Breakingviews

Apple may be in for model-cycle purgatory

January 27, 2016

The $550 bln tech giant’s top line nearly flatlined as demand for its smartphones stalled in the last quarter of 2015. Sales are set to slide in the current period. A $216 bln cash hoard and a low valuation should offer solace, but investors could fixate on the next new iPhones.

Tesco recovery starts with some gorilla tactics

January 14, 2016

The UK retailer’s sales have bounced back to growth. The reason is that Tesco is cutting costs sharply, shoring up its dominant market share. It’s an essential part of a retail turnaround, but doesn’t immediately help the bigger goal of generating cash to reduce its indebtedness.

When UK retailers fight, shareholders lose

January 13, 2016

Sainsbury, like rival Morrison, says sales are improving after years of declines. What’s really happening is that grocers scrabble for revenue at the expense of profit, while the whole market stays flat. The other signs investors care about are going in the wrong direction.

Inditex is priced for perfection

December 10, 2015

Shares in the Zara fashion retailer are up some 35 percent this year, against a 7 percent fall for rival H&M. Inditex’s nimble business model and strong double-digit earnings growth explains why. But currency fluctuations could slow its stellar trajectory.

Britain’s “Black Friday” better left on the shelf

November 27, 2015

The Thanksgiving shopping orgy, recently adopted by the UK, is unhelpful for all concerned. Consumer credit is spiralling, confidence falling and retail margins are under pressure. If shoppers and retailers take a rational view of low prices, the festival will snuff itself out.

Alibaba Singles’ Day frenzy confuses growth debate

November 12, 2015

The Chinese e-commerce group processed transactions worth a staggering $14.3 bln on Nov. 11, 60 pct more than last year. Yet the boost is unlikely to have much impact on annual volumes. One day of online discount shopping also provides few clues about Chinese consumption.

New look M&S has incomplete designs

November 4, 2015

First-half results show the 8.5 bln stg UK retailer has done much to improve itself internally - non-food gross margin guidance was revised up, again. But Marks & Spencer needs to get the top line moving to deliver sustained returns. Fashioning external appeal is a harder task.

Singles’ Day spat shows Alibaba’s jealous side

November 4, 2015

The Chinese e-commerce giant’s annual Nov. 11 shopping promotion has become a national festival. Now a smaller rival has accused Alibaba of bullying merchants into using only its platform. Market power may be good for driving sales, but not if it prompts regulators to weigh in.

Searching for China consumer bellwethers is futile

October 28, 2015

Dubious about official data, investors are scouring corporate results for clues about shoppers’ confidence. Yet iPhone sales, e-commerce transactions and demand for fried chicken offer few clues. There are no consistently reliable proxies for the world’s second-largest economy.

Investors coax Walgreens Boots to swallow Rite Aid

October 27, 2015

Scooping up the No. 3 U.S. drug chain strengthens $98 bln Walgreens as it battles domestic leader CVS. Antitrust is an obvious question given the rough ride Staples has faced with Office Depot, but the hurdles look manageable. Shareholders are certainly not worried.