- Angela Gonzalez-Rodriguez |
Although the heat wave is starting to recede in the UK, the publication of official data of consumer’s confidence in June, as well as inflation, promise to keep heating the retail market. The industry is expecting big players such as Burberry or Sports Direct to lift the spirits and dismiss the deflation woes.
On Tuesday, the British Retail Consortium publishes its sales monitor for June, which is tipped to show healthy growth after official data from the Office for National Statistics (ONS) revealed volumes in May were 4.6 percent higher than a year ago, advanced the ‘Telegraph’.
Meanwhile, economists don´t agree on whether official figures to be revealed by the ONS Tuesday will reveal consumer prices index (CPI) was steady at 0.1 percent or fell back into deflation. In this regard, Morgan Stanley economists believe the CPI fell to minus 0.1 percent in June on the back of lower clothing and furniture prices.
However, the private bank´s economists remain positive and predict the move will be temporary, with inflation creeping back into positive again this month and remaining “flattish” before starting to rise in the third quarter of the year, reports the ‘Scotman’.
Equally positive is Howard Archer, chief UK and European economist at IHS Global Insight, who calculates June’s CPI will have held steady at 0.1 per cent amid “some firming of food prices and overall less discounting by retailers than a year ago”, reports the ‘Scotman’.
Regarding corporate releases, Burberry will take the industry by storm on Wednesday, as the retailer is expected to report slower trading due to disappointing full–year figures. Brokers at Hargreaves Lansdown forecast that the company headed by Christopher Bailey will post sales for the first three months of the year up between 6 and 7 percent, well behind the 17 percent posted in the same quarter a year ago.
The next day will be the turn of Sports Direct to make its annual results public. The UK’s largest sportswear retailer has already said that underlying earnings would be in line with forecasts of 380 million pounds.
- Vivian Hendriksz |
London - Struggling fashion retailer J.Crew is finally making its move into the lower spectrum of the fashion market with the launch of its new division: J.Crew Mercantile. After a turbulent year of declining sales, product quality issues and major staff changes and cutbacks, the American fashion retailer is aiming for new cost-efficient brand to help turn the tides against it.
J.Crew to launch budget friendly division J.Crew Mercantile
The new format has been designed to help the fashion retailer tap into a new demographic of value conscious consumers, without damaging its core brand's image. J.Crew Mercantile will operate in addition to J.Crew's Factory Outlets, although the the new division will be operated by the outlet division. A specific label just for the J.Crew Mercantile store is likely to be developed in the future, but for now the struggling retailer aims to offer the same merchandise in its J.Crew Mercantile stores as it does in its factory outlet, which is specifically manufactured for the factory outlets.
The budget-friendly store will offer updated basics and modern classic pieces that will bear J.Crew's signature preppy aesthetic, including women's, men's and children's wear, but price-wise will sit close to high street retailers such as Zara and COS. J.Crew Mercantile will not offer any discount goods items from the regular J.Crew stores, as the retailers clears excess stock for the brands through its own discount offerings and markdown sales.
J.Crew first registered the trademark for J.Crew Mercantile in November, 2013 to apply for products including apparel, footwear and accessories and is set to open its first J.Crew Mercantile store later this month at the Shops at Park Lane in Dallas, Texas according to WWD. Additional stores will be opened throughed the second half of 2015 and 2016, but the exact number of stores to open has yet to be confirmed. The new division launch comes not long after the retailer announced it was cutting 10 percent of its staff in order to keep costs in line with sales trends.
- Danielle Wightman-Stone |
Fashion chain River Island is teaming up with Supa Academy, a youth focused start-up to help teenagers build confidence and develop skills, with the opening of a pop-up at the Boxpark mall in Shoreditch, east London.
The pop-up will run from July 14 to 19 and will stock a range of 56 key items selected from River Island’s women’s holiday shop including accessories, shoes, and apparel. The shop will be manned by 15 Supa Partners, who will be managing the shop and selling the River Island stock under the watchful eye of mentors from the retailer, who will be guiding and advising them.
The Supa Partners will be taken through the whole journey from start to finish from pre-retail, setting up the space, being there to talk and advise customers, as well as being given the chance to have a hands on experience of what is like to run their own pop-up.
Ben Lewis, CEO of River Island, said: “River Island is a business that invests in people, which is why the Supa Academy initiative, with its desire to foster a spirit of entrepreneurialism in young people, makes it the kind of project that we are extremely excited to support.
“It's our hope that through this initiative, we can play a part in helping to shape the future of young enterprise across the country and foster an interest in business and retail.”
The aim of the Supa Academy is to create hands-on business challenges and opportunities, and they will be holding a similar event called the Supa Academy Hack, which will run from July 24-26 at The Old Truman Brewery in London, during which 500 18 to 24-year-olds will run a pop-up supermarket as well as selling and shipping products via an accompanying website.
Images: River Island
- Vivian Hendriksz |
Premium French department store group Galeries Lafayette is set to shutter its branch in Lille, France. The announcement, which was made Friday evening, was said to be the final blow from the group, especially for the stores current 134 employees.
Last March saw the group reveal the closure of loss-making stores in Béziers in the South of France and in Thiais, near Paris, a move which affected less than 300 employees. At the time the department store said that it would attempt to renegotiate rent for its Lille location, or face having to close down the unprofitable store as well. Current employees will be offered new positions within other stores in the area, according to Les Echos.
Galeries Lafayette is also set to cut down the number of positions at its head office through a voluntary redundancy program as it struggles to reduce fixed costs at its headquarters.
- Vivian Hendriksz |
UPDATE The hostage situation has come to an end. At approximately 10:30 am local time, the hostages held within the Primark store were evacuated. Intial reports indicated that ten employees where held hostage but 19 hostages were found - 18 members of staff and one person who came to refill the snack machines. French elite police forces are currently in search of the three gunmen who are currently on the run.
Gunmen are said to be holding a Primark store with ten people inside near Paris hostage. Up to three armed men reportedly stormed a Primark store inside Villeneuve-la-Garenne this morning as staff were arriving for work at 6:30 am local time, according to AFP.
"Around 6:30 am, two or three armed criminals went into the Primark store for what we think was initially an attempt at armed robbery," said a police source to Sky News. Other sources claim that a Primark employee sent a text message to a friend at 7 am saying he was being "held hostage by two armed men."
The elite police unit have currently closed off roads going to the shopping center and surrounded the store. All other stores in the shopping center have been evacuated. It remains unclear if the gunmen are still inside the store or if they have fled the scene of the crime. The employees are said to have been locked in a safe room.
- Vivian Hendriksz |
Primark's parent company Associated British Foods has cut its ties with auditor KPMG after 80 years, as the conglomerate aims to launch the value fashion retail chain in Italy a year earlier than anticipated.
The company is set to hire Ernst and Young to conduct its accounting check following a vote at this year's shareholder meeting, according to the Telegraph. The decision comes ahead of new rules which will force large firms to change provider. "We thank KPMG for their strong contribution as the company’s auditors over many years and for the current year," commented Peter Smith, chairman of ABF audit committee.
The decision comes as Primark aims to open three stores in Italy, with the first opening its doors in Arese, to the northwest of Milan, in early summer 2016. As the second largest apparel market in Europe after Germany, Italy is set to be Primark's tenth European market. "We're following on from tremendous success in France," said ABF finance director John Bason. "We only went into France 18 months ago and that was the most successful new market entry we've had."
- Danielle Wightman-Stone |
The number of retail administrations in England has fallen by 32 percent in the first half of the year, according to research from business advisory firm, Deloitte.
This year the number of collapsed stores fell to 45, compared with 66 seen in the first half of 2014 and less than half of the total of 95 retailers that went into administration in the first six months of 2013.
The British retail sector has been hit over the years by numerous high profile administrations including lingerie brand La Senza and fashion chain Bank, but Deloitte adds that the total number of administrations is continuing to drop, in 2013 there were 183, while last year there were only 119.
Lee Manning, restructuring services partner at Deloitte, said: “After a few turbulent years and something of a clear-out, the retail sector is now benefitting from the calmer waters of a stable economy. In fact, the only well-known retail insolvency this year has been Bank Fashion.
“Meanwhile, these figures align with our expectation of a shift away from using administration as a restructuring tool for businesses. The emphasis is towards constructive debtor-driven solutions involving negotiations with creditors, either informally or through the use of CVAs where in both circumstances companies will work alongside restructuring professionals.”
Ian Geddes, UK head of retail at Deloitte, added: “Retailers’ requirements for their stores will continue to change. For many this will mean fewer stores, while for some it may mean more stores to support the growth of their online sales.
“The overall outlook is positive, and as consumer finances continue to improve this will be felt even more in the retail market.”
- Vivian Hendriksz |
London - Fans of the selfie will be happy to hear that Mastercard is set to begin testing new facial recognition technology that will allow users to verify and complete their online credit card transactions simply by taking a photo of themselves.
The company aims to roll out a pilot programme this fall which will use facial recognition biometrics as well as fingerprint scans to approve of online purchases on 500 users before rolling out the system to all MasterCard customers. "The new generation, which is into selfies ... I think they'll find it cool," commented Ajay Bhalla, the man who has been put in charge of developing new solutions to improve MasterCard's security issues to CNN Money. "They'll embrace it."
The idea behind the facial scan approval is that it's easier than remembering a password. MasterCard currently offers customers the option to use a 'SecureCode' which requires a password for transactions made online. However, passwords can be forgotten, stolen or intercepted, so the banking service has decided to take heed of Apple's fingerprint scanner and Apple Pay, and use facial scans for customers to prove their identity. MasterCard has teamed up with several key smartphone manufacturers, including Samsung, Apple and Blackberry for the potential app.
Those participating pilot will be asked to either touch the pad before making a payment or stare at their smartphones camera, blink once and snap a photo. The logic behind the blinking is simple, as security researchers found that blinking prevents a potential identity thief from just holding up a photo of someone else to trick the system. Bhalla stressed that MasterCard will not be able to reconstruct faces with the data gathered and that the information will be safely and securely transmitted over the internet to MasterCard servers via code, something which has made some cybersecurity specialists worry.
"I understand why they'd want that data, but no, I do not like it," noted Robert M. Lee, co-founder of consulting firm Dragos Security. "From a privacy aspect it's awful -- but from a business perspective, I don't understand why they'd accept that risk." However MasterCard still has other plans up its sleeves if the selfie payment app fails. Bhalla claimed that the company is also working on voice recognition software to approve online payment by speaking to your phone or through someone's unique heartbeat.
- Sujata Sachdeva |
UK’s clothing, shoes and accessories brand Karen Millen is ready to step into India. The company is said to have asked Franchise India Holdings to look for a master franchisee for the Indian market.
The brand aims to open around 10 stores in India over the next three years in the bridge to luxury segment. Karen Millen has stores in over 65 countries across six continents including flagship stores in London's Knightsbridge and New York's Fifth Avenue.
Each piece of the brand’s collection has been individually designed, handcrafted and perfected by the designers in their in-house studio to deliver signature quality and attention to detail. From couture-inspired techniques to luxurious heritage fabrics, every garment is unique. Under the creative direction of their CCO, Gemma Metheringham, the range has become a curated collection of perfectly cut trend-led and investment pieces offering an elevated, tailored approach to fashion.
- Vivian Hendriksz |
The UK government should do more to encourage international spend, otherwise UK retailers may fall even further behind other top European competitors, warns retail tourism expert Global Blue. Business leaders from the UK retail and leisure industry were summoned to Global Blue's annual forum on Thursday to discuss what can be done to safeguard UK tourism against European countries.
According to Global Blue, international spend growth in the UK has slowed following a year of political unrest and economic decline in key spend nations. Total tax free spend in the UK has dropped for the first time in 2014, down 3 percent. Although these external factors reportedly did not have as large an impact on other top European competitors as they did in the UK. Figures show that France for examples witnessed an 8 percent increase in 2014 and Italy remained the same year on year, which suggests that the UK should seek out solutions to the issues affecting tourism.
International spend on the decline in the UK
"The decline in international spend in 2014 while France and Italy remained unaffected should sound alarm bells, and with spend up just 4 percent year on year to date for 2015 action must be taken to facilitate visitors’ journeys and drive the economic potential they bring while here," commented Gordon Clark, Head of Commercial of UK and Ireland at Global Blue. "Tourism VAT, the visa application process, airport capacity and Tax Free shopping solutions have been on the agenda lacking progress for too long and it is vital the Government takes the necessary steps now before the UK loses out further to European competitors."
Global Blue made four key recommendations during its forum to the government to help turnaround the decline in international spend, which included reducing the VAT rate for tourists to 5 percent and continuing efforts to simplify Visa applications and arrangements for Chinese tourists to visit the UK and other Schengen countries following the launch of a pilot new Chinese visa agreement in June. The retail tourist expert also suggests that the UK take immediate action to extend its airport runway as all of London's main airports are forecast to be full by 2030, following Sir Howard Davies' Airport Commission report last week which suggested a third runway be built at Heathrow in addition to digitizing Tax Free Shopping to avoid long queues at airports.
During the forum, which saw over 200 business leaders from the UK retail and leisure industry gather together, the British Retail Consortium emphasised that both the UK retail and tourism industries need to work together to break down the barriers with prevent visitors from fully enjoying what UK retailers have to offer. "Retail and tourism are mutually supporting – the health of one has a real and direct impact on the other," said BRC Director General, Helen Dickinson at the event. "The Global Blue Annual Forum is a timely opportunity for industry experts to analyse and discuss the challenges faced by both industries and make recommendations to government that will be to mutual benefit.
"I'm delighted to be able to offer the retail perspective and to outline why UK retailers need tourism as much as UK tourism needs a vibrant retail industry right across Britain."