Retail

Morrison shows early signs of stabilisation

11 Jan 2006

After five profit warnings, the UK retailer is finally meeting expectations. Many stores with new formats are doing better than expected. With the company due to unveil new restructuring plans in March, investors will be hoping it has turned the corner.

M&S offers little cheer for rivals

10 Jan 2006

After last year's festive bloodbath, the UK retailer has beaten expectations, with food sales motoring ahead. But while M&S feels the effects of its turnaround, other retailers may not be so lucky. And even M&S may find the quick wins are behind it.

Home Depot goes after builders with $3.5bn deal

10 Jan 2006

The home improvement retailer is backing up plans to sell more to contractors, plumbers and the like with its biggest takeover ever. But the price it is paying for Hughes Supply is high and it may take its eye off the ball as rival Lowe s pounces on retail clients.

Time to switch from M&S to Next

4 Jan 2006

Next, which had a dismal time before September, has put in a decent performance over the crucial Christmas trading period. Meanwhile, M&S s shares have had a great run. The retailer s recovery may be on track, but its near15% premium to Next now looks too wide.

Triarc could use some of Peltz’s own medicine

30 Dec 2005

A breakup of Triarc, the investment company of the billionaire, and Wendy s gadfly, Nelson Peltz, could unlock value. Thankfully for investors, he s planning one. Spinning off its hedge fund arm may make for tastier returns than anything Wendy s cooks up.

Dunkin’ deal comes with hefty debt gulp

14 Dec 2005

Bain, Carlyle and TH Lee are borrowing debt equal to 8.5 times ebitda a level not seen since in the US since the 1980s LBO bubble. The private equity firms are buying Dunkin for its growth. But such a heavy debt load could spoil their appetites.

Wal-Mart’s stock at bargain price

6 Dec 2005

The share price of the world s largest retailer has been dogged this year by economic uncertainty and slowing sales growth. WalMart s woes are exaggerated. The company s profits growth remains robust yet its shares are now valued on a market multiple.

Ahold settles lawsuit for $1.1bn

28 Nov 2005

That s about 10% of the Dutch retailer s market value. But its balance sheet is now strong enough to take the hit. Drawing a line under the scandal makes sense especially as Ahold may need to bulk up its US operations to pep up faltering growth.

EU sugar reform deal boosts Tate & Lyle

25 Nov 2005

The UK sugar refiner emerges as the big winner from the EU s deal to cut sugar tariffs. Crucial concessions were secured at the last minute that should enable it to compete on a more level playing field against beet processors.

Sainsbury family lifts its dead hand

22 Nov 2005

The family trustee is on course to cut its holding in the eponymous retailer by up to 5%, taking its stake below the critical 30% level. This is good news. The family was long an absentee landlord at Sainsbury, which helped precipitate last year's crisis.

Metro forced to float Praktiker at steep discount

17 Nov 2005

The retailer overestimated German investors' enthusiasm for the DIY chain s shares. A VAT hike during the offering didn t help. Metro is now paying the price. It has been forced to swallow an IPO discount of 25% to 30%. That should be enough.

Sainsbury’s life about to get tougher

16 Nov 2005

The UK supermarket has made a decent start on its turnaround plan. But that s compared to the hole it had previously dug for itself. Going forward, the sales target will be harder to hit. And if its growth slows, Sainsbury will struggle to fatten up its thin margins.

M&S gets to have cake and eat it too

8 Nov 2005

The retailer has been cutting prices to lure customers back. Normally, this leads to falling margins before the price cuts boost sales. But M&S's margins are actually going up.

Have Next and M&S swapped places?

6 Nov 2005

While M&S has finally got its act together, the former highflyer has seen its stock slump by 18% in the last year. Next may now look superficially cheap. But poor trading and its dizzying expansion into a downturn are big concerns.

Polygon swoop on Peacock may be last of its kind

2 Nov 2005

The UK hedge fund has popped up out of the blue with a 14% stake in the UK retailer. It reportedly amassed this by converting derivatives into voting stock. But, from Monday, others won t be able to copy these tactics.

Praktiker IPO not as wobbly as it looks

1 Nov 2005

It looks a nightmare. A German retailer that was a dog the last time it was on the market. Oh, and private equity just turned it down. But the E1bn DIY chain is actually a wellrun recovery story. At a suitable discount, it looks a reasonable bet.

Hedge funds muscle into Peacock buyout

1 Nov 2005

They have been able to get in because they need lower returns and are less fixated on control. Peacock may look a special case. It s a growth company. But this shows how hedge funds may cherrypick the juiciest buyouts.

Darwinism catches up with oldest listed company

1 Nov 2005

Hudson s Bay Company has survived many problems in its 335year history including a French onslaught and corporate governance scandals. But the Canadian retailer has been less successful in stopping WalMart invading its territories. That may finally cost it its independence.

Wal-Mart worries workers linger too long

27 Oct 2005

The retailer could cut healthcare costs by raising its employee turnover rate. This would boost the bottom line. But unless it is careful, WalMart could end up sapping staff morale and escalating its public relations woes.

Wal-Mart calls for a higher US minimum wage

25 Oct 2005

The retailer says higher wages would boost spending by its main lowermiddle class customer base. In fact, it is keen to raise labour costs for its competitors. But the higher minimum wage will backfire for WalMart, too.