Retail Update - powered by LebensmittelZeitung
Retail Update - powered by LebensmittelZeitung
Monday, 27 February 2017

Hello, dear reader!
Although J.C. Penney reported a modest shrink in sales, it enjoyed its first annual profit since 2010 and is determined to get its house in order. Not so lucky are book chain Family Christian and electronics retailer HHGregg - both companies are calling it quits. Read these stories and a lot more in today's issue. Have a great start to the week.

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USA & Canada
Downsizing to compete    J.C. Penney will close two distribution centres and 130 to 140 stores even as it reported a profit of US$ 192 million. Although the company ended its fiscal year with a sales decline, it managed to beat its main competitors Macy’s and Kohl’s. J.C. Penney's sales numbers are an achievement of sorts according to analysts. ▪
Going out of business   Growing competition from online stores forces book store chain Family Christian to shutter all 240 outlets across 36 states. Electronics retailer HHGregg has similar problems. After grappling with sinking sales for the past two years, the company is preparing to file for chapter 11 bankruptcy. ▪
Beating expectations   A jolly holiday season helped apparel retailer Gap to post a 3% profit increase to US$ 220 million in Q4. Department store chain Nordstrom also reported better-than-expected profit for this period thanks to a strong performance by its off-price unit Nordstrom Rack. ▪
Europe
Growth strategies across Spain   German discounter Lidl has opened its first store in Las Palmas de Gran Canaria after an investment of EUR 6.2 million. Three more chains announced expansion plans in various Spanish regions, among them international retailer Spar, Spanish supermarket operator Condis and distribution chain Gadisa.  ▪
Solid results   Spanish retailer DIA group has reported an increase of net sales to EUR 8.9 billion for 2016, driven by expansion in Latin America as well as Portugal. The group opened 81 new stores during the year. In Austria, Spar saw gross sales grow by 5.3% to EUR 6.4 billion, (paywall) helped by good performances domestically and abroad. ▪
Fashion contender Morrisons   The British supermarket operator has launched its first women's clothing range, Nutmeg. The collection will be available in 50 selected stores and includes a variety of basic articles as well as dresses, coats, jackets and culottes. ▪
Asia & Australia
JD.com goes offline   Following Alibaba and Amazon, China’s second largest e-commerce platform, JD.com, has opened three bricks-and mortar stores in central Beijing, offering a variety of items, including consumer electronics. In addition, the store showcases foreign brand cosmetics and healthcare products. ▪
Reporting profit   Singaporean supermarket chain Sheng Siong posted a 10.4% increase in net profit to US$ 62.7 million in 2016, while Australian sport and leisure goods retailer Super Retail Group has significantly lifted its half-year profit.  ▪
Beauty offers in China   US lingerie company Victoria's Secret has opened its first store in China, in one of Shanghai’s most upscale shopping streets, while Hong Kong-based beauty retailer Watsons offers a virtual makeover kiosk at its Shanghai flagship store. ▪
What to watch
No Brexit plans   Although the UK is close from leaving the EU, 68% of retailers have yet to start planning for Brexit. This is according to a new survey of 250 British retail decision-makers commissioned by Global-e, which comes to the conclusion that most are taking a wait-and-see approach. ▪
Department store forecast   Analysts at Moody's see department store operators planning more cautiously for 2017 while re-evaluating how to compete in a rapidly changing retail environment. As the industry readjusts its infrastructure with demand, store rationalisation is accelerating, says the rating agency. ▪

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