Summit Notebook
Exclusive outtakes from industry leaders
Perils of disaster fixation
By Tim Kelly
Fixated on reviving the shattered northeastern seaboard, Japan risks neglecting growth in the rest of the economy, warns Takeshi Niinami, CEO of Lawson, Japan’s second-biggest convenience store operator.
“The question is what do you do about the other 95 percent of the economy,” Niinami told the Reuters Rebuilding Japan Summit in Tokyo.
His remedy: throw Japan open to the rest of the world and deregulate, policies more in vogue before Japan’s March 11 earthquake than since.
Niinami wants Japan’s politicians to rediscover their pre-quake appetite to thrust Japan into trade pacts either with Southeast Asian economies or the Trans-Pacific Partnership, a policy that Prime Minister Naoto Kan enthused about at the start of the year but since March 11 has dropped.
Opening up Japan is not just about letting foreign people, ideas and capital in, he says, but also about companies moving out.
Talbots still has too many shops: shortseller
Apparel retailer Talbots announced a deal that will reduce its debt by about $330 million through its purchase of a blank check company.
The company, which caters to older women, has suffered since it bought trendier retailer J. Jill in 2006 for $517 million. But it resold it this year to private equity firm Golden Gate for $75 million.
Shawn Kravetz, who is president of Esplanade Capital, which focuses on consumer and retail stocks, had this to say about the J. Jill acquisition at the Reuters Investment Outlook Sumit: “It will go down as being one of worst acquisitions in the history of retail.”
On the news of Tuesday’s deal: “Talbot’s was in a turnaround before it was in fashion. ” “If the global financial crisis had lasted just another week or two, and they hadn’t effectively been bailed out but one of their investors, they might have gone away.”
On the number of Talbots stores: “We could easily live with many fewer Talbots stores– if given a blank check, I am sure Talbots would be delighted to close a lot of them.”
(PHOTO: Reuters)
All I want for Christmas is a blockbuster
What’s a great holiday gift in a recession, yes a good old fashioned book. Random House just got its new Dan Brown bestseller on the shelves.
Pearson’s Chief Financial Officer admitted that its consumer publisher Penguin does not have a blockbuster for the holiday season but — in a rare glimpse of corporate honesty — said it sure would like to have one.
“ I think we’ve got some good books for Christmas,” Pearson’s Robin Freestone said at the Reuters Media Summit on the upcoming holiday shopping season.
“We haven’t got a blockbuster in the sort of Dan Brown mode or the Stephanie Meyer mode. We sort of pretend we don’t really want a blockbuster but that isn’t true at all.”
“We’d love to have a blockbuster… but we have some suprises,” he said.
“The MI5 history, which is a whopping great thick book, is selling extremely well. “
Retail in recession: bottoms, bananas and breeding
So, what did we learn from executives in the hard-hit luxury and main street retail sectors this week at the Reuters summits?
The idea of a “new normal” age of lower consumerism was in vogue, with many executives expecting consumers to continue to be thrifty for some time. Conspicuous consumption may be dead, they say.
Heck, even Tiffany’s is attracting hagglers.
Even the Saks CEO is “Staycationing” in the downturn. Of course, not everyone is cutting back, so Hermes still needs supplies of crocodile hides to make $35,000 handbags. The company’s solution? Breed its own.
The word “bottom” was also bandied about. Executives were hesitant to say the economy had definitely hit bottom. But many did see some leveling off. EBay CEO John Donahoe, for example, said he has seen some stabilization in demand, as did VF Corp CEO Eric Wiseman.
Taittinger chief Pierre-Emmanuel Taittinger isn’t even concerned about the bottom line. Just bottoms up.
And about those young American women with the word “Juicy” on their sweatpants bottom? We may not be seeing that as much, said Juicy Couture President Edgar Huber.
