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13
Feb-18
Tuesday

Fletcher Buildings breaches loan covenant

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The AFR reported that Fletcher Buildings have breached one of its loan covenants is now engaged in discussions with its bankers.  AFR commented that one of the options going forward could be sale of some assets and Tradelink was mentioned.  We think that Tradelink needs and will be sold, sooner or later, but it is hard to see how it could bring Fletcher's any solid money.  For a number of years now Tradelink has been persistently unsuccessful.

JB HiFI will cut prices to defend market share

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According to Richard Murray, the CEO of JB HiFi, the electronics retailer will cut prices in order to defend its market share.  The Australian Financial Review reported that despite solid revenue growth, a slight decline in expected profits resulted in 8% share price drop.  This defies logic, as the short term prospects of JB are solid.  The investors should be more concerned about the long term viability of the JB's business model in the rapidly evolving marketplace.
12
Feb-18
Monday

Global markets struggle to shake off the wobbles

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The Wall Street Journal reported that markets continued to struggle to find a new equilibrium after plummeting shares and soaring volatility drove billions of dollars out of global stock markets. The scale of the selloff prompted traders and analysts to look more closely for underlying cracks in the market. 
9
Feb-18
Friday

Bret Blundy’s BBRC sells Bras N Things to Hanes

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Bret Blundy’s BBRC sold Bras N Things chain to Hanes (who also operate Sheridan and Bonds brands).  The business has grown remarkably over the last 3 years and the value of the deal was $500 million.  An interesting development for Retail Directions as both: BNT and Hanes use our software platform.  Obviously many factors had to come together to underpin BNT’s success and Retail Directions’ powerful platform was definitely one of them.

NRF forecasts US sales growth in 2018

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The NRF released its 2018 economic forecast, projecting that retail sales in the US will grow between 3.8% and 4.4% over 2017. The number includes online and other non-store sales, which are expected to increase between 10% and 12%.  The kind of numbers most Australian retailers can only dream about…

NRF reports slow down in tablet sales

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The National Retail Federation reported that tablet shipments dropped by 7.9% in the fourth quarter of 2017, the 13th consecutive quarter of year-over-year declining shipments for the devices, per data from IDC. Apple continues to hold the top spot for tablet shipments, with Amazon and Samsung taking second and third, respectively, IDC's report notes.  Is the market getting saturated?
7
Feb-18
Wednesday

The bitcoin bubble continues its burst

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The bitcoin bubble continues its burst…  The cryptocurrency’s price slid as low as $5,995.58, falling 70% since a record high of near $20,000 in December.  The Wall Street Journal commented that the drop has been intensified in recent weeks following a global regulatory crackdown on the cryptocurrency market.

Les Wexner says online won't kill stores

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The Wall Street Journal reported that Les Wexner, the CEO of the parent company of Victoria’s Secret and the teen brand Pink, has said that shoppers want to visit stores to experience the environment and feel the products.  We couldn’t agree more – we never subscribed to the 1910 prediction that by 1920 all retail stores would be gone as everyone would switch to mail orders.  We also agree with his assessment that the internet won’t kill stores.  However, we think that his hope that the fascination with smartphones will fade is misguided.  Barring some major cataclysm setting humanity back 30 years, no one will manage to unplug Humans 2.0 from their mobile, networked chips, aka smartphones.

Aldi plans to open another 30 stores

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News.com.au reported that Aldi plans to open another 30 stores in Australia.  Aldi already operate over 500 stores.  The business has been refining its local formula, adding more fresh foods and expanding the store size.  In the past we have repetitively predicted that Aldi would cause major grief for Coles, Woolworths and (particularly) the independents.  More pressure is yet to come…

Asia Pacific arm of Steinhoff is working on refinancing debt

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The AFR reported that the Asia Pacific arm of Steinhoff is working on refinancing about $500 million of debt, in parallel to efforts aimed at a management buyout.  This apparently would cost close to $1.5 billion.  Michael Ford, Steinhoff’s AP CEO commented – quite rightly – that the local business can operate without its parents.  Steinhoff’s local brands (Harris Scarfe, Best & Less, Fantastic Furniture etc.) were successful in their own right, before becoming a part of Steinhoff’s stable.

Stock markets in the US seem to be levelling off

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Stock markets in the US seem to be levelling off, with a slight rebound towards the end of trading on Tuesday.  However, the prices remain volatile.  The Australian Financial Review commented that we are witnessing a peculiar situation where an overflow of good news spooked the market. People started to worry about an overheated US economy, and possibly inflation and interest rates jumps.  In our view, prematurely.  US economic fundamentals have strengthen, but the US long way to go before the recently freed gears start to move faster.