Retail News CRM

Author: Mei Ling Tan

  • Moody’s lowers Parkson Retail Group debt outlook to negative

    Moody’s lowers Parkson Retail Group debt outlook to negative

    Moody’s Investors Service has lowered the outlook for Parkson Retail Group Ltd’s Ba3 corporate family and senior unsecured debt ratings to negative from stable.

    In a statement issued on Wednesday, Moody’s has also affirmed Parkson’s Ba3 corporate family and senior unsecured debt ratings.

    A Moody’s vice president and senior credit officer Lina Choi said: “The outlook change reflects Parkson’s weaker-than-expected financial results for 3Q 2015.

    “Our expectation that its profitability and financial leverage will likely remain weak for its Ba3 ratings over the next 12-18 months, given the ongoing challenges apparent in China’s retail market.”

    Parkson, which is listed on the Hong Kong Stock Exchange and one of the largest operators of department store chains in China, reported a normalised operating profit of 86.7mil renminbi — after excluding a one-off litigation penalty of 140mil renminbi — in the first nine months of 2015 compared with 346.4mil renminb in 2014.

    “This decline was due to the consideration that the company faced strong competition during this time and also experienced a 9.4% decline in gross sales proceeds (GSP) in 3Q 2015, a further deterioration from the 3% fall in 1H 2015.

    “Moody’s notes that subdued retail sentiment and strong competition have prompted Parkson to offer more promotions and discounts on its products,” it said.

    Moody’s also estimated Parkson’s profitability — as measured by EBITDA/GSP — would decline to 11% for all of 2015 from 12.7% in 2014.

    At end-2014, it owned and managed 60 stores spread across 34 Chinese cities. It targets the middle-end of the Chinese retail market. It is 53.1%-owned by Parkson Holdings Bhd (unrated), an affiliate of Malaysia’s Lion Group.

    Moody’s said despite the company’s plan to improve profitability through more direct sales, Moody’s expects EBITDA/GSP to fall to around 10%-11% in the next 12-18 months. Such a range would be close to its rating downgrade trigger level.

    The ratings agency also said Moody’s expected Parkson’s retained cash flow (RCF)/net debt to decline to 8% at end-2015 from 11.3% at end-2014 due to the fall in cash holdings.

    It pointed out Parkson’s cash and cash equivalent fell to 3.6bil renminbi in 3Q 2015 from 4.8bil renminbi at end-December 2014 due to increased working capital outflow and capital expenditure on new stores.

    Moody’s expects RCF/net debt to stay around 8% over the next 12-18 months, a level which provides little space from our downgrade trigger of 8-10%.

    At the same time, Parkson’s liquidity remains adequate, although its cash buffer has narrowed. Cash and cash equivalent of 3.6bil renminbi at end-September 2015 could cover its short-term debt of 700mil renminbi.

    Moody’s said Parkson’s Ba3 corporate family rating reflects its competitive position in China’s highly fragmented department store industry, underpinned by its well-recognised brand name and national presence.

    “The rating also considers its low level of collections risk and adequate liquidity profile. However, the rating is constrained by structural challenges, such as intense competition from other retailers, rising rental rates, online retailing and the execution risks associated with its aggressive expansion into lower-tier cities in China.

    “In particular, Parkson’s dependence on leased stores is high, exposing the company to the risk of reallocations and escalating rents. These challenges, together with its ambitious investments in new stores, will continue to pressure its profitability and financial metrics.

    “The outlook could return to stable if Parkson curbs the deterioration in gross sales proceeds, and demonstrates an ability to restore profit margins,” it said.

    Moody’s said the metrics which it would consider for a return to a stable outlook include:

    (1) adjusted EBITDA/gross sales proceeds recovering to above 10%-11%; and (2) adjusted retained cash flow/net debt rising above 10% on a sustained basis.

    The ratings could experience downward pressure if Parkson fails to stabilise its profitability and financial metrics due to: (1) rising competition; (2) reduced bargaining power over its concessionaires/suppliers; or (3) the need to make large investments for store expansions.

    Credit metrics indicative of downgrade pressure include the likelihood of adjusted EBITDA/gross sales proceeds trending below 10%-12% or of adjusted retained cash flow/net debt trending below 8%-10% on a sustained basis.

    Any sign that the company is extending financial support to its parent, the Lion Group, will also pressure Parkson’s corporate family rating.

  • Candidates Start Lining for Indonesia Property Awards 2016

    Candidates Start Lining for Indonesia Property Awards 2016

    Ensign Media is the publisher of Property Report and the organizer of the event.

    “At the first-ever Property Report Congress held in October, the majority of panelists from Indonesia predicted that the coming year would offer a better outlook for the country as the domestic real estate market continues to evolve and adapt to changes.”

    Great names in Indonesia property industry, including Sinar Mas Land and Ciputra Group, won several trophies in 2015’s first Indonesia Property Award.

    The award has prepared 27 trophies for the next year’s event, with categories covering a range of segments including condominium, housing, villa, hotel, office and retail.

    Commercial real estate services company Colliers International revealed a gloomy report on Jakarta’s office, apartment, retail, hotel and industrial estate market in the third quarter.

    The report said the occupancy in Jakarta’s central business districts in the third quarter 2015 has fallen to 92.7 percent, down “moderately” by 3 percent on a yearly basis.

    Apartment prices witnessed a “minor” increase of 3.4 percent quarterly and 11.2 percent annually to Rp 29.87 million per square meter.

    Occupancy rates in the retail sector dropped 1 percent to 85.3 percent in a year-on-year basis in the third quarter of this year.

    Occupancy in Jakarta’s hotels also dropped by 1.2 percent quarterly to 57.2 percent.

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  • Innovation is not an issue in Indonesia: Ideosource’s Andrias Ekoyuono

    Innovation is not an issue in Indonesia: Ideosource’s Andrias Ekoyuono

    Prior to his current work, he spent years at Indonesia’s major online media Detik.com, followed by a stint at Hewlett-Packard and XL Axiata.

    “Back in Detik.com, my work involved setting up new businesses, business models, and monetisation models. I also did some marketing,” he explains. “There is actually a continuation between what I am doing then and now.”

    As an Indonesian VC, Ideosource’s portfolio ranges from gaming with Touchten, media with Female Daily Network, e-commerce with Bhinneka, and innovative companies for niche markets such as Stockbit and e-Fishery.

    Its latest investment is a sports wearables company called Turing Sense, a Silicon Valley-based startup founded by Indonesians.

    Dividing time between mentoring and looking for new business, as well as writing and speaking about entrepreneurship, Ekoyuono discusses startup and innovation in Indonesia – and why, despite challenges here and there, there is progress to celebrate.

    Can you tell us how the tech startup landscape in the country is?

    There is a significant difference with when we began in 2011. At that time, [the tech industry] was still in its early stage, we even had to make our own incubation programme, since incubators were basically non-existent. But lately, there have been more and more incubators, both from telco [companies] and campuses. There is definitely progress.

    We are starting to get used to hearing news about funding, and founders are getting more diverse. When we began, most founders were university graduates … But now, we have begun to see Internet industry veterans and diaspora – Indonesians who have been living and working abroad.

    There are also founders who have already run a conventional business, migrating to the digital side.

    Up until two years ago, people thought the Internet industry was cool, but [it was] still something for the distant future. No sense of urgency. But Tokopedia’s funding last year really got people to wonder … What is this company and why is US$100 million given to them?(laughs)

    Especially since they also advertise heavily on conventional media such as TV and newspaper. People began to see the Internet as ‘something’.

    But the most phenomenal is Go-Jek. Once it got to the level of the ojek drivers, it strengthened the message that technology is indeed for everybody.

    Speaking of business types, does e-commerce remain a primadonna in Indonesia?

    If we are looking with a top-down approach, there are some industries with strong visibility. First is media, then e-commerce, then fintech … The others are transportation. These are the ones with the biggest market. Consumers are starting to evolve.

    What founders need to consider is how to bridge between a digitised consumer and the industry itself, which might be run by conventional business and transaction model.

    Will this sector grow? I believe it will, followed by other sectors. Fashion and electronic goods still play a crucial role. But groceries are also starting to grow.

    What are the greatest challenges for investors in Indonesia, especially in terms of scouting for new talents and business?

    If you read my writing, you might notice that the main idea is about sharing knowledge to Indonesian startups to prepare for their pitch. Informing them what sets them apart from traditional entrepreneurs.

    The issue that we often see in Indonesian startups is that many founders do not have a deep understanding of the problem they are trying to solve. They often shoot something that may not be that big of a problem; that consumers do not even care about … It is advisable to start from the problems you encounter yourself.

    Second, often, founders do not have enough knowledge about building a sustainable business. For example, selling durian online is certainly not sustainable as you can only do it during durian season! (laughs)

    There is also a problem of scalability. How to balance between cost and business model.

    Does this mean that investors only sit around and wait? No. Especially for Ideosource, since we are local, we have been spending our time to build the ecosystem. Doing campus visits, building communities, writing in the media …

    Is innovation dead in Indonesia? Do founders tend to play it safe with businesses with great revenue?

    Oh, I’d say it’s not even an issue! Many people believe so because they are looking at Facebook and Twitter, which, at the beginning, might seem to not have a clear mechanism for monetisation. There is a misconception. I believe they did [consider monetisation], but it is just not [as] exposed.

    Our main problem is not innovation itself, our main problem is not fully understanding which problem to tackle. “We want to gather users first!” Yes, but what do you want these users to do?

    When it comes to innovation… Every year, we meet with 300-500 startups and guess what — I cannot mention names yet — but many of them are doing something very advanced. We are starting to get there.

    But, in terms of ecosystem, we are still like China and India at their early stage. IoT is still sitting at the back seat. Which is why founders in that subsector tend to be more quiet compared to those in e-commerce. They are still hiding in their labs.

    Generally, we need to dream bigger.If you want to create a startup, you should visualise ‘how big will the animal be?’

  • 759 Store Hong Kong closes four shops

    Just three months ago Hong Kong supermarket retail concept 759 Stores was boasting a 48 per cent increase in sales and the opening of 57 new shops last financial year.

    This month the chain says it will close four Hong Kong stores citing the lacklustre retail climate in Hong Kong.

    The four stores are all located in shopping centres owned by The Link REIT which according to 759 Stores has refused to grant rent reductions during negotiations over lease renewals.

    759 Store Hong Kong, the trading brand of listed business CEC International Holdings, positions itself as in between convenience stores and supermarkets, its primary point of difference its ‘self-import model’ of stock and uniform margins.

    Its 759 Store and 759 Supermarket concepts have evolved since the brand’s launch in 2010 from just selling sweets and snacks into a broader range of low margin, high turnover lines across many categories, including rice and grain, non-staple food, frozen food, alcohol, pet snacks, household goods, kitchenware, household electrical appliances, personal care supplies, cosmetics, supplies for babies, toys, novelties and accessories.

    Now CEC is planning to further diversify from its core snack and beauty products businesses, seeking a Chinese medicine license allowing it to sell packaged traditional soup in 100 of its stores.

    There are 260 759 branded shops across Hong Kong. Some of these will be expanded from the smaller store model into larger supermarkets, according to a report in today’s Hong Kong Economic Journal, which quotes 759 Stores chairman Lam Wai-chun.

    Lam said the company’s online business has already broken even and on Singles Day the company sold a record $20 million of products.

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  • Lawson Japan mulls banking foray

    Lawson Japan mulls banking foray

    Convenience store operator Lawson Japan is considering a foray into banking.

    The company says that with more than 12,000 convenience stores operating across Japan it has the physical branch network in place to accept deposits from customers.

    It also has the IT infrastructure in place which could be easily modified to allow customers to pay bills, make bank transfers and other basic banking services – all of which would draw additional customers in store, or increase the frequency of visits of existing customers.

    underlying the seriousness of the planning, Japanese bank Mitsubishi UFJ Financial Group has indicated it would take a small stake in the new bank, and contribute ATMs, IT and other services to a Lawson Bank.

    If Lawson does move into banking, it would not be Japan’s first retailer to do so. Rivel Seven & I Holdings, parent of 7-Eleven, established a bank in 2001. Aeon received a banking licence in 2007 and has since expanded its banking and financial services into other markets such as Malaysia and Thailand.

    Another c-store operator, FamilyMart last year began exploring a banking partnership with Japan Net Bank, although those discussions have not yet born a finite plan.

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  • Lotte Duty Free in shock Seoul licence loss

    South Korea’s Lotte Duty Free has lost the licence to operate one of its large stores in downtown Seoul.

    Beleaguered Lotte – in the midst of a family feud over its management and on the eve of a planned IPO of its Hotels unit – has been displaced by heavy industries company Doosan Co in the 10,990 sqm store in South Korea’s tallest building – the Lotte World Tower and Mall.

    Lotte has had the licence to run the store for five years and sunk US$255 million into the site.

    “The customs agency decision has shattered its ambitions to grow it into the world’s largest duty-free outlet over the next decade,” reported Japan Today newspaper in Tokyo.

    “The setback was particularly badly timed given the preparations for an initial public offering of shares in Lotte’s hotel unit, which runs the group’s duty-free business.”

    Lotte’s duty free business is a subsidiary of Lotte Hotels, contributing 80 per cent of the operation’s revenues.

    Park Jong-Dae, analyst at Hana Financial Securities, said investors are concerned the loss of the licence will hurt Hotel Lotte’s overall profits.

    “As a result, the company’s valuation may fall when it goes public,” he said.

    Lotte Duty Free’s flagship Myeong-dong store is unaffected.

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  • Causeway Bay retail rents remain expensive

    Causeway Bay retail rents remain expensive

    New York’s Upper Fifth Avenue is the most expensive retail street in the world with rents rising to US$3500/sqft. in 2015.

    That’s nearly 50 per cent expensive than Causeway Bay in Hong Kong, which has held its second place on Cushman & Wakefield’s latest global rankings, despite the decline this calendar year of 14 per cent.

    Cushman & Wakefield’s Main Streets Across the World report tracks over 500 of the top retail streets around the globe, ranking them by their prime rental value using Cushman & Wakefield’s proprietary data. The 27th edition of the report shows that rents have risen in 35 per cent of streets around the world – despite the increased global uncertainty experienced over the past 12 months. The report also includes a ranking of the 65 most expensive streets – the top one per country.

    New York’s Fifth Avenue retained its position as the most expensive global retail location with rents up an average 3.6 per cent year on year and 46 per cent above the second-placed Causeway Bay in Hong Kong ($2399/sqft).

    The top 10 Global high street retail destinations by rent (in US$/sqft/year):

    1 Fifth Avenue (New York) – $3500.

    2 Causeway Bay (Hong Kong) – $2399.

    3 Avenue des Champs Élysées (Paris) – $1372.

    4 New Bond Street (London) – $1321.

    5 Via Montenapoleone (Milan) – $1035.

    6 Bahnhofstrasse (Zurich) – $895.

    7 The Ginza (Tokyo) – $882.

    8 Myeongdong (Seoul) – $882

    9 Kohlmarket (Vienna) – $478.

    10 Kaufinger / Neuhauser (Munich) – $459.

    In Asia Pacific, there has been a downward pressure on rents on the back of weaker retail sales and slowing tourism in China, particularly. This has resulted in lower rents, which is creating incentives for more international luxury brands and high street retailers to move in. However, interest rate hikes by the Chinese government could impact consumer spending power. Elsewhere, high-profile international retailers are targeting both Australia and New Zealand and Metro Manila.

    Theodore Knipfing, head of retail, Asia Pacific at Cushman & Wakefield, said the outlook for Asia’s overall retail market is largely positive, with retail sales growth averaging 8.5 per cent over the next five years (in US dollar terms).

    “Rising tourist numbers are spurring robust and sustained retailer demand – albeit firmly focused on prime, well-located space. Although the growth of eCommerce is notable across the region, physical stores will remain important, although landlords will need to focus on improving the shopping environment and customer experience in order to compete for retailer demand.”

    Europe

    Avenue Champs Élysées in Paris retained its crown as the most expensive retail location in EMEA, followed closely by London’s New Bond Street. Strongest rental growth this year was recorded in Dublin’s Grafton Street and Covent Garden in London, as well as in top high streets in Milan and Rome. However, high streets in Russia and Ukraine experienced sharp declines linked to the conflict between the two countries that yielded slowdowns in economic growth and retail sales.

    Justin Taylor, head of EMEA retail at Cushman & Wakefield, said: “Improving employment prospects, rising real wages and healthier consumer confidence in advanced economies are set to offer more positive momentum for the retail sector. From an EMEA perspective, despite any economic and political uncertainties in certain countries, the retail market is expected to see further improvements. Indeed, a strong retail sales growth forecast, robust occupier demand and a lack of supply in many locations mean rents will keep rising in the most popular high streets.

    “Indeed, tight availability is shaping the retail landscape, pushing the geographic boundaries of well-established high street markets outwards,” Taylor concluded.

    The Americas

    The US represents seven of the Top 10 most expensive cities in the Americas, with Toronto, Rio de Janeiro and Vancouver at sixth, seventh and eighth, respectively. Seattle posted the highest rent growth in the US, up 27.3 per cent to $70 per sqft, while Los Angeles’ Rodeo Drive corridor posted the highest retail rents outside New York at $800 per sqft, a 23 per cent increase. Strong tourism and a vibrant local economy make San Francisco’s Union Square a market to watch with its 1.1 per cent vacancy, $650 per sqft rents and 13 per cent rent growth, which follows 21 per cent rent growth for the same period through mid-2014. Similarly, Chicago’s Michigan Avenue posted 8.2 per cent rent growth with average retail rents of $525 per sqft.

    At $320 per sq. ft., Toronto’s Bloor Street retail corridor was the most expensive high street in Canada, while Edmonton’s Whyte Avenue was the most affordable in the Americas at $45 per sq. ft.

    Gene Spiegelman, vice chairman, head of retail services, North America at Cushman & Wakefield, said: “The Americas region is expected to sustain a positive trajectory going forward into 2016, bolstered by a steady consumer sector benefiting from a material reduction in energy costs and stable employment expectations, especially in the US.

    “Retailers will continue to add physical stores to support their expansion plans while at the same time optimising their footprint to respond to the ongoing evolution of ‘clicks and bricks.’

    “International luxury brands will continue to dominate the high street, providing a boost to the key destination cities with high exposure from tourism and strong foot traffic.”

  • HSBC results hit by Asia market falls

    HSBC results hit by Asia market falls

    HSBC has reported a 14% drop in profits for the third quarter of 2015 after adjusting for foreign currency movements, as the sharp falls in stock markets across Asia hit revenues in its retail banking and wealth management division. The overall adjusted profit was $5,5bn (£3.56bn, €5.0bn) compared with $6.4bn in the third quarter of 2014.

    The global bank said adjusted revenues were down 4% in the three months to the end of September to $14bn, mainly because of the drop in the Principal Retail Banking & Wealth Management division. Revenue was also lower in Global Banking & Markets operation.

    Operating expenses were also up 2% in the third quarter at $8.58bn, mainly due to increased spending on regulatory programmes and compliance.

    “Despite slowing growth in the mainland Chinese economy and market volatility in Asia, there has been no visible impact on our Asian credit quality in 3Q15,” group chief executive Stuart Gulliver told an investor briefing.

    Hong Kong hit

    Iain Mackay, HSBC’s group finance director, said the reduction in revenue in the wealth management operation mainly reflected lower earnings in Hong Kong.

    “This was caused by the stock market correction in Asia, which reduced asset valuations in our life insurance manufacturing business,” Mackay said.

    Profit from retail banking and wealth management operations also fell 32.8% in the third quarter when compared to the previous quarter. While for the Asia region as a whole profits were down 30% in Q3 compared to Q2.

    The bank also reported a 19.1% drop in profits from the Middle East and Africa region during the latest quarter compared with the previous one.

    Overall HSBC ‘s results were better than expected after costs related to fines and compensation for customers fell by $1.4bn. However, its shares weakened by 1.2% in London morning trade.

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  • Vertu eyes China

    Vertu eyes China

    Luxury phone brand Vertu says its new Hong Kong investor will allow the brand to embark on its next growth phase – into Mainland China.

    Vertu will continue to operate its global business from its UK Headquarters with new partner, Godin Holdings, a Hong Kong based company backed by a group of international investors. This move will support accelerated growth for Vertu and maximise its ‘Luxury Tech’ market leadership position.

    Since shipping its first phone in 2002, Vertu had sold around 450,000 devices worldwide, with an average selling price of around £5000 per handset last year.

    “Godin brings with it a significant understanding of the world’s fastest developing luxury market, China, as well as an ability to help with the technical development of a future range of industry leading Vertu products,” the company said in a statement.

    Vertu runs 70 of its own boutique retail stores and is sold through 430 partner stores in 66 countries. It is not yet clear if the brand will expand in China through its own store network of partner with an existing retailer.

    The new investment has led to a management shakeup with CEO Massimiliano Pogliani stepping down after three years

    As part of the new investment, a number of changes have taken place within Vertu’s management, replaced by Billy Crotty. Justine Rouch, COO and Davide Vassena, VP product and marketing, have both also left the company.

    Crotty says the company has a clear vision for the next phase of its growth.

    “Vertu is regarded as the clear leader in the luxury mobile category; a company with a strong USP, brand equity, product roadmap and established retail network; the ‘Handmade in England’ aspect of Vertu is appreciated globally as a particularly valuable, fundamental brand strength.

    “Godin Holdings’ investment will allow Vertu to maintain its leadership position within the luxury technology industry and to expand its already world class product portfolio.

    “Mainland China is a key market for Vertu, alongside its other pan-Asian and European business. All in all, the Godin team are perfectly placed to offer both investment into the company, as well as mobile technology industry expertise and contacts. Godin believes that significant growth opportunities lie ahead for Vertu, within specific markets as well as through new product developments.”

    A key part of Vertu’s future is the launch of Vertu Club, explains Crotty.

    “Vertu Club will be the umbrella for the evolution of our on-device and off-device services. Our aim is to ramp up the already very close relationship we enjoy with our customers through Concierge, Life and Certainty apps, in order that it can inform, to an ever increasing degree, not only the portfolio of services we offer, but the manner in which we do so, in order that we create a world class personal service, unattainable in any other format than that which can be achieved by being a member of the Vertu Club.”

  • Kakao, KT to launch Korea’s first Internet banks

    Kakao, KT to launch Korea’s first Internet banks

    Two consortiums, led by South Korean Internet giant Kakao and No. 2 telecom operator KT, were approved to launch the nation’s first Internet-only banks next year, the banking authority said Sunday.

    Under the government’s pilot program, the two banks will offer financial services from deposits, lending and credit cards to foreign exchange transactions through their online platforms only — the first of their kind in Korea’s 23 years of financial history.

    Their operations are expected to start after they get financial approval in the first half of next year. The Financial Services Commission requested they come up with stricter security measures.

    Do Kyu-sang, financial services chief at the Financial Services Commission, speaks at a media meeting held at the agency`s briefing room in Seoul on Sunday. Yonhap

    According to the agency, Kakao’s Kakao Bank gained high scores for innovative services based on its immensely popular mobile messenger app KakaoTalk with 40 million users.

    KT’s K Bank was also praised for better customer access as it has teamed up with partners from diverse sectors such as telecommunications, payments and retail, it said.

    Internet banks come as the government looks to open up its financial services sector recently. Internet companies are already jumping into the bandwagon amid the rapid infiltration of online banking and mobile payments here.

    Due to stringent financial regulations, however, they are still required to partner with a licensed bank to launch their own Internet bank.

    Kakao and KT are especially pinning high hopes on “middle-interest loans” that would appeal to small borrowers.

    Currently, top-tier banks offer an annual rate of 3 percent to 5 percent, while the secondary financial institutions such as mutual savings banks or capital services firms charge whopping 15 percent to 34 percent interest rates.

    Internet banks say they can better evaluate the creditworthiness of borrowers based on the data they collect from hundreds of millions of mobile devices — including location, the use of local services and e-commerce transitions.

    Kakao Bank plans to bring Kakao’s traffic resources, big data on users and data analytics, while its bank partners KB Kookmin Bank and Korea Investment Holdings have knowledge of financial products.

    The bank also aims to go global as it has secured ties with Tencent, China’s biggest social-networking and mobile games company, and the U.S. online retail giant eBay, which also owns Korea’s two leading shopping sites Gmarket and Auction.

    “We will ramp up efforts to offer diverse and practical benefits for customers through Kakao Bank,” said Yoon Ho-young, Kakao’s senior vice president.

    K Bank also showed confidence in building a more accurate credit rating system based on KT’s own delinquency customer list and the data collected from its card and bank partners, including Woori Bank, the nation’s second-largest lender in terms of assets.

    “We will expand benefits for small borrowers and start-ups,” said Kim In-hoi, the bank task force leader. “We aim to become the No. 1 Internet bank by offering more convenient on- and off-line services.”

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  • McDonald’s Japan arrests sales decline

    McDonald’s Japan arrests sales decline

    McDonald’s Japan has lost 29.2 billion yen in the first nine months of this year, roughly US$236.8 million.

    However, the beleaguered fast food business, which launched a Business Revitalisation Plan involving closing 131 stores in April, says it has arrested its sales decline.

    Same store sales in the third quarter of this year slid by four per cent – a fraction of the massive 32.3 per cent drop in its horror first quarter.

    In the first nine months of the current year, system wide sales have decreased by 70.1 billion yen (US$568 million) to 273.9 billion yen ($2.221 billion).

    While sales and profit have declined significantly, the company said the BRP is progressing “broadly in accordance with schedule, and the business is on the path to recovery”.

    On October 26, McDonald’s Japan launched ‘Otegoro Mac’, part of a “Shin Otegoro Sengen” initiative designed to provide better, more consistent every day value for money. The company says that has been well received by customers to date.

    “We will continue to focus on ensuring food quality while making additional progress on our modernisation plan, delivering customer visible points of change, accelerating business recovery, and achieving long-term growth.

    “We are committed to providing customers the best possible dining experience by delivering the highest possible level of quality, service and cleanliness, with an unwavering focus on

    building stronger relationships in local communities.”

    McDonald’s Japan’s new vision is of “becoming a modern burger restaurant that connects with our customers”.

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  • Nike Japan reopens Kichijoji store

    Nike Japan reopens Kichijoji store

    A new Nike Japan running concept store adjacent to Inokashira Park is a hub for runners in suburban Tokyo.

    Located 20 minutes from Tokyo suburbs Shibuya and Shinjuku, Kichijoji is a suburb of well heeled consumers and home to Inokashira Park, opened in 1918 and now among the city’s top running destinations.

    Nike Japan reopens Kichijoji store 1

    The newly remodelled two story, 502 sqm Nike Kichijoji store blends Nike’s sport DNA with graphics from local artist Shun Sasaki, whose work pays respect to the area’s artistic traditions.

    “We are extremely excited that Nike Kichijoji is our first running experience store in Tokyo,” says Heidi O’Neill, VP, GM of Nike Stores.

    “At Nike, we love to run. We want this store to be an invitation for Tokyo to come run with us.”

    Nike Japan reopens Kichijoji store 2

    The store exterior features a slatted wood screen inspired by traditional Japanese woodcraft, with an embedded Just Do It message. Digital signage brings local tones and patterns to the interior.

    Nike Japan reopens Kichijoji store 3

    Nike Kichijoji also offers a variety of services, including Personal Run Clinics, where runners receive one-on-one coaching on an in-store; treadmill; Personal Styling Services; bra-fitting for Nike+ members; and NikeiD.

    Additionally, the store hosts Nike+ Run Clubs each week, leveraging the store’s new community hub, where runners can pick up trial shoes, refill water bottles, grab a towel and store their gear.

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  • China’s QKL Stores’ sales decline

    China’s QKL Stores’ sales decline

    Nasdaq-listed Chinese supermarket chain QKL Stores says its revenue fell four per cent in the last quarter, its profit by 4.5 per cent.

    “Our third quarter results generally met our levels of expectation,” said Zhuangyi Wang, chairman and CEO.

    “The variety, value and freshness of our products continue to resonate with our customers driving sales higher. This store growth was also driven by in-store promotional events such as store anniversary celebrations.”

    But he said sales and profit were impacted by “a challenging environment” for retail businesses, mainly due to the rising costs and the emerging eCommerce channel.

    “However, we are still confident on the domestic needs because of the urbanisation of the third and fourth tier cities that we will achieve a fundamental improvement in the consumer purchasing power during the process.”

    Third quarter revenue totalled $58.6 million, down from $61.1 million in the same quarter last year. Gross profit was $9.8 million, down from $10.3 million.

    “We look forward to the upcoming holiday season as we have a number of exciting marketing initiatives planned,” said Wang.

    “Our balance sheet is healthy with a strong cash position, low level of debt and stable flow of cash from operations. We continue to make progress with our store operations and that can result in greater sales and profits over time.”

    Based in Daqing, China, QKL Stores is a regional supermarket chain company operating in Northeastern China and Inner Mongolia. It operates 45 supermarkets, hypermarkets and department stores – two less than at the same time last year.

  • Spar Indonesia plans 55 stores by 2018

    Spar Indonesia plans 55 stores by 2018

    Spar Indonesia launched in March with just three stores – but the local partner expects to end 2015 with 15 operating.

    Another 40 stores will join the network by 2018 according to the Dutch retailer’s master franchisee PT Ramayana Lestari Sentosa.

    The partnership agreement between Ramayana and Spar was signed in September 2014 and the two companies wasted little time bringing the brand to the Southeast Asian nation.

    Besides rolling out the Spar supermarkets, RLS plans to open several new department stores under the Ramayana brand in Jakarta and East Java next year. It has budgeted US$29.41 million for store openings.

    RLS will also open Spars in Makassar town in South Sulawesi, Padang in West Sumatera, Balikpapan and Samarinda in East Kalimantan.

    Part of the rollout involves rebranding and reconfiguring existing Robinson department stores into Spars.

    Spar Asia has already established a network of more than 250 large format stores in China and is in the early stages of a new foray into India.

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  • Singaporeans love to shop overseas

    Singaporeans love to shop overseas

    Never mind that Singapore is renowned globally as a shopping destination.

    Singaporeans want to shop elsewhere.

    A survey by insurance company AIG conducted back in April found 36 per cent of the 1205 polled go on holiday solely to shop.

    When they take a holiday for retail therapy, Singaporeans spend an average of S$336 a day.

    The three most popular overseas shopping destinations are Bangkok, Hong Kong and Taiwan.

    AIG says it had received 7500 insurance claims between November 2014 and October 2015 for baggage lost on trips home from – in order – Thailand, Taiwan and Hong Kong.

    The insurer says people should keep receipts or photographs of their overseas purchases to ensure a smooth claims process.

    Other reasons for non-business travel by Singaporeans rated far lower than retail therapy, including a weekend getaway (21 per cent), to see somewhere exotic (12 per cent) or to indulge in a luxury break (four per cent).

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