Retail

Coach’s valuation looks a bit stretched

23 Apr 2007

The leather goodsmaker has shed its once stuffy image and reinvented itself as a fashion brand. The transformation has won applause from both customers and investors. But it has also stretched Coach's valuation out of shape.

Boots’ £12bn auction turns feverish

20 Apr 2007

No sooner had the retailer s board recommended a 1090pashare offer from KKR, than a rival group led by Guy Hands jumped in with 1126p. Maybe Boots board was wrong to think KKR's initial 1040p deserved its support. More likely, KKR and Hands have a case of bidder s delirium.

Adidas could be a smart target for Apax

18 Apr 2007

The German sportswear group has a strong brand, and is undergeared. There's also the chance to add value by sorting out Reebok. The deal is doable. There's no big shareholder and no obvious trade buyer. If Apax can stakebuild, it can shut out private equity rivals.

Debenhams comes apart at the seams

17 Apr 2007

Debenhams has only been on the market for a year. The best thing now might be for a private equity buyer to take it off again. The UK department store has been expanding rapidly to keep sales growing. But a profit warning shows the strategy is failing.

Citigroup shows difference a float can make

17 Apr 2007

The Sports Direct analyst became less upbeat after the float, even though new information was scarce and the shares looked cheaper. The note helped push the UK retailer's shares down a further 13%. The lesson? The purpose of research changes after a float.

Sainsbury’s should listen to Tchenguiz

16 Apr 2007

A demerger offers plenty of upside, including greater transparency, better management focus, and access to a wider specialist investor base. The property tycoon s campaign to persuade the UK supermarket group to spinoff its property via a real estate investment trust isn't voodoo.

Time for PPR to shed old retailer clothes

12 Apr 2007

Acquiring Puma would load up the French conglomerate with debt. A full acquisition could lead to a ratings downgrade to junk status. PPR should start to sell retail divisions that have nothing to do with luxury or fashion. It would make both financial and strategic sense.

What should Sainsbury’s do next?

12 Apr 2007

With private equity predators in retreat, the retailer's board will need to address J Sainsbury's substantial property assets. Here are two ideas. Let investors know what the property is really worth. Then resist inevitable pressure to sell it.

Puma bid makes Nike shares look cheap

12 Apr 2007

Nike has lost its zip of late. The company that set the pace in athletic apparel has fallen behind both established rivals and upstarts. Its iconic swoosh logo has also been tarnished by overexposure. But PPR's bid for Puma suggests there is value in the sneaker business.

Could rivals snatch Boots away from KKR?

11 Apr 2007

It won t be easy, since KKR has already signed up the biggest shareholder. But Terra Firma and the Wellcome Trust are interested. There is also the question of finding £4bn in equity. But Terra Firma s Guy Hands may have a trick up his sleeve.

Sainsbury’s bid turns into battle of strong wills

10 Apr 2007

The family looks a bit irrational and the private equity consortium looks demanding. The Sainsbury clan s opposition to a 582p bid will make it hard for the bidders to get 75% of the votes. Both sides seem too stubborn.

PPR unlikely to face counterbid for Puma

10 Apr 2007

The French conglomerate can t offer the German shoemaker anything like the synergies available to Nike. And the PPR holding is only 27%. But investors shouldn t hold their breath. PPR has effective control over the board, and won t be rattled by another big shareholder.

PPR pounce on Puma makes fashion sense

10 Apr 2007

Despite enormous marketing spend, the German sportswear group is still seen as more of a lifestyle than athletic brand. It could help PPR bridge the gap with its luxury marques. But the 24% premium put on Puma and will have PPR seriously sweat the deal.

KKR smart to check out of Sainsbury’s

5 Apr 2007

Bidding for both Sainsbury's and Boots could have given the buyout firm competition problems. But that's not the only reason to walk away. A Sainsbury s buyout offers less glory, as KKR would have to share the spoils with rivals. It s also less likely to be a success.

Private equity should call Sainsbury trustees’ bluff

4 Apr 2007

If the UK grocer s pension fund trustees insist private equity plug the full £3bn buyout deficit, the bidders should go to the Regulator. The buyout measure is far too conservative. The regulator says he does not want to be a barrier to M&A. Now he can prove it.

Sainsbury’s LBO won’t be as easy as Boots

3 Apr 2007

At first glance, the two £11bn retailers, both facing private equity leveraged buyouts, look pretty similar. But the Sainsbury s consortium has several big hurdles to clear. Not least the risk that one partner, KKR, may be forced to withdraw.

Boots gatecrasher Celesio has work cut out

2 Apr 2007

A counterbid for the £11bn UK healthcare group would be fraught with problems like how to make the deal attractive to a buyout partner. But Germany s Celesio is no stranger to spoiling tactics. And the chance to take its biggest rival apart looks too good to pass up.

Fortune favours KKR in Boots financing

2 Apr 2007

Normally high fixed costs make it hard to gear retailers up to the gills. But special features mean Boots can bear more debt than most. Even so, KKR would need to inject scads of equity. Fortunately it has a major coinvestor in Boots deputy chairman Stefano Pessina.

Home Depot may be a good fixer-upper

27 Mar 2007

The collapse of home sales in February delivered the latest hammer blow to Home Depot's stock price. But beneath its weathered exterior, the DIY giant is starting to look like a bargain.

Why Asda should consider a £11bn Sainsbury’s bid

27 Mar 2007

A combination of WalMart's UK unit with rival Sainsbury would be an instant marketleader. But that might promote, not limit competition. Even if regulators eventually nix the idea, the lengthy hooha would give Asda an ideal opportunity to grab Sainsbury s market share.