Consumer Products and Services

Private equity could scratch Nestlé skin-care itch

6 Nov 2018

The KitKat maker is selling a unit specialising in psoriasis and acne treatments. Rival consumer groups may be put off by the business’s tricky mix of products and low margins. Private equity firms, already piling into the dermatology sector, would make a more logical owner.

Alibaba feeds fears of cooling Chinese consumption

2 Nov 2018

Quarterly sales hit $12 billion, but the e-commerce titan missed expectations and trimmed guidance. That suggests local shoppers and advertisers may be pulling back. It won't reassure investors rattled by trade tensions and lacklustre spending during a big October holiday.

Trade and pig diseases infect China’s pork giant

31 Oct 2018

WH Group, $11 bln owner of U.S.-based Smithfield, is fighting a losing battle on two fronts. Deadly swine fever is sweeping China, while tariffs hammer its American market. Quarterly earnings fell by almost a third from a year earlier. It will get worse before it gets better.

Sony’s turnaround is missing an enduring plot

30 Oct 2018

The $70 bln Japanese group beat quarterly earnings expectations, thanks to videogames like Marvel's Spider-Man. But even after a two-year rally, the shares are cheap. The next challenge for new boss Kenichiro Yoshida is to prove the revival is more than one-hit wonders.

Reckitt’s best activist repellent is out of reach

30 Oct 2018

The Dettol maker faces sluggish sales and falling margins, with factory disruptions only part of the problem. Its hygiene division could be worth 22 bln pounds but spinning that off in the next year or two would incur a big tax bill. Pushy investors may want action before then.

HSBC leans on rate rises to ease trade tensions

29 Oct 2018

The Asia-focused bank reported a 28 percent increase in quarterly pre-tax profit despite tariffs starting to squeeze some clients. Fortunately for boss John Flint, Fed policy is moving in HSBC’s favour. If it continues, his double-digit profitability target should be in reach.

Chinese super-rich disrupt and are disrupted

29 Oct 2018

The People’s Republic is minting two new billionaires each week. Soon they will outnumber their U.S. peers. Younger, creating wealth faster, and losing it faster too: Chinese are redefining what it means to be ultra-rich.

Cathay Pacific typifies data-breach turbulence

25 Oct 2018

The $5 bln Hong Kong airline disclosed unauthorised access to personal details of over 9 mln passengers. It also waited seven months to come clean. Though investors should know by now that hacks can happen anywhere, they leave struggling companies like Cathay more exposed.

Moutai makes flammable fuel for China’s stimulus

26 Oct 2018

As companies bid for contracts tied to Beijing’s infrastructure surge, many may toast deals with a bottle of China’s best-known liquor. The $110 bln spirit maker offers a boozy play on government spending, but a sales surge could embarrass graft enforcers, prompting a crackdown.

Amazon throws darts on the Indian high street

24 Oct 2018

The e-commerce giant is pumping money into local bricks-and-mortar stores. Turning offline, as it has done at home, underscores boss Jeff Bezos’ ambition. It’s also a hedge against rival Walmart, should New Delhi allow foreigners freer rein in supermarkets and department stores.

Kimberly-Clark points to end of long-tenured CEOs

22 Oct 2018

The $37 bln Kleenex maker’s chief is exiting after 16 years, much like peers at Pepsi and Campbell Soup recently. It’s a sign of accelerating executive turnover at consumer-goods and industrial companies. As successors struggle to revive growth, they can expect a shorter leash.

P&G’s innovation drive could use a boost

19 Oct 2018

Healthy consumers helped the consumer-goods giant report strong sales. Even its troubled razor business has sharpened up a little. P&G is following activist Nelson Peltz’s advice and trying new things. With costs rising and pricing power weak, it can’t afford to slacken the pace.

Unilever and Nestlé’s growth tests pricing power

18 Oct 2018

Higher prices helped the consumer goods giants boost revenue in the third quarter. Both need to keep charging more to offset rising costs. The risk is that price-conscious customers go elsewhere. It ultimately depends on whether the world economy can cope with higher inflation.

China’s share-backed debt problem is a lasting one

16 Oct 2018

Some $220 bln of loans backed by stock collateral threaten to worsen a nearly $2 trillion selloff this year in the People's Republic. Beijing is likely to step in to contain the immediate risk, but higher lending costs and moral hazard will hurt for longer.

Beijing’s art auctioneers aim at Western duopoly

16 Oct 2018

Poly International and China Guardian now dominate the $7.1 billion global market for Chinese art and antiques. Having crushed smaller local rivals, they are expanding abroad. But their parochial, state-protected nature hobbles them. Sotheby’s and Christie’s look safe for now.

Patisserie Valerie fate rests on accounts’ hot air

12 Oct 2018

The cream cake chain will go under without fresh cash, and its CFO has been arrested. The group’s operating strength implies shareholder Luke Johnson should cough up. That hinges on whether the company’s big cash pile has been stolen, or whether the accounts themselves are rotten.

Tencent’s $230 bln selloff is a double pain

11 Oct 2018

A tech rout has hit the Chinese giant harder than U.S.-listed rivals like Alibaba. Tencent's loss is increased by its exposure to fickle mainland punters and a large emerging market weighting. But boss Pony Ma’s top problem is a regulatory crackdown undermining the core business.

Self-fulfilling prophecy imperils Chinese shoppers

10 Oct 2018

Tourism spending during last week’s Golden Week holiday grew a healthy 9 pct from a year ago to nearly $90 bln. Any “consumer downgrade” seems more informed by alarming anecdotes than any hard data so far. There are good reasons, though, to fear the spread of skittish sentiment.

Storage IPO makes sense in a smaller container

8 Oct 2018

Shurgard, which rents storage lockers to urban dwellers, is raising 575 mln euros to pay off debt and expand. It operates in more countries than UK rivals, with high occupancy rates and margins. At a valuation of 2 bln euros, the low end of the range, it should be a safe choice.

Mattress Firm is the stuff of retail nightmares

5 Oct 2018

The bed store owned by South Africa’s Steinhoff is filing for bankruptcy protection, and blame spreads wider than a king-sized duvet. Overexpansion, underpricing, predatory online rivals and Chinese dumping make for a fable about how retailers can fail even in a healthy economy.