Apr
 24
 2018



Caroline

Hello,

Happy Tuesday! Welcome to this new edition of The Spin. We live in a global village. Our economic interests are cosmopolitan. Today we look at the nomination of an English CEO at an Australian firm. We then follow Walmart's progress in India. That company is getting closer to conclude its Flipkart deal. We also give an update on Rana Plaza in Bangladesh. Finally, we salute the European Union's free trade agreement with Mexico. Enjoy the round trip across the pond and have a great week. Caroline.



people

British touch. The beleaguered Australian department store giant, Myer went to England to find its new CEO, John King. He ran the British retailer House of Fraser for 8 years and led its successful recovery. However, his new mission is not an easy one. The company recently unveiled $538 million in write downs and its biggest shareholder Solomon Lew is fed up with the lack of progress at Myer. The department store chain suffers from intense competition from international entrants.


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markets

Indian advantage. Walmart seems to have the upper hand on Amazon in India. The Bentonville giant could finalize the acquisition of a majority stake in Flipkart within 2 weeks for at least $12 billion. All the major investors in Flipkart, Tiger Global Management and Softbank Group Corp are now favoring Walmart. Flipkart brings to the buyer a royal entrance in a 1.3 billion people emerging market. Walmart's CEO doesn't want to repeat in India his Chinese mistakes.



Bangladeshi commitment. Five years after the Rana Plaza disaster, the accord on fire and building safety in Bangladesh is about to expire (metered paywall). Two thirds of the 220 original companies which signed the accord have committed to an extension of the agreement to improve the working conditions of employees. Japan's Fast retailing and British Debenhams are on board, but several well known contractors are dragging their feet. Just Jeans in Australia, Puma in Germany and English Sainsbury are still m.i.a.



Mexican agreement. The European Union and Mexico reached (paywall) a political agreement to upgrade their 18 year old free trade deal. The final text will eliminate tariffs across the board. Mexico's textile and apparel industry already benefits (paywall) from duty free access to the European market but it only represents 0,06% of the European apparel imports. Nevertheless, the deal is important because it puts pressure on the United States to refresh the North American Free Trade Agreement.





brands

Too sexy. The Victoria's Secret brand is losing ground. According to data analytics firm, YouGov, Victoria's Buzz score was at a high 31 in early 2016, but it recently tumbled to 23. Ratings of the hot last television fashion show fell 30%. YouGov researchers explain the decline of the dominant lingerie brand in America by the impact of the #MeToo movement. Women today prefer comfort and fit, more than sexiness and new brands Cosabella, Hanky Panky, Wacoal...are on their radar.



Most wanted. Affluent Chinese consumers prefer high end French bags. A recent survey by investment bank RBC shows that Chanel is the number one most wanted brand: 20% of buyers who made at least one luxury purchase in the last 12 months put Chanel on top of their list. Then follows Gucci (16%), Hermès (12%) and Prada (9%). However if money was not an issue, Hermès would be the number one desired brand. The most expensive bag ever sold at auction in Hong Kong was its Himalayan croc Birkin that went for $491,700.





tech

Left alone. While in store, customers prefer to be left alone with useful tech tools. That's the main conclusion of a recent survey of 3000 American consumers by HRC Retail Advisory: 95% of consumers beg to limit (paywall) their interactions with store associates to specific questions. They'd rather use free in store Wi-Fi (30%) to share pictures with family and friends and to receive instant sales information via smartphone (34%). Dressing room tech (17%) and mobile payments (8%) are not yet critical.



Blue nation. Amazon is going after (paywall) the children's wear business with Blu and Blue. The label, created in 2015, will launch its first e-commerce platform on Amazon in May. Blu and Blue is an eco-friendly denim brand designed for infants through age 16. Boys and girls may expect to find bomber jackets, rompers, jeggings...in all, an assortment of 300 items. With Blu and Blue, Amazon is pursuing a lucrative market that Target and Walmart already serve. Target is well known for its Cat and Jack brand.







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