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from Edward Hadas:

In praise of restrained enterprise

By Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

British supermarkets are doing something unusual. They are following the rules of textbook economics: responding to competition by cutting prices. Such behaviour is rare. While business bosses often say they admire free enterprise, we actually live in a restrained enterprise economy. Everyone should be grateful.

J Sainsbury, the No. 2 in the British grocery market, is the latest established competitor to suggest that its profit is sliding. Its admission follows grim announcements from market leader Tesco and Wm Morrison. Tesco has already cut its interim dividend by 75 percent, and Sainsbury is likely to follow.

The big problem for the established UK chains is the advent of so-called hard discounters, most notably German chains Aldi and Lidl. They have lower costs so can charge less and still earn good profits. The main response from the market leaders has been to cut prices. The battle is an excellent example of how capitalism spawns creative destruction. Shareholders of the losing companies suffer, but the overall economy benefits.

from Breakingviews:

PayPal forced to rev after eBay’s belated U-turn

By Rob Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

PayPal is compelled to accelerate after eBay’s belated U-turn. The $70 billion online auction company has for years resisted setting free its payments business, most recently digging in its heels against Carl Icahn’s demands to do so. Apple and Alibaba have created more urgency than investors, or Breakingviews, could. EBay squandered a big early advantage, but a spun-off PayPal may have a chance to play catch-up.

from Breakingviews:

UK retail fails to weather the patently obvious

By Robert Cole

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Talking about the weather is a British national pastime. It cannot have escaped the notice of anyone living on an island in Europe’s north west fringe that it has been unseasonably warm in the last few weeks.

from Breakingviews:

Tesco chairman should step aside

By Chris Hughes

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Tesco’s chairman should step aside. Richard Broadbent will struggle to restore market confidence in the troubled UK supermarket group, and to convince investors the board is on top of matters. This week’s accounting scandal has compounded existing concerns about his period at the helm. The priority should be an orderly handover to the right successor as soon as possible.

from Breakingviews:

Tesco chairman approaches his sell-by date

By Chris Hughes

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Tesco’s latest crisis has put Richard Broadbent in the last chance saloon. The chairman of the UK retailer is ultimately accountable for any failures in the UK grocer’s governance. That includes any that lie behind the 250 million pound hole in the accounts, revealed on Monday.

from jharonnemartis:

WILL THE ALTUZARRA COLLECTION HAVE ‘LEGS’ AT TARGET?

Target Corp. (TGT.N) has partnered with young and compelling fashion designer Joseph Altuzarra to launch a much-anticipated line of fashionable women’s clothing. The news went viral on social media on the Sept. 14 launch and crowds showed up early at the stores to check out the styles. Will this early enthusiasm translate into a sustained comeback for the giant retailer? That might be a moving target.

Target has done this before, many times. Its 2011 collection with the Italian label Missoni generated so much traffic that the target.com website crashed. The chance to get haute design glamor at an affordable price has proven to be irresistible.

from Breakingviews:

Alibaba’s small IPO hike leaves room for believers

By Peter Thal Larsen

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Pricing initial public offerings is an inexact science. Predicting how investors will value a large, fast-growing Chinese e-commerce group involves even more guesswork. That makes Alibaba’s decision to lift the maximum price for its upcoming stock market debut by just $2 a share to $68 puzzling.

from jharonnemartis:

LOOKING AT BEST BUY IN LIGHT OF RADIO SHACK’S TROUBLES

RadioShack Corp. (RSH.N) is encountering major static from an online marketing environment. The nearly century-old company said on Sept. 11 it may need to file for bankruptcy protection, after reporting its tenth straight quarterly loss. We look at another retailer with a big investment in bricks and mortar – Best Buy Co. Inc. (BBY.N),which is going through its own troubles.   

StarMine analysts seem to like the fact that BBY is cutting costs and seeing strength in appliance sales. However, is this really sustainable in the long run?

from Breakingviews:

Home Depot hack scarier than Hollywood breach

By Richard Beales

The author is a Breakingviews columnist. The opinions expressed are his own.

It’s no surprise that stolen nude photos of Jennifer Lawrence attract more attention than a nerdy report on Home Depot’s security breach. But it’s an unfortunate reality that Hollywood celebrities need to guard their privacy, whether threatened by paparazzi or hackers. Corporate breaches that expose millions of people to financial loss are, on the other hand, in a different league.

With Home Depot, it’s not yet clear what the scale of any hacking may have been, or whether the company’s systems were violated despite strong defenses. But security blogger Brian Krebs said he had received information suggesting the Home Depot episode could be larger than last year’s hack of Target. That attack, which he first publicized, exposed the credit card data of at least 40 million customers.

from Breakingviews:

LVMH, Hermes in five-year handbag peace

By Carol Ryan

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Bernard Arnault has conceded defeat. The LVMH chairman and controlling owner has agreed to distribute the stake he built up four years ago in rival Hermes to the shareholders of his luxury and drinks conglomerate. That’s an uncharacteristic retreat for the man dubbed “the wolf in cashmere.”

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