Retail

Prada heads up queue for luxury IPO runway

4 Dec 2006

Prada, Armani, and Versace are all reportedly planning flotations in 2008 partly to cash in on luxury s doubledigit growth story. But sustaining that growth will bring these fashion brands new risks. And Prada for one has yet to prove its financial discipline.

Can Home Depot find a private domicile?

1 Dec 2006

A $100bn LBO of the home building supplier isn t as crazy as it sounds. There s enough liquidity sloshing around for a deal. The buyers could even make a decent return. And boss Nardelli might welcome a bid after his lashing from shareholders earlier this year.

Sears deserves a Lampert premium

1 Dec 2006

Deutsche bank reckons that his investment skills are worth a whopping $121 per share or nine times the company s cash on hand. That s excessive. However given his superior asset allocation skills the current premium is more than justified.

Hugh Osmond misses out on £1.3bn

27 Nov 2006

That s what the UK entrepreneur would this week be collecting if his opportunistic breakup bid for Six Continents in 2003 had succeeded. SixCon rightly concluded it didn t need to pay Osmond a huge slice of the upside for something it could do itself.

Wal-Mart’s India deal no great loss for Tesco

27 Nov 2006

The UK retail giant may have lost out on a contract with mooted partner Bharti to step into India s £120bn retail sector. But in retail, being first isn t always best. And India has plenty more rich familyowned conglomerates to go around. The UK retail giant may have lost out on a contract with mooted partner Bharti to get a foothold in India s $210bn retail sector. But in retail, being first isn t always best. And India has plenty more rich familyowned conglomerates to go around.

Versace dresses up for IPO

23 Nov 2006

Now Di Risio is in expansion mode. That points to a possible IPO in 2008 that could allow some of the shareholders to cash in. The coming of age of Allegra Versace has allowed CEO Giancarlo Di Risio to limit Donatella and Santo Versace s grip on the troubled group.

Stork tries to frustrate hedge funds

17 Nov 2006

The Dutch conglomerate wants a court to investigate whether Centaurus and Paulson were acting in concert before they told the market. This looks like a device to frustrate the hedge funds' own attack on Stork's strategy. It deserves to backfire.

Alliance Boots looks overvalued

14 Nov 2006

The £8bn merger that created the UK healthcare group is on track. But beneath the makeup, Alliance Boots still looks pretty wrinkly. At 18 times next year's earnings, investors should be focusing less on the merger and more on Alliance Boots' decidedly plain prospects.

Sainsburys’ investors bet on King

12 Nov 2006

The UK food retailer s shares are up 60% since Justin King took over two years ago. Sainsburys is now twice as expensive as rival Tesco. At these levels, talk of a possible private equity bid looks odd. But at least King hasn't yet given investors any reason to check out.

MasterCard submits to Wal-Mart

9 Nov 2006

Shoppers can finally use a credit card at WalMart s bulk discount retailer Sam s Club. But it has to be MasterCard and not Visa. WalMart has done this before. It kept MasterCard out as its IPO approached. Now it s putting the screws on Visa as it goes public.

Overstock understocked with capital

7 Nov 2006

The internet retailer s CEO, Patrick Byrne, has spent more time fighting critics allegedly led by a Sith Lord than running the business. His efforts have been entertaining, if misplaced. The group may need to raise more cash next year. That will be very difficult.

UK retail space race is risky

7 Nov 2006

M&S, Next and Debenhams are opening new stores faster than customers can fill them. For some, sales in existing stores are declining. Why? They need scale, and reckon they can stimulate demand before their margins get squeezed. But not all will come out unscathed.

Ahold restructuring does only half the job

6 Nov 2006

Hounded by hedge funds, the Dutchlisted food retailer is selling its US Foodservice arm and returning E2bn to investors. That's a start. But in taking the easy option, Ahold hasn't addressed concerns that its US and European retail businesses don't really belong together.

Unilever gets it half right

2 Nov 2006

The consumer goods giant s Q3 growth of 4.8% is impressive for Unilever, anyway. But how long before that growth turns profitable? Unilever needs to absorb thudding cost increases and plough money into marketing. But the share price leaves little room for disappointment.

Wal-Mart looms over CVS-Caremark deal

1 Nov 2006

That s because fear of WalMart is driving the deal. When the world s largest retailer moves into a market, margins tumble. The US pharmacy chain and drug middleman have agreed to merge. Yet the market seems oddly cool to the $47bn combination.

Wal-Mart shouldn’t sell skinny jeans

30 Oct 2006

Several big box retailers like WalMart and Home Depot have simply grown larger than their customer base. Returns on investment are falling. Both are responding with risky moves into new markets. McDonalds offers a good example of diversifying without alienating customers.

Amazon scales back ambitions

25 Oct 2006

Investors have cheered the decision by the internet retailer to scale back technology spending. This is the right decision for its low margin business. The dilemma is that Amazon needs bells and whistles to justify its valuation.

Wal-Mart’s $1bn Chinese takeaway should pay off

17 Oct 2006

Paying through the nose for 100 Chinese hypermarkets may ring alarm bells. After all, WalMart has made a fist of overseas expansion before. But the group needs growth, and China s $680bn retail market has bags of it. Besides, WalMart looks like it's learning from past mistakes.

Stork throws down gauntlet to management

12 Oct 2006

Nearly 90% of shareholders voting backed calls by two hedge funds to break up the Dutch conglomerate. To date, Stork s position has been it can ignore any vote. But after such a clear message that is no longer tenable.

Eddie Lampert keeps markets churning

11 Oct 2006

After Gap, Home Depot and GM, the latest rumour has the billionaire investor bidding for $37bn brewer AnheuserBusch. Even more preposterous was the response of Sears investors, who a month ago booed his plans to go shopping. Now they cheer them?