I wonder what Sir Terry Leahy, former chief executive of Tesco, makes of the fanfare about rival UK retailer Marks and Spencer launching a bank with HSBC. According to Marc Bolland, M&S boss, the rationale for putting 50 bank branches inside its stores goes as follows:
This bank will be built on M&S values; putting the customer at the heart of the proposition and delivering the exceptional service that sets us apart from the competition.
There were some interesting foretastes of Monday’s deal between Amazon and the big UK bookstore chain Waterstones in comments made by the latter’s managing director, James Daunt, at the FT a few weeks ago.
Mr Daunt – who had previously called the etailer a “ruthless, moneymaking devil” – spoke at a roundtable in early May to launch the Financial Times and Goldman Sachs Business Book of the Year Award. You can listen to a podcast of his initial interview in which he pointed out that all bookshops had to find ways to make the environment for book-buying attractive again. He added:
The largest of us face the additional challenge of how do we become a relevant part of this new digital world, in which, clearly, a substantial part of the reading that our customers engage in is going to take place.
With scent and skincare giant Coty’s $10bn bid approach for Avon Products, the descendants of Johannes Benckiser have put Bart Becht straight back to work.
Lady Gaga’s first perfume 'Monster', made in conjunction with Coty, is due to be released this year. Image by AFP/Getty
Mr Becht stepped down last summer as a highly acclaimed (and paid) chief executive of Reckitt Benckiser, the listed household goods and personal care group in which private family company Joh A Benckiser has a 15 per cent stake. By November, with the applause of Reckitt’s investors still ringing in his ears, he had stepped in to chair another Benckiser holding – unlisted Coty, the biggest fragrance company in the world, with perfume brands from Calvin Klein to Lady Gaga’s forthcoming ‘Monster’.
For all the soft-focus marketing of Coty’s products, Mr Becht’s “Dear Andrea” letter to his Avon counterpart Andrea Jung is as direct as the sales pitch for his former employer’s popular Cillit Bang grime-cleaner. The Dutchman writes:
We were surprised and disappointed that Avon’s Board of Directors has no interest in a discussion to explore our acquisition proposal…. We do not understand how your Board’s unwillingness to discuss our proposal can serve the best interests of Avon’s shareholders.
KFC tempura chicken strips get progressively spicier, the deeper you penetrate inland China. Iglo’s frozen fish fingers used to have four different colours of breadcrumb, depending where you bought them in Europe.
Luxury goods companies increasingly seem to inhabit a parallel universe.
Many ordinary shopkeepers – at least in the recession-blighted west – are grappling with slumping sales, falling share prices and the threat of bankruptcy.
In the US, in an effort to offset worse than expected post-Thanksgiving trading, many stores caused confusion, according to the New York Times, by bringing forward “Super Saturday” – a day of pre-Christmas discounting – to December 17. In the UK, the bleak outlook for the likes of HMV, Peacocks and Blacks Leisure, is a symptom of what one analyst forecasts will be the worst Christmas for a decade.
Contrast that gloom with the great expectations of the luxury brands. On Wednesday, Mulberry announced it would appoint Bruno Guillon, a director of Hermès, the high-end French company, as its next CEO. He’ll lead the UK bagmaker’s push into Asia. The group’s shares added another 3 per cent, having risen 60 per cent in the past year. Read more
Whoever thought up Amazon’s latest idea for squeezing other retailers – offering money off to people who scanned prices in US stores with its smartphone app and then bought the goods on Amazon – deserves an award for bad timing.
J.C. Penney, the department store chain, has pulled a fast one by nabbing Ron Johnson, head of Apple’s retail stores as its next chief executive.
The runaway success of Apple’s stores, despite early predictions that they would go the way of other capital-intensive efforts by product manufacturers to reach consumers, have prompted many imitations but none have worked as well. Read more
I’m intrigued by McDonald’s move in Europe to replace some cashiers by introducing touchscreens on which customers can order their own food because it is a practice that could be introduced more widely in retail outlets and restaurants.
My reaction stems from having noticed that I prefer to use self-scanning machines at a local supermarket rather than go to the aisle where items are scanned by a cashier. I find it generally quicker and easier to scan them for myself. Read more
My first reaction to Best Buy’s closure of its nine branded stores in China was: not again. Another retailer had leapt into the Chinese market – and fallen on its face.
I asked Sir Terry Leahy to bring to his video interview with me this week – his last as Tesco’s chief executive – an object or picture that represented a “personal turning point” for him. My heart dropped when word came back from the supermarket chain’s HQ that he’d be bringing a Clubcard.
Sure, this sliver of plastic tells the retail group more about shoppers’ preferences and habits than any opinion poll ever could. But we know what the discount-voucher card tells Leahy about us; would it tell us anything about Leahy? Read more
When creative stars explode, they do so with a more spectacular bang than the average sufferer from a midlife crisis.
Christian Dior this week fired John Galliano, its 50-year-old chief designer, for allegedly making anti-Semitic remarks to a couple in a bar. He denied the claims but it seems that he told others in the same bar: “I love Hitler” and that their forefathers would have been “gassed” – a video of Mr Galliano slurring those words was published by The Sun.
I am struggling to believe in Groupon, which Google is reported to be considering buying for $5.3bn, making it the company’s largest acquisition. Despite Groupon having some social media trappings, and being profitable, it feels oddly old-fashioned.
Groupon amasses groups of users to take part in mass one-off discounting programmes by retailers – hence the name. In the US, where coupon-clipping is still popular, despite the power of Wal-Mart’s “every day low prices”, it grown very rapidly. Read more
Mickey Drexler, the ebullient chairman and chief executive of J. Crew, has done well out of private equity and will probably do so again. Mr Drexler, who would be integral to the $3bn buyout offer for J. Crew, was first recruited to the clothing company by Texas Pacific in 2003.
As New York Magazine recorded five years ago: Read more
Over-expansion is something that bedevils many public companies, particularly retailers. Under stock market pressure to keep growing rapidly, they lose the quality that originally set them apart.
That has been a problem for many companies, including McDonald’s and Starbucks. It also led to the firing of Mickey Drexler, the former chief executive of Gap, in 2002. Mr Drexler has now made an impressive return to form at J.Crew. Read more