Breakingviews

Debenhams plucks new CEO from arms of its nemesis

May 26, 2016

Amazon is the worst thing that could happen to stodgy old department stores. Yet that’s where Britain’s Debenhams found new boss Sergio Bucher. That makes it one of a handful of UK high-street names headed up by a digital ace. The hire sounds odd, but could be inspired.

Burberry could use refresher in old-school retail

May 17, 2016

A sector-wide slowdown has exposed the inefficiencies in the UK label’s operations. High costs and low sales density show room for tailoring. Burberry chief Christopher Bailey needs help, but of a less than luxurious kind - specifically, some traditional retail expertise.

Tesco boss spies a possible bargain

May 13, 2016

Dave Lewis is opting to take 75 pct of his bonus in shares. That aligns his 4.6 mln pound pay package better with shareholders, whose stock slumped last year. Since Tesco sales are now turning round, his timing may be shrewd. The group stocks a lot of things, but not hair shirts.

One thing Tesco doesn’t stock is pricing power

April 13, 2016

Same-store sales and operating profit are rising, but prices on the UK grocer’s shelves keep falling. It’s a problem for rivals too. Tesco used to be dominant in a concentrated market; now it’s just plain big. Consumers’ gain will be investors’ loss for the foreseeable future.

Cox: Dan Loeb helps one Abenomics arrow hit target

By Rob Cox
April 7, 2016

Forget the Bank of Japan’s negative interest rate blunder, or the government’s muddled fiscal policies. Prime Minister Shinzo Abe’s corporate-governance reforms hold the most promise. The pushy investor’s fight with the operator of Seven-Eleven convenience stores offers a useful glimpse.

British retailers need more age-appropriate attire

March 24, 2016

Next’s same-store revenue is falling and inventory is taking a week longer to clear than a year ago. Yet it plans to grow its selling space by 8 pct. Other retailers too are expanding even when shrinking looks smarter. The maths of such strategies can quickly turn unattractive.

Sainsbury can open its wallet wider for Argos

March 15, 2016

The UK grocer’s like-for-like sales have turned positive, but prices are still falling. A proposed 1.4 bln pound merger with rival Home Retail is a decent coping strategy, if Sainsbury can beat rival bidder Steinhoff. A boost of 10 pct would still just about make financial sense.

Burberry bid would be an extravagance

March 8, 2016

The trench-coat maker is the subject of takeover speculation but a deal, which could cost 8 bln pounds, doesn’t stack up. Its stock isn’t particularly cheap and costs are already lean. With the luxury sector deteriorating, it’s not clear a new owner could halt slowing sales.

HNA’s $6 bln Ingram bid has weird Chinese logic

February 18, 2016

There’s no clear rationale for the conglomerate to buy a U.S. electronics distributor and leave its management and business untouched. But like other recent outbound Chinese deals, the acquisition gives HNA diversification, political capital, and a hedge against the sliding yuan.

Cox: Scope out the bank in U.S. retail camouflage

By Rob Cox
February 16, 2016

The business model of Cabela’s, which is up for sale, resembles a $3.2 bln chain of taxidermy museums issuing unsecured debt to assault-rifle buyers. Most of the profit at the “World’s Foremost Outfitter” comes from a loan book ballooning in ways that should give suitors pause.