With all the noise about Amazon/Whole Foods, it would be easy to miss what’s going on in other retail news. We’ve got a look at retail around the world to keep you current, starting with George Clooney and partners selling their Casamigos tequila business to Diageo for $1 billion. Will Amazon’s Prime Wardrobe fashion “box” service be another nail in retail’s coffin? Markets think so.
There’s a new microbrew on top of Zymurgy Magazine’s charts for the first time in eight years – Two Hearted Ale, an IPA from Michigan based Bells Brewery. Under credit protection in Canada, Sears will close another 18 US Sears and two Kmart stores by Sept, bringing the total closures to 260 stores in 2017. Bloomberg reports Nike is ready to start selling its products on Amazon creating uncertainty among other retailers carrying Nike products such as Finish Line, Footlocker and Dick’s Sporting Goods.
Forbes reports US retailers will close more than 3,500 stores in 2017 but the real impact will come with 300,000 fewer retail jobs all across America. Retail Ireland, the British Retail and Northern Ireland Retail Consortiums say Brexit could negatively impact retail jobs without UK government protection. Cushman & Wakefield say the struggles of US retail may be less severe in the UK and EU because the US is “over-retailed” with 29,000 ft² per thousand population compared to 2,856 SF/1,000 in the UK and 2,691 SF/1,000 in Europe. Russian billionaire Mikhail Fridman’s L1 Capital bought Holland & Barrett, Britain’s biggest chain of health food stores for $2.3 billion.
Swedish start-up Wheelys and Chinese Hefei University of Technology opened a 24-hr, mobile supermarket in Shanghai where customers can pick up grocery essentials, scan by mobile and simply leave the store with payment deducted automatically by smartphone. With no employees, and a cost of approximately $100,000, the company is considering building a driverless version that brings the mobile supermarket directly to customers. US grocery wars could heat up if EU’s Ahold Delhaize entertains offers on its US grocery stores from EU or US buyers such as Kroger.
George Clooney just sold his tequila business for up to $1 billion
George Clooney is selling his tequila company Casamigos to Diageo for as much as $1 billion, the company said Wednesday.
“If you asked us four years ago if we had a billion dollar company, I don’t think we would have said yes,” Clooney told CNBC via email. “This reflects Diageo’s belief in our company and our belief in Diageo. But we’re not going anywhere. We’ll still be very much a part of Casamigos. Starting with a shot tonight. Maybe two.”
Diageo said it will initially pay $700 million, with the potential for another $300 million based on the tequila’s performance over 10 years. The transaction is expected to close during the second half of 2017. Diageo doesn’t expect the deal to add to its earnings until its fourth year. In the first three years, the brand will not have any impact on earnings Via cnbc.com
Amazon is radically changing how we shop for clothing
This week Amazon took a major step toward becoming a bigger presence in your wardrobe, and we’re only just beginning to understand what the ramifications for the retail industry at large will be.
The new Prime Wardrobe program, which lets Amazon Prime customers try on clothing at home over a period of seven days for free before purchasing, is similar to many “box” services like StitchFix and TrunkClub.
The key difference with Amazon’s service is that customers choose what they put in their boxes — from three to 15 items — instead of stylists or algorithms. Customers can also order a box as often as they wish, and there’s no monthly subscription like other box services. Via businessinsider.com
Here are the 10 best beers in the US, according to Zymurgy Magazine
For the first time in eight years, there is new beer atop the list of “Best Beers in America.”
Two Hearted Ale, an IPA from Michigan based Bells Brewery, has been named the country’s best brew, according to Zymurgy Magazine’s 15th annual ranking. The survey asks members of the American Homebrewers Association, which publishes Zymurgy, to choose up to 20 of their favorite commercial U.S. beers available for purchase in an online voting system.
After the votes were tallied, Two Hearted bested Russian River’s Pliny the Elder, which had finished in the top spot for eight consecutive years. Via cnbc.com
Sears to close more stores amid retail industry tumult
Struggling department-store retailer Sears on Friday said it will shutter another 20 stores – including 18 Sears stores and two Kmart locations – by mid-September, as it continues to respond to an industry-wide shift in consumer shopping habits that’s hitting traditional retailers particularly hard.
The move puts Sears’ total store-closure count so far this year at more than 260, leaving it with 1,100 locations, USA Today reported. In a statement, the company said it understands customers may be disappointed when stores close, but encouraged them to look to the Shop Your Way membership platform as well as website and mobile apps. The liquidation process for the newly announced closures is set to begin by the end of the month.
The Hoffman Estates, Illinois-based company said earlier this month its restructuring efforts – which include store consolidation, a reduction in head count, and the recent sale of its Craftsman brand – have resulted in about $1 billion in annualized cost savings and allowed Sears to pay down roughly $418 million in outstanding loans. Via foxbusiness.com
Nike reportedly to sell directly on Amazon
Nike will soon sell directly through Amazon’s brand-registry program, unnamed sources told Bloomberg Wednesday.
The plan is intended to help clamp down on sales of counterfeit Nike goods on Amazon’s marketplaces. Nike sells its goods on Amazon’s Zappo’s site, though not yet through Amazon.
If true, Nike’s plan to sell directly through Amazon is a blow to retailers like department stores and specialty retailers like Foot Locker, Finish Line and Dick’s Sporting Goods, as well as to third-party Amazon Marketplace sellers offering either bona fide or counterfeit Nike goods. Shares of those companies fell on the news Wednesday. When it comes to department stores, discount players Kohl’s and J.C. Penney could be hit especially hard because they’re more dependent on those sales than Macy’s or Nordstrom, which both have a lower penetration of the brand, according to a note emailed to Retail Dive from Gordon Haskett analyst Chuck Grom. Via retaildive.com
Retail displacement remakes job force, looms as political issue
The shift can be seen in headlines from this year. In January, Macy’s announced it was shuttering 100 stores. In March, J.C. Penney said it would close 138 locations. Forbes reported earlier this year that 21 retailers had announced the closure of more than 3,500 stores in 2017.
The changes can also be seen in government data. There were fewer people working as retail salespeople in 2016 than in 2014, according to numbers from the Bureau of Labor Statistics — despite the fact that the unemployment rate was 1.3 points lower.
And those figures don’t take into account the hits the retail industry has taken so far in 2017 while the unemployment rate falls further, to 4.3% in May. Much has been made of the struggles of the coal and manufacturing industries, but the great retail displacement has largely been ignored up to now. Via aol.com
Irish and UK retailers join forces to highlight Brexit challenges
Retail Ireland has joined forces with the British Retail Consortium and the Northern Ireland Retail Consortium to explore the implications for the sector arising from Brexit.
They will meet in Dublin with a number of Government Departments, consumer advocates and individual retailers to seek solutions to mitigate the negative impacts on retailers and consumers alike.
It is estimated that more than 280,000 jobs in the Republic of Ireland and approximately 80,000 jobs in Northern Ireland are dependent on the retail sector. The Irish and UK retail representative bodies have jointly called on the Irish and UK Governments to protect consumers and ensure that Brexit negotiations yield results for the industry that safeguard employment and retail growth, minimize cost pressures and regulatory burdens while also maintaining fair consumer prices and cost competitiveness. Via www.businessworld.ie
Five Reasons The UK and Europe Won’t Feel America’s Retail Pain, and Two Why It Might
Retail in the U.S. is not in a death spiral, as The Real Deal claimed recently (using a shorter and ruder adjective).
But it is not in a great place either. Dozens of department stores and fashion retailers are either in bankruptcy or closing hundreds of stores. As a result, shopping centre owners have been the target of short sellers, and have in some cases been forced to buy back big chums of space in their malls to try and refurbish and re-let it.
The truism says that where the U.S. goes, the U.K. and Europe inevitably follow six months to a year later. But the chances of this retail strife emigrating across the pond wholesale are unlikely. While there are some things to be wary of, these five factors will keep U.K. retail healthy.
A key figure to keep in mind when comparing the U.S. and Europe is the number of shopping centres per capita — the U.S. is simply more over-shopped, with around 29K SF of gross settable area per 1,000 people, according to Cushman & Wakefield, compared to 2,856 SF/1,000 in the U.K. and 2,691 SF/1,000 in Europe. Via forbes.com
Mikhail Fridman’s L1 Retail buys Holland & Barrett for £1.8 billion
LONDON — Holland & Barrett, Britain’s biggest chain of health food shops is to be bought by L1 Capital, a fund headed up by Russian oil billionaire Mikhail Fridman.
L1 Capital will pay £1.8 billion ($2.3 billion) to acquire Holland & Barrett from US private equity powerhouse Carlyle, which has owned the retailer since 2010. Carlyle bought Holland & Barrett during the takeover of US firm Nature’s Bounty for $3.8 billion.
L1’s purchase of the chain — which has around 1,150 shops globally — marks its first acquisition since being launched at the tail end of 2016 by Fridman’s holding company LetterOne. It was created to invest around $3 billion across the retail sector, looking for companies that are “moving with and leading long-term trends.” Via uk.businessinsider.com
China trials mobile supermarket without employees
A mobile, fully autonomous supermarket has opened its doors in Shanghai, one of China’s largest cities. The pilot is called Wheelys Moby Mart, open 24 hours a day and said to be easily deployable.
The store has several products for direct consumption, like milk, ready-made meals and medicine. Customers simply walk into the store, grab what they want and exit the store. They scan the items with their smartphone and the costs are deducted from their bank account, which is linked to the app. Other items can be ordered beforehand and picked up at the supermarket.
Wheelys Moby Mart was developed by Swedish start-up Wheelys, in collaboration with the Chinese Hefei University of Technology. They want to create a self-driving version that can come to the customer. One Wheelys Moby Mart should cost about 100,000 dollar (90,000 euro), with several models planned for 2018. Via retaildetail.eu
Ahold Delhaize is interesting acquisition target in the United States
Analysts expect another acquisition phase in the United States after Amazon acquired supermarket chain Whole Foods. Ahold Delhaize is often named as a possible target.
According to business bank Bernstein analyst, Bruno Monteyne, Ahold Delhaize has several options. Its American stores may be an interesting addition to Amazon, which could benefit from an expanded distribution network in American cities. On the other hand, Ahold Delhaize’s European activities would not be of great interest to Amazon, because it would more likely look at British chains Morrison or Sainsbury or French Carrefour if it were to expand here.
America’s second largest chain, Kroger, could also very well be interested in Ahold Delhaize’s American division, which is number four in the market. Together, they would generate 180 billion dollars in turnover, approaching market leader Walmart at 200 billion dollars. In this deal, Ahold Delhaize’s American and European activities would probably be split. Via retaildetail.eu