part of the consumer group’s 20% stake in the $234 bln beauty giant could help fund buybacks or special dividends, taking the sting out of a painful turnaround.

Monopolies work best if they exist. Ask Disney.

3 Sep 2024

The $160 bln media giant pulled its sports and entertainment channels off DirecTV while a US judge also blocked its sports streaming JV. In both arrangements, the Mouse House is trying to exercise the power of its content. Trouble is, consumers have plenty of other places to go.

7-Eleven owner faces an inconvenient value truth

3 Sep 2024

Seven & i shares leapt on Couche-Tard's approach but trade at a big discount to the sum of its parts. Boss Ryuichi Isaka can speed up his existing strategy but has failed for years to unlock value. New owners have a better shot at helping the $38 bln retailer reach its potential.

Murdoch’s UK property gambit has a price ceiling

2 Sep 2024

Australian property listings site REA Group is eyeing $6 bln UK peer Rightmove. The News Corp-backed suitor can use cash and higher-valued shares to pay a 30% premium. Beyond that, Rupert Murdoch’s outfit might struggle to combine a successful bid with keeping him in control.

Dollar General is being nickel-and-dimed

29 Aug 2024

Rising costs have taken a toll on the low-cost US retailer, whose shares fell 25% Thursday. Sales growth and decent margins suggest the $20 bln company is striking a fine balance over what shoppers get for their dollar. But frugality is rarely fun, for customers or retailers.

Poison pills will hurt Seven & i and Japan

28 Aug 2024

The 7-Eleven owner wants the government to discourage dawn raids on its stock to help defend against a Couche-Tard takeover, per Bloomberg. Such protection would undermine Tokyo's shareholder value push. With other bidders likely, the best course is to encourage a fair process.

PDD black box morphs from magical to alarming

27 Aug 2024

The Chinese e-commerce firm more than doubled earnings, mysteriously defying an economic slump. But sobering comments from Chair Chen Lei on the sustainability of profit erased $55 bln of market value. The Temu-owner could ease the pain of a slowdown by being more transparent.

Nestlé’s CEO switch serves up unappetising menu

23 Aug 2024

The $275 bln consumer-goods group is replacing its boss of eight years, Mark Schneider, with insider Laurent Freixe. Weak sales and a sliding valuation probably justify the abrupt change. But investors will fear it heralds a more painful turnaround than they previously expected.

Walmart’s JD sale displays derisking smarts

21 Aug 2024

The US retail giant has offloaded the stake held in its Chinese partner since 2016 for $3.6 bln. With 400 stores of its own in the People’s Republic, Walmart isn’t leaving. But the move reduces its exposure to a shifting economy and may put a cap on JD’s stock price turnaround.

Price may be Couche-Tard’s lowest Seven & i hurdle

21 Aug 2024

The Canadian suitor may be able to cut enough costs to offer a 40% premium for its rival, valuing it at $59 bln. But antitrust concerns might require selling some US assets. And the target's status in Japan as a quasi-national asset will complicate attempts to seal a deal.

Estée Lauder makeover will be more than skin deep

20 Aug 2024

The $33 bln beauty giant is seeking a replacement for CEO Fabrizio Freda, who plans to retire after 16 years in charge. His successor will have to tackle weak demand in China and subpar profit margins. The biggest challenge, though, will be handling the controlling Lauder family.

Missing Chinese spenders deal Macau a losing hand

20 Aug 2024

Mainlanders are tightening their purse strings amidst a sluggish economy and preferring to stay closer to home. That’s weighing on the $23 bln casino enclave and companies such as SJM and Sands, which are relying on middle-class holidaymakers for a long drawn-out Covid recovery.

Couche-Tard may find 7-Eleven bid more convenient

19 Aug 2024

The Circle K owner’s preliminary offer sent shares of the retailer’s $38 bln Japanese parent Seven & i up. The target is plotting its own rejig, with support of activist ValueAct. But fair M&A guidelines ensure the bidder a warmer initial reception than the one it got in France.

Alibaba and JD reveal two ways to cope in downturn

16 Aug 2024

China's $190 bln e-commerce group relies on ad sales and is betting on new tech for a turnaround. Its rival sells to shoppers and is focusing on supply chains to boost earnings. The diverging fortunes rest on who spends more: cash-strapped firms or cost-conscious consumers.

Starbucks piles whipped cream atop CEO pay problem

15 Aug 2024

With a potential $145 mln package, new boss Brian Niccol would earn over 10,000 times the average barista. Based solely on the $20 bln of market cap he added, he’s in theory worth far more. Because vibes factor into valuing executives, it’s no wonder compensation keeps rising.