Retail

Retail LBO craze may take a knock

23 Jan 2005

The situation at Allders, where debt was piled onto an underperforming UK retailer, shows how such deals can go badly wrong. Investors betting that private equity will snap up bombedout retail stocks should beware.

Don’t bet on Galeries Lafayette

20 Jan 2005

But even if GL broke itself up, it would struggle to extract much more value than currently implied by the share price. The French department store's investors may hope Credit Mutuel's stakebuying heralds some big corporate restructuring.

Tesco cautions on future growth

18 Jan 2005

The UK supermarket giant says it will be happy with 34% likeforlike growth this year down from its stellar 7.6% growth over Christmas. Tesco will slow as rivals recover. But the 34% figure looks like expectations management. It should do better.

Karstadt 2004 sales fall 7%

11 Jan 2005

The German retailer s fourth quarter was particularly poor, despite signs of a pickup in overall German retail sales over Christmas. Much now hangs on Karstadt's disposals plan. The poor performance of its speciality stores will make them harder to sell.

Morrison suffers in consumer slowdown

11 Jan 2005

The supermarket group s efforts to integrate Safeway are not being helped by the gathering downturn in retail spending. WM Morrison has indicated it is on course to meet market expectations this year, but next year is likely to prove even more challenging.

UK retail dogs have had their day

9 Jan 2005

Investors are betting that slowing consumer spending will pave the way for private equity groups to buy up underperforming UK retail stocks. But this is a highrisk investment strategy. The best bet is to stick to the established stars like Tesco.

M&S slashes profit forecast

7 Jan 2005

This is bad news. But it probably doesn't mean the turnaround under Rose, the newish boss, is off the rails. Much of the problem is down to old stock. For now, Rose should be given the benefit of the doubt. But he can't blame the past forever.

Murky dealings at Galeries Lafayette

5 Jan 2005

Minority shareholders are right to demand an explanation for the recent manoeuvrings at the iconic French department store. Something is clearly afoot. But it is not clear what. And the controlling shareholders aren t telling.

Partying like it’s 1999

24 Dec 2004

Failed business models of the sort last seen in the late 1990s are getting a new hearing in the UK stock market. The latest is Ocado, the lossmaking grocery delivery group, which is murmuring about floating.

Can Duke Street finally get shot of Focus Wickes?

9 Dec 2004

Two years after an aborted floation, the private equity house has put Britain s third largest DIY group up for sale. Finding a buyer for the tradeorientated Wickes won t be hard, but it may struggle to offload the consumerorientated Focus chain.

Investors should avoid Karstadt rights

8 Dec 2004

The German retailer's lenders don't believe in its rescue plan. The rescue loan they have made is hedged with incredibly tight covenants. Add that to the fact that the group is undercapitalised, and it looks like investors would be chucking good money after bad.

Why is Sainsbury twice as expensive as M&S?

5 Dec 2004

Both retailers are struggling to cope with faltering sales and ambitious turnaround strategies. But Sainsbury trades on 25 times next years earnings, while M&S trades on a p/e of about 10. Why?

Carrefour would be a tall order for Tesco

30 Nov 2004

Tesco is rumoured to be mulling a tieup. But it's hard to see where it would find the synergies to justify a E38bn price tag for Carrefour. The risk is that the UK supermarket group would take its eye off the ball at home, just when it is doing so well.

German workers face more pain

26 Nov 2004

Most of the pressures forcing German companies to reform aren t new. But a strong euro and soaring oil prices have made costcuts urgent. Unions and politicians are gradually accepting the need for painful restructurings. And that s likely to encourage further change.

Tesco shares may have further to run

25 Nov 2004

The UK supermarket giant is putting daylight between itself and competitors like Wm Morrison, Asda and Sainsbury. Tesco's shares have already rallied. But if it carries on growing at anything like its current rates, they are not yet fully valued.

Investors threaten Karstadt refinancing

23 Nov 2004

Some shareholders argue it should flog more assets and not raise equity. That's frankly barmy. It's like turkeys voting for Christmas. Yet under German law, this trivial challenge could delay and even scupper the refinancing. That seems absurd.

Kmart swallows Sears in $11bn deal

17 Nov 2004

Talk about a deal for our time: the merged retailer, led by a hedge fund mogul, will try to take the biggest chainstore, WalMart, headon. Increased efficiencies will help and even create value for shareholders but they won't transform these two tired chains overnight.

Dixons stokes retail slowdown worries

17 Nov 2004

Its trading update is pretty gloomy. And that matters because electrical retailers are often the first to turn when consumers stop spending. That doesn t necessarily mean a bloodbath in the high street. But evidence of a consumer slowdown is mounting.

This may be a good way to avoid selling assets at a poor price. But it will further stretch Karstadt’s balance sheet.

15 Nov 2004

The German retailer is reportedly talking to banks to raise an extra E500m in loans, just weeks after announcing a restructuring plan.

Stuart Rose tightens his grip on M&S

9 Nov 2004

The retailer's chief executive is halving the number of executive directors and taking direct control of many areas of its operations. This should help the core business respond more quickly something that's needed if the firsthalf figures are anything to go by.