Retail

Shareholders should bask in Sun’s hostile Kellwood bid

15 Jan 2008

The hedge and buyout fund launched a tender offer for the clothing retailer at a 27% premium. Management rebuffed earlier offers. And it is destroying value by tendering for covenantlite bonds that would allow Sun to leverage up the company. Shareholders may win anyway.

Man Utd profit boom doesn’t hide debt woes

11 Jan 2008

A bigger stadium, lucrative sponsorship deals and winning the Premiership helped the Red Devils score a doubling of profits last year. Yet, Man Utd remains saddled with highinterest loans which it can t refinance from the highlyleveraged takeover by the Glazers in 2005.

Stuart Rose comes down to earth with a bump

9 Jan 2008

The M&S boss has shocked the market with a trading statement that has wiped 20% off the UK retailer's shares. The stock is now just a few pence above what Philip Green was prepared to offer four years ago and, faced with a consumer slowdown, Rose seems to have run out of ideas.

UK consumer battens down in rough global weather

9 Jan 2008

If it s not a perfect storm, it comes close. UK Inflation is up, and set to rise further. Meanwhile, house prices have stopped rising slicing away at consumers reserves. Add in the credit crunch, which is making loans scarce. Expect more bad news from retailers.

Turkish supermarket auction may flunk market test

8 Jan 2008

Potential bidders for Migros Turk have been put off by the $4bn asking price. Global chains can always opt instead to build out their own stores; meanwhile, private equity may struggle to raise the finance. The sellers may have to lower their sights.

DSG pulls plug on UK retailers’ prospects

3 Jan 2008

The struggling electrical retailer's shares fell 20% as it slashed prices of laptops and appliances. The owner of the Dixons chain has plenty of problems of its own, such as the commoditisation of electrical gadgetry. But there's enough here to worry retailers of other kinds too.

US retailers bloated from big box binge

3 Jan 2008

Retail floor space has grown over 20% in the past decade, and now far exceeds other developed nations per capita. The housing bust, tapped consumers and internet competition are causing indigestion. With December sales down, the consequences of the glut are becoming apparent.

Rose heads for tough year at M&S

20 Dec 2007

The man who saved Marks & Spencer starts 2008 with a turnaround and a knighthood under his belt. But with M&S out of the pits, the real challenge for Sir Stuart will be to keep the UK retailer's racy growth story going.

Harry Potter in, Magna Carta out

19 Dec 2007

A manuscript related to the bestselling wizardry series went for 40 times its expected price last week. But a rare copy of the founding document of democracy brought in only 70% of its valuation. Sotheby s, which auctioned both, will have to change with the times.

Could Nike run with Sports Direct?

18 Dec 2007

The US sportswear giant wants to buy UK minnow Umbro. A 30% stake owned by Sports Direct, Mike Ashley s fiefdom, stands in the way. Maybe they could strike a deal Nike buys Sports Direct. That would give Nike what it wants, and put Ashley where he belongs, off the public pitch.

Merrill vents on Sports Direct, at last

13 Dec 2007

The investment bank s retail analyst finally said aloud what many inside the bank have no doubt been thinking about the UK retailer. His sell rating won t undo the damage from being associated with the disastrous IPO, but sometimes a holler just feels good.

Rentokil slump shows danger of past success

13 Dec 2007

Shares of the support services firm fell 22% after a fourth quarter profits warning. Problems in parcel delivery were the trigger. But this falling star continues to drop. Investors have now given up their last shreds of confidence that the company can provide defensive growth.

Eddie Lampert needs to spell out his Sears strategy

29 Nov 2007

Sears is either a struggling secondtier retailer or a hedge fund in disguise. Today's disappointing results make it look more like the former. Of course, Eddie Lampert may have a few tricks up his sleeve. If he does, it's time to let shareholders know.

Sainsbury’s not quite back to the day job

14 Nov 2007

Looking at the UK grocer's share price, strategy and performance, it's as if the Qatari state's failed £13bn raid never happened. But two hangovers remain: an unstable shareholder base, and a cadre of managers who almost made a mint.

Tchenguiz fails to turn bricks into gold

6 Nov 2007

The UK property whiz looks to be nursing a £180m loss after his Sainsbury adventure turned sour. That follows hard on his failure to clinch a property deal with Mitchells & Butlers. It's not just the financial hit that's painful. Tchenguiz's ability to pull off similar deals may be hampered after campfollowers also lost a packet.

Grocers unscathed by UK competition probe

31 Oct 2007

The regulator has confirmed what was already clear. Supermarkets give shoppers a good deal, and real estate rather than size is their most powerful weapon. Tesco s past land grab may explain its present dominance. But the regulator should be wary of trying to remedy the situation.

Why Qatar should check out of Sainsbury’s

29 Oct 2007

The Gulf state s bid vehicle wants £500m more cash to carry off the UK supermarket group. It would be better if the sheikh said no. He may not do so, of course. But Qatar s reputation and coffers are unlikely to be served well by this overpriced deal.

Luxury stocks may weather retail slump

3 Oct 2007

US retailers are preparing for the worst as the holiday season approaches. Consumers won t stop spending, but they may be more selective. Luxury brands usually hold up better than most. Shares of companies like Polo and Tiffany don t come cheap but they may be worth it.

Skewed incentives may explain Qatari bravado

2 Oct 2007

State funds like Qatar s are paying top whack for assets like J Sainsbury. Maybe it s just because they can but there could be a less exotic reason. The structure of some of these investments means that if funds overreach, the person driving the investment has less to lose than the one paying for it.

Tesco’s empire building pays off

2 Oct 2007

Thanks to the supermarket group s sheer scale, registering the lowest UK likeforlike sales in years looks little more than a blip. As the UK gets more mature, Tesco has to keep moving to retain momentum. But for now, its expansion machine still looks undervalued.