Flash ReportDIA 2017 Capital Markets Day: Company Sees Growth Opportunities in LatAm Expansion and Spanish E-Commerce Coresight Research June 23, 2017 Executive Summary At DIA’s third Capital Markets Day, management emphasized the company’s strategy of customer centricity, which has put customer data and views at the heart of decision making since 2012. DIA’s growth has been fueled by strong performance in Latin America. The company plans to grow store numbers significantly in Brazil and Argentina by 2020. The company is reducing costs by renegotiating store leases, driving productivity in logistics, and entering into commercial alliances with other major retailers. In Spain, DIA expects to grow its online sales by six times, to more than €120 million, by 2020. E-commerce could be a significant competitive advantage for DIA in a Spanish market that is still in a nascent phase of online grocery development. Please Login to read the full report. Not a member? To access this content for free, register for a free account. This document was generated for
Analyst CornerWeekly Insights Jun 23, 2017 Coresight Research June 23, 2017 Executive Summary This week’s note “From the Desk of Deborah Weinswig” discusses Amazon’s options and opportunities for Whole Foods Market once the acquisition of the grocery chain closes in the second half of this year. UPS plans to charge retailers extra fees to deliver packages during the busiest weeks before Christmas, creating a new challenge for an industry already coping with a shift away from traditional stores. eBay said it would match top competitors’ prices for a number of popular products in an effort to lure customers. The news follows a string of initiatives by the marketplace to catch up to e-commerce rivals and, ultimately, set itself apart as a haven for finding treasures online rather than commodity products. German retailer Zalando has rolled out a new supply chain service called Zalando Fulfillment Solutions for retailers that sell through its website. The new service will allow retailers to store products in Zalando’s warehouses and deliver products from them. Please Login to read the full report. Not a member? To access this content for free, register for a free account. This document was generated for
Insight ReportTakeaways from the Abercrombie & Fitch Investor Presentation at the Jefferies 2017 Global Consumer Conference Coresight Research June 22, 2017 Executive SummaryAt the Jefferies 2017 Global Consumer Conference, which was held this week in Nantucket, Massachusetts, Abercrombie & Fitch CEO Fran Horowitz provided a recap of the company’s first-quarter performance, along with CFO Joanne Crevoiserat and VP of Investor Relations Brian Logan. The team also provided an outlook on the remainder of 2017 and an update on the company’s strategic initiatives. Key takeaways include: Abercrombie & Fitch expects comp sales to remain challenging,and to see trend improvements in the second half of the year. The company expects the gross profit rate for the year to be slightly below last year’s adjusted rate of 61%. In terms of operating expenses, the company expects to deliver $100 million in expense reductions. The company plans to invest nearly $100 million in 2017, including $70 million for new stores and renovations of current stores. The company plans to close 60 stores in the US by the end of this year, and to remodel 47 stores and open seven full-price stores and two outlets. Management said the company plans to spend $20 million to enhance its digital foundation, including investments in the rollout of its international omnichannel capabilities. The company’s strategic initiatives include strengthening its omnichannel presence, engaging with customers through loyalty programs and social media, renovating stores through an updated proto type model, and partnering with wholesalers and franchisers to reach more consumers. Already a subscriber? Log in You are currently viewing a preview of this report. Please select an access option to view the full report. Hide Options - Show Options + Get unlimited access to all our research with one of our subscription plans. View Subscription Plans or Contact us to purchase this report. Contact us ✕ This document was generated for
Company Earnings UpdateZalando (XTRA: ZAL) 2017 Capital Markets Day and Warehouse Tour: Moving Beyond Retailing Coresight Research June 22, 2017 Executive Summary At Zalando’s 2017 Capital Markets Day event, held in Berlin, Germany, management emphasized that the company is moving beyond its traditional model of retailing owned inventory. The company’s Partner Program allows brands and retailers to list and dispatch their own inventory. Management noted further levers for growth, particularly in business-to-business (B2B) services. The company is “modularizing” its assets and offering them as services to brands. These include Zalando Media Solutions, Zalando Fulfillment Solutions and the company’s Consumer and Shopper Insights Tool. Zalando wants fashion “to flow like water,” but the current supply chain is full of friction points, from sourcing to delivery. Please Login to read the full report. Not a member? To access this content for free, register for a free account. This document was generated for
Deep DiveDeep Dive: Retail X Factor — Stores Coresight Research June 22, 2017 Executive Summary This is the second report in our X Factor series, in which we identify themes that we believe will be critical for the US retail landscape in the second half of 2017 and beyond. We focus on the store in this report, as we believe the store will be one of the key factors that will make or break a retailer. The retail environment so far in 2017 has been rather bleak for traditional retailers, overshadowed by the large number of store closures and bankruptcies―far exceeding that of previous years. Since the start of the year, 28 major retailers have announced plans to close down stores―over 5,300 to date―while 10 major retailers have declared bankruptcy. The reasons retailers are struggling include pressure from the growth of e-commerce, consumers’ shift to online shopping and dwindling mall traffic, to name a few. But it is not all gloom. Amidst this rather bleak retail sector, there are some bright spots―fast fashion, discounters and e-tailers seem to be faring well. Opportunities abound for retailers making an effort to combat the disruptive e-commerce―in the form of improved operating leverage from the consolidation of physical stores and sales redirected from closed stores or bankruptcies. Already a subscriber? Log in You are currently viewing a preview of this report. Please select an access option to view the full report. Hide Options - Show Options + Get unlimited access to all our research with one of our subscription plans. View Subscription Plans or Contact us to purchase this report. Contact us ✕ This document was generated for
Event CoverageAlibaba Gateway ’17 Day 2 Takeaways Coresight Research June 22, 2017 Executive Summary The Fung Global Retail & Technology team is attending the Alibaba Gateway ’17 event in Detroit, Michigan. This inaugural conference, which attracted over 3,000 attendees, is the largest event Alibaba has hosted outside of China. Alibaba Gateway aims to help small- to medium-sized businesses in the US to better understand the China opportunity and enable them to sell into China via Alibaba’s various platforms. There is significant demand for American goods in China, driven by the increasing spending power of consumers in the lower-tier cities of the country. Chinese consumers generally prefer American brands, as they believe they represent premium quality and better design. In some categories such as fresh produce and outdoor apparel, rising middle-class Chinese consumers aspire to experience the American lifestyle by purchasing US goods. For US businesses interested in tapping into the Chinese market, Alibaba provides well-rounded solutions, which include e-commerce platforms (Taobao.com and Tmall/Tmall Global), payment solutions (AliPay), a logistics network (Cainiao) and sourcing (Alibaba.com). Please Login to read the full report. Not a member? To access this content for free, register for a free account. This document was generated for
Insight ReportTakeaways from the 2017 Michael Kors Investor Day Coresight Research June 21, 2017 Executive SummaryAt the 2017 Michael Kors Investor Day event, management outlined Runway 2020, the company’s strategic plan for driving future growth through product innovation, fleet modernization and expansion of its global digital innovation efforts. Highlights from the day’s presentations include: Michael Kors is modernizing and rightsizing its fleet and renovating 100 stores globally. Over the next 24 months, the company will close 100–125 stores, which will allow it to increase profitability and see annualized savings of $60 million. Michael Kors is diversifying and expanding its product mix beyond its largest category, handbags, into men’s, footwear and women’s ready to wear. The company has committed to delivering 40% less product with 65%–70% more newness. The company is also reducing promotional days by 40%. The company believes that China represents a $1 billion opportunity. It plans to expand its footprint in Asia from 228 stores currently to 335 stores in 2020, with more than half of the new stores located in China. The company projects that it will return to growth by 2020. Fiscal year 2018 is expected to be a reset year to shrink revenue to a healthy base. The company expects low-single-digit revenue growth and low- to mid-single-digit EPS growth in fiscal year 2019. For fiscal year 2020, Michael Kors projects that all areas will begin to work together, and that the company will see positive revenue growth, positive comp sales, improving margins and mid- to high-single-digit EPS growth. Already a subscriber? Log in You are currently viewing a preview of this report. Please select an access option to view the full report. Hide Options - Show Options + Get unlimited access to all our research with one of our subscription plans. View Subscription Plans or Contact us to purchase this report. Contact us ✕ This document was generated for
Insight ReportAmazon Ramps Up Its Effort in Apparel Coresight Research June 21, 2017 Executive Summary Amazon announced on June 20 that it is launching a new service called Prime Wardrobe, which lets customers try on clothes before they buy them and return them for free if they decide they do not want them. Prime Wardrobe, which is still in beta, will be available to Amazon Prime members at no extra charge and will offer customers one week to decide whether they would like to keep what they ordered. Through the service, Amazon Prime customers select at least three (and a maximum of 15) Prime Wardrobe–eligible clothing items or accessories, such as shoes or watches, from a range of more than 1 million men’s, women’s and kids’ items available on Amazon Fashion. The service may attract Prime shoppers who have been reluctant to take a chance on Amazon’s apparel offering and give Amazon access to more data on consumer buying patterns at the same time. The move is Amazon’s latest attempt to boost its apparel business. The company launched the Echo Look “style assistant” in May and began partnering with celebrities such as NBA star Dwyane Wade to build out a one-stop shop on its website. Euromonitor International estimates that Amazon’s clothing and footwear sales reached $13 billion in 2016, accounting for 13% of Amazon’s US gross merchandise volume. Already a subscriber? Log in You are currently viewing a preview of this report. Please select an access option to view the full report. Hide Options - Show Options + Get unlimited access to all our research with one of our subscription plans. View Subscription Plans or Contact us to purchase this report. Contact us ✕ This document was generated for
Event CoverageAlibaba Gateway ’17 Day 1 Takeaways Coresight Research June 21, 2017 Executive Summary The Fung Global Retail & Technology team is at the Alibaba Gateway ’17 event in Detroit, Michigan. This inaugural conference, which attracted over 3,000 attendees, is the largest event Alibaba has hosted outside of China. Alibaba Gateway aims to help small- to medium-sized businesses in the US to better understand the China opportunity and enable them to sell into China via Alibaba’s various platforms. Jack Ma, the Founder and Chairman of Alibaba, believes that the biggest global economic driver for the next several decades is going to be the Chinese consumer market. Every American business should think about selling into China. Various Alibaba executives reiterated the company’s US strategy, which is to become the go-to platform for US businesses of all sizes to sell into China. It is part of Ma’s commitment to creating 1 million jobs in the US. Taobao.com and Tmall.com are two Alibaba-operated platforms that can enable US brands and retailers to sell into China. For small- to medium-sized business with little China experience, Taobao is the platform to supply to Alibaba’s wholesale partners who will distribute their products to China. For large brands, the branded marketplace Tmall offers an opportunity for brands and retailers to operate their own flagship stores on the site and leverage the large volume of traffic. Please Login to read the full report. Not a member? To access this content for free, register for a free account. This document was generated for
Flash ReportApple Grants Third-Party App Developers Access to iPhone’s NFC Chip Coresight Research June 21, 2017 Executive Summary With the latest iOS 11 development tool kit update released earlier this month, Apple granted access to the near-field communications (NFC) chip used in the iPhone to third-party app developers for the first time. Until now, Apple Pay was the only application allowed to use the NFC chip. We view Apple’s move to open more opportunities for NFC applications as sensible, given that the majority of Android or Windows smartphones in use today support NFC connections. The impact on retail, however, will likely be limited, as currently only iPhone 7 and 7 Plus support the NFC Data Exchange Format (NDEF) according to Apple’s framework. It is unclear whether Apple will eventually push full NFC functionality to older iPhone models. However, for now, given the relatively small size of the user base for iPhone 7 and 7 Plus compared to that for Android, we do not envision any immediate impact on NFC adoption in the consumer space. Please Login to read the full report. Not a member? To access this content for free, register for a free account. This document was generated for
Event PresentationThe Global Retail Revolution Coresight Research June 20, 2017 Executive SummaryUS Retail Bankruptcies Are at Post-recession Peak Year to date, 12 retailers have filed for bankruptcy That is more than the number of filings over the entire year in 2016 Retail bankruptcies are on track to reach their highest level since 2009, when 18 retailers filed for bankruptcy And there are likely more to come Already a subscriber? Log in You are currently viewing a preview of this report. Please select an access option to view the full report. Hide Options - Show Options + Get unlimited access to all our research with one of our subscription plans. View Subscription Plans or Contact us to purchase this report. Contact us ✕ This document was generated for
Event PresentationGlobal Retail Revolution Brings Threats as well as Opportunities Coresight Research June 20, 2017 Executive SummaryAGENDA US Retail Revolution: Latest Trends and Developments Potential Threats to Retailers Opportunities for Retailers Top Startups in Retail and Technology Trends Shaping E-commerce in Asia Already a subscriber? Log in You are currently viewing a preview of this report. Please select an access option to view the full report. Hide Options - Show Options + Get unlimited access to all our research with one of our subscription plans. View Subscription Plans or Contact us to purchase this report. Contact us ✕ This document was generated for
Event CoverageTakeaways from Lululemon Athletica’s Presentation at the 2017 William Blair & Company Growth Stock Conference Coresight Research June 20, 2017 Executive SummaryAt the 2017 William Blair & Company Growth Stock Conference in Chicago, Stuart Haselden, COO and CFO of Lululemon Athletica, outlined the company’s plan to reach revenues of $4 billion by 2020, doubling both revenues and earnings. The key growth drivers for reaching this goal include: Growing the men’s business from 18% of revenue in 2017 to 25% of revenue in 2020. Expanding selected super-productive stores, including 15 such stores in 2017, by adding 50% incremental square footage, with an emphasis on adding more men’s departments. Using technology to innovate in product categories, particularly in the men’s business. Overhauling the company’s digital strategy with a goal of reaching 25% e-commerce penetration by 2020. Opening15 new stores in Asia. Please Login to read the full report. Not a member? To access this content for free, register for a free account. This document was generated for
Flash ReportAmazon to Acquire Whole Foods Market for $13.7 Billion in Cash Coresight Research June 20, 2017 Executive Summary Amazon announced the signing of a definitive agreement to acquire Whole Foods Market, including the company’s net debt, for $13.7 billion in cash. The transaction is expected to close in the second half of 2017. Whole Foods, founded in 1978, is the leading natural and organic foods supermarket, with sales of approximately $15.7 billion in fiscal year 2016. The company has more than 460 stores in the US, Canada and the UK. The two companies’ statement included few details. Whole Foods CEO John Mackey said that the deal represents an opportunity for Whole Foods to maximize value for shareholders while “extending [its] mission and bringing the highest quality, experience, convenience and innovation to [its] customers.” Whole Foods will continue to operate under its own brand and Mackey will remain with the company. Amazon’s grocery sales were estimated at $350 million in the first quarter of 2017, representing an annual run rate of $1.4 billion. As the acquisition has not yet closed, we can only speculate regarding Amazon’s plans for combining the Whole Foods stores with its own AmazonFresh service, using the stores as distribution hubs to expand its Prime Now service and integrating the technology currently being tested in its Seattle Amazon Go store. Please Login to read the full report. Not a member? To access this content for free, register for a free account. This document was generated for
Company Earnings UpdateTESCO (LSE: TSCO) 1Q18 Update: Sixth Consecutive Quarter of UK Comp Growth Coresight Research June 19, 2017 Executive Summary Tesco reported total group sales (ex fuel) of 3.6% in 1Q18, or 0.8% at constant exchange rates. Tesco grew UK comparable sales by 2.3% in 1Q18, up from 0.7% in the prior quarter. Group comps came in at 1.0% in 1Q18, up from 0.4% in 4Q17. Please Login to read the full report. Not a member? To access this content for free, register for a free account. This document was generated for
