110317 global retail_freeview

GLOBAL RETAIL
FREEVIEW
A free synopsis of global retail
news and opinion
March 17, 2011

GLOBAL RETAIL FREEVIEW
March 17, 2011

A free synopsis of global retail news and opinion

Welcome to the latest edition of Verdict’s Global Retail FreeView, in which our analysts bring you a roundup
of all the major events, news, and views in the international retail sector. Verdict Research is a retail information
specialist within the Datamonitor Group.
With over 25 years' experience, Verdict
In this issue, we take an in-depth look at LVMH’s acquisition of a majority stake in Bulgari. We are also
publishes unrivalled independent
pleased to introduce our Global Hypermarket Revitalization Strategies report and our Forever 21:
analysis. Our reports, briefings,
Youth Fast Fashion case study.
consumer research and consulting
services provide clients with a complete
picture of the UK and increasingly the
international retail arena, helping
retailers, manufacturers, service
LATEST GLOBAL RETAIL NEWS RETAIL VIEW FROM EUROPE LATEST VIEWS AND OPINIONS suppliers, analysts, and consultants to
fully exploit opportunities within the
ELECTRICALS & HOME sector.

Clas Ohlson to open new store in UK
LATEST REPORTS & ANALYSIS
Swedish homewares retailer Clas Ohlson is to open a new store in the UK, in Newcastle in August 2011. The company first
entered the UK with a store in Croydon in November 2008 and currently has eleven outlets. The new store, located in
Newcastle’s city center, has 1,889 sq m of space and will showcase 10,000 products. By the end of fiscal 2010–11, Clas
Latest reports
Ohlson plans to open 19 stores, including another four in the UK.
We produce a range of reports
analyzing the key players in various
Bunnings retaliates against Woolworths’ new hardware stores
retail sectors throughout Europe and
Australian hardware chain Bunnings is attempting to battle Woolworths’ entry into the hardware sector by posting a
the rest of the world.
planning application to build a new store close to a Woolworths site. One of Woolworths’ first DIY stores is to open in
Tingalpa in Brisbane, and Bunnings has applied to open a 12,206 sq m store in Wynnum West, approximately one minute
from its rival’s store. Woolworths has entered into a joint venture with US home improvements chain Lowe’s to build 150 Forever 21: Youth Fast Fashion
hardware stores in Australia within five years, which will enable Woolworths to draw on Lowe’s expertise in the sector.
Global Hypermarket Revitalization
With the new stores expected to be rolled out across Australia, competition between the two players is expected to
Strategies
intensify.
Service Station and Convenience
Carpetright to close Irish stores Retailing Joint Ventures in Europe
Floorings retailer Carpetright has announced plans to close seven of its stores in the Republic of Ireland due to poor
Global Strategies in Online Fashion
trading. The company was hoping for a revival in the Irish market, but its continued sales decline meant that the retailer
Retailing
could not hold off on taking action any longer. Carpetright has seen sales decrease by more than 50% since 2008. At
present, the retailer is reviewing its Irish operations to ascertain which stores it will close, with 19 job losses expected.

http://about.datamonitor.com/sectors/retail.htm| t. +44 (0)20 7551 9000 | f. +44 (0) 87 0136 1073 | e. enquiries@verdict.co.uk

LATEST GLOBAL RETAIL NEWS RETAIL VIEW FROM EUROPE LATEST VIEWS AND OPINIONS LATEST REPORTS & ANALYSIS

CLOTHING, FASHION & PERSONAL CARE FOOD & GROCERY

Topshop and Topman to enter Canadian market Morrisons buys minority stake in US online grocer
UK retailer Arcadia has entered into an agreement with Canadian retailer UK grocery retailer Morrisons has entered the online food retailing market with
Hudson’s Bay Co., giving it exclusive rights to open Topshop and Topman stores the purchase of a 10% stake in FreshDirect, a US e-retailer. FreshDirect operates
in Canada, as well as shop-in-shops in its The Bay department stores. across New York, Connecticut, and New Jersey, with over 600,000 customers in
A Topshop store will open in Toronto in autumn 2011. Arcadia tested the market total. Dalton Philips, Morrisons’ chief executive, has stated that it plans to launch
last year, by selling Topshop clothing at Jonathan and Olivia, a Toronto its own UK e-commerce operations by 2013. Morrisons’ stake will help it to gain
boutique, for a limited period. The move will help to revive Hudson’s Bay Co.’s insight into FreshDirect’s e-commerce model, which will prove invaluable ahead of
department store sales by attracting younger consumers, and will help it to the launch of its own transactional website.
better compete against the likes of H&M and Zara, which both operate in
Canada, as well as domestic players such as Reitmans and Joe Fresh. The deal Discounter Lidl to enter Romanian market
could lead to as many as 50 Topshop or Topman stores opening in Canada by Lidl, the German grocer, has announced plans to open in Romania before the end
2015. of 2011. The discounter has acquired 25 plots of land, and started construction in
July 2010. Store managers have also been sent for training in Germany and
Gap to undergo major strategic changes in the coming years Croatia. Lidl, which is owned by German group Schwarz, bought the Plus
CEO and chairman of Gap, Glenn Murphy, has announced new plans in a bid to supermarket chains in Romania and Bulgaria in February 2010, and now operates
reverse the company’s increasingly poor sales performance. Gap will close 200 107 Plus stores.
of its 900 stores by 2013, and will revitalize its offering by repositioning the
brand to be more trend-led, and by introducing new categories such as jewelry. Metro Group seeks expansion in Turkey
The retailer is shifting focus from its US stores, and plans to expand overseas German retailer Metro Group is to push forward with plans to increase its retail
and increase online sales, growing their combined share of revenues from 22% store network in Turkey. The group currently operates 18 wholesale cash and
to 30% by 2013. carry stores, 13 Real-branded supermarkets and 17 consumer electronics Media
Markt and Saturn stores in the country. Dr Eckhard Cordes, CEO of Metro Group,
AS Watson Group invests in Ukrainian operations has stated that store numbers in Turkey would double in two years.
AS Watson, owned by Hutchinson Whampoa, plans to invest $37m in its retail
business in the Ukraine over the next five years. The health and beauty retailer, Migros to drive sales through price cuts
the largest in the market by store numbers, is set to open 60 Watsons stores in Swiss retailer Migros has announced it is to permanently reduce prices by up to
the market by the end of 2011, as well as rebranding its current 212 DC stores 20% on 200 products. The announcement comes after the company invested
to Watsons. Its goal is to reach a total of 500 stores within five years. CHF15m (€11.6m) in December 2010 to lower the prices of 3,000 private label
products. Migros believes the strategy will help it to increase sales by attracting
more loyal customers.


LATEST GLOBAL RETAIL NEWS LATEST VIEWS AND OPINIONS LATEST REPORTS & ANALYSIS
RETAIL VIEW FROM EUROPE

Spanish online member-only fashion player
Privalia has bought German online apparel
retailer Dress for Less from Palamon Capital
Partners in a deal allegedly worth €150m–
200m. As part of the transaction, Dress for
Less’s founders will gain shares in Privalia.
Privalia hopes that the buyout will enable it to
UK clothing retailer White Stuff plans to
reach €400m in revenues this year,
make its first foray into the international
amounting to a three-digit percentage
market. The company, which initially
growth.
specialized in ski and outdoor wear, plans to
open overseas stores in the next five years,
and sees great potential in the Scandinavian
market. Moreover, it plans to launch
international online stores, and will choose
which countries to target based on overseas Wholesale retailer Makro Cash & Carry,
sales made from its UK site. which is part of Germany’s Metro group, has
opened its Drive-In click and collect format in
the Czech Republic, enabling shoppers to buy
goods online or over the phone and collect
them from the Drive-In collection points.

French grocery player Carrefour plans to spin
off 100% of its Dia discounter chain. The Belgian grocer Delhaize has acquired Serbian
move means that the Dia business will be supermarket chain Delta Maxi for the sum of
listed as a separate business to its parent €932.5m. Delta Maxi operates around 450
company, allowing Carrefour to focus on its stores in Serbia, Montenegro, Bulgaria, Bosnia
transformation plan, which includes and Herzegovina, and Albania. The deal will
revitalizing its ailing hypermarket format. allow Delhaize to reach revenues of €3.4bn in
southeastern Europe alone, and will help the
retailer to strengthen its position in Europe
while reducing its dependence on its US
operations.


LATEST GLOBAL RETAIL NEWS RETAIL VIEW FROM EUROPE LATEST REPORTS & ANALYSIS
LATEST VIEWS AND OPINIONS

LVMH: ACQUISITION OF MAJORITY STAKE IN BULGARI MAY LEAD TO FURTHER MOVES IN THE
LUXURY SEGMENT
LVMH has agreed the acquisition of a controlling stake in Italian luxury retailer Bulgari in a
share deal which values the company at E3.7bn. The move will help Bulgari to achieve
growth, while also doubling the size of LVMH's watches and jewelry division. In the highly
competitive luxury market, LVMH's rivals such as PPR are expected to retaliate with their
own acquisitions.
The world's largest luxury goods retailer, Moet Bulgari's jewelry and watches division accounted for
Hennessy Louis Vuitton (LVMH), has entered into a 65.7% of its revenue in FY2010, showing how it can
share deal with Italian retailer Bulgari to purchase a boost the division for LVMH. Furthermore, Bulgari's
majority share of the company less than a year chief executive officer Francesco Trapani will head
after Bulgari stated it was not for sale. LVMH will up the watches and jewelry division, ensuring LVMH
issue 16.5 million shares, worth E1.87bn, to the can exploit his expertise.
Bulgari family to buy their 152.5 million shares,
which equate to a 50.43% majority share of There are obvious benefits for Bulgari too; not only
Bulgari. LVMH will then seek to acquire the will it be able to utilize LVMH's resources to expand
outstanding shares at a price of E12.25 per share. further in crucial growth markets such as Asia
The agreement means that the Bulgari family will Pacific, but it can also leverage the French retailer's
become the second largest shareholder in LVMH, experience in key product divisions such as
behind founder Bernard Arnault. accessories and perfumes, helping it to become less
dependent on watches and jewelry. Bulgari reported
The acquisition is a significant victory for LVMH, an operating loss of E20.0m in 2009, partially due
especially as rivals PPR and Richemont have to the impact of the economic downturn, but has
previously shown interest in acquiring stakes in since bounced back in 2010 and this acquisition will
Bulgari. Strategically it allows LVMH to better help the company to ensure that it can build on this
compete with Richemont and Swatch in the luxury recent success.
watch and jewelry market, which is expected to see
growth in the coming years. At present, the French The acquisition of Bulgari follows LVMH's growth of
retailer's watches and jewelry business is its its stake in luxury fashion house Hermes to 20.2%,
smallest division, with sales of E985m in 2010 and confirms LVMH's position as the leader of the
accounting for just 4.8% of total revenue. luxury market, ahead of PPR. The recent move will
no doubt give some momentum to PPR's acquisition
efforts, leading to further consolidation in the ever-
growing luxury segment.


LATEST GLOBAL RETAIL NEWS RETAIL VIEW FROM EUROPE LATEST VIEWS AND OPINIONS

GLOBAL LUXURY RETAILING: MARKET SIZE, RETAILER STRATEGIES, AND Features and benefits
COMPETITOR PERFORMANCE
Make informed regional investment
This report gives a comprehensive assessment of the global luxury retail sector outlining decisions with forecasted luxury
regional expenditure and five-year forecasts. It provides an in-depth analysis of the key expenditure to 2015 based on a range
of inputs including the number of
strategic issues facing the sector, as well as offering market shares and profiles of the
wealthy individuals.
leading luxury retailers.
Benchmark your company's
performance by accessing profiles of
nine leading luxury retailers including
their key operating details and global
International market shares.
expansion
Ensure marketing and distribution
Link with art Adoption of strategies are up-to-date by uncovering
and culture e-commerce
competitor activity in areas such as e-
commerce and social networking.

Focus on Key Strategies Embracing
heritage
2011 technology

Launch of new
Celebrity
product
endorsement
categories
Localized
products



GLOBAL HYPERMARKET REVITALIZATION STRATEGIES Features and benefits

This report is an in-depth evaluation of the challenges facing hypermarket operators Uncover range assortments and
across the world, the strategies being adopted by the leading players, and the key action complementary instore services that can
points for retailers wishing to revitalize sales in their large format stores. be used to attract shoppers and revive
sales in large format stores.

- +
Identify a variety of new ways to
CHANGE IN SALES
reinvigorate the layout of your
AREA hypermarket or supermarket by
uncovering how other retailers have
managed to do it.

Adapt the hypermarket size according
to trends surrounding urbanization and
household sizes by accessing
demographic data covering global
markets.

Develop innovative multi-channel
strategies and consider alternative store
formats by identifying the strategies of
your competitors.



RETAIL INNOVATION CASE PROFILES Recent retail profiles

Verdict launched its Retail Innovations case studies in 2010. Each profile provides an Forever 21: Youth Fast Fashion
evaluation of a company that stands out due to a set of unique characteristics, or a
Carrefour: Hypermarket Reinvention
particular strategic initiative. Verdict outlines the background of the company, discusses
the strategy, provides details of operational implementation, and outlines action points Costco: The Pinnacle of Value

for retailers keen to replicate some of the initiatives. H&M: Designer Collaborations

Recent consumer packaged
goods profiles

Crabbie's Alcoholic Ginger Beer Case
Study: Finding an untapped niche in the
post-recessionary beer market

Craft Beers in the US and UK Case
Study: How mainstream brewers can
benefit from the trend towards craft
beers

Gatorade Case Study: Using consumer
segmentation and social media to drive
market growth

Carrefour's approach to Insight into Costco and
revitalizing its lessons for those
hypermarket format and considering elements of
key action points for the warehouse club
retailers looking to model
improve their large format
(To request a complimentary
store sales copy please contact Alena
Barford at
alenab@verdict.co.uk)



Verdict produces a range of reports analyzing the key issues affecting
retail sectors throughout Europe and the rest of the world

Sectors, channels, and locations Retail market entry Strategic retail insight

Global Luxury Retailing Retailing in Russia: Long-term potential prevails Global Hypermarket Revitalization Strategies

Global Airport Retailing Retailing in Eastern Europe: Westwards expansion Service Station and Convenience Retailing Joint
Global Jewelry Retailing Retailing in Romania: Developing retail market Ventures in Europe

DIY and Home Improvement Retail in Europe Retailing in Czech Republic: First phase complete Global Strategies in Online Fashion Retailing

Health and Beauty Retail in Europe Retailing in Poland: Non-food opportunities Private Label Strategies in Global Electricals and DIY

Global Department Store Retailing Retailing in Slovakia: Continues to shine Retailing

Childrenswear in European Retail Retailing in the Baltic States: Prospects dampened The Future of European Convenience Retailing

Value Clothing in European Retail Retailing in Bulgaria: Opportunities for growth Internationalization Strategies of CEE retailers

The Future of European Discounters Retailing in Hungary: Retail expenditure squeezed The Impact of the Credit Crunch on European Retail

European Shopping Centers Retailing in Spain: Improving situation Private Label in European Retail

European Grocery Retailing Retailing in Italy: Tough market with opportunities
Retail innovation case profiles
European Electricals Retailing Retailing in France: Growing liberalization

European Clothing Retailing Retailing in Germany: Consolidation begins Forever 21: Youth Fast Fashion
European Furniture Retailing Retailing in Ireland: New space, new opportunities Carrefour: Hypermarket Reinvention
Costco: The Pinnacle of Value
H&M: Designer Collaborations

For more information on our reports and future projects please contact us at enquiries@verdict.co.uk


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