The discovery of yet another COVID variant sent global stock markets into a tailspin.
For retailers, who benefitted as consumers shifted spending from services to goods, could this help keep that sales momentum going?
FINANCE
GAP (USA) reported Q3 net sales of $3.9 billion were down 1% from 2019, attributed to store closures and supply chain disruptions.
- Old Navy net sales were up 8% versus 2019, while sales at Athleta were up 48% over 2019.
- Gap net sales declined 10% versus 2019, while sales at Banana Republic fell 18% from 2019.
- The company now expects its reported operating margin for fiscal year 2021 to be about 4.5%, with adjusted operating margin expected to be about 5%, on track to achieving a 10% operating margin by the end of 2023.
Authentic Brands Group (USA) announced that funds advised by CVC Capital Partners (CVC) and HPS Investment Partners (HPS) have signed agreements to purchase significant equity stakes in the company from certain current ABG shareholders. The transaction values the company at $12.7 billion.
- The company has shelved its IPO plans.
- ABG recently purchased Reebok. It also owns or has a stake in Forever 21, Barneys New York, Nine West, Nautica, Brooks Brothers, Lucky, J.C. Penney and others.
Marks & Spencer (UK) has bought a 25% stake in trendy womenswear brand Nobody’s Child as moves to revive its clothing arm gather pace.
- Nobody’s Child is one of more than 30 brands M&S has partnered with to bolster its online offering.
Foot Locker (USA) reported Q3 group sales rose 3.75% year-on-year to $2.189 billion. Net income was $158 million, compared with $265 million a year ago.
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Mothercare (UK) has returned to profitability reporting profits of £3.6 million in the six months to September 25, against a loss of £13.2 million a year ago. Sales slipped to £184.3 million, mainly due to supply chain issues.
Dollar Tree (USA) reported Q3 sales increased 3.9% year-on-year to $6.4 billion.
- Operating profit fell 33% on rising costs.
- The retail broke its price ceiling and raised prices from $1 to $1.25.
Reliance Retail (India) has acquired the amanté lingerie brand from MAS Holdings (Sri Lanka) for an undisclosed amount. Amanté is the latest in a string of acquisitions by Reliance Retail in the last two years.
JD.com Inc (China) warned that slowing consumption amid higher input costs could hurt business in the second half of its fiscal year even as the e-commerce firm reported quarterly results that exceeded market expectations.
- JD’s Q3 sales in its product segment, which includes online retail, surged 22.9%. Net revenue rose to $34.27 billion, exceeding analysts’ estimate of $33.8 billion, according to Refinitiv data.
MARKETS
The UK is expected to sustain its strong rebound from Covid with growth of 5.4% in 2022, according to analysts at BNP Paribas. This growth will outpace China (forecast at 5.3%) for the first time in 30 years.
RETAIL
In the UK fears of gift shortages over Christmas sparked the strongest monthly rise in retail sales in November since May 1990, according to the CBI.
Arket (Sweden), part of the H&M Group, is opening its first flagship in Russia in December. The Moscow store will include both apparel and homewares.
IKEA (Sweden) has opened its first store in the Philippines – and largest global store. Furniture has been one of the categories that has benefitted from the pandemic as people spend more time at home.
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