Tag: Investment

  • From bikes to phones, ‘Made in Vietnam’ grows with foreign help

    From bikes to phones, ‘Made in Vietnam’ grows with foreign help

    Vietnamese companies are branching out into new areas, in line with the government’s goal of establishing the country as a manufacturing powerhouse by 2020. Real estate conglomerate Vingroup has started manufacturing electric motorbikes and smartphones and is set to enter the car industry in June. VinFast, a Vingroup unit, began selling its first electric motorbike in November. Designed in the mold of Italy’s Vespa, the Klara is a stylish, well-manufactured bike that can cover up to 80 km on one charge.

    Klara, like many other domestically made products, however, remains heavily dependent on foreign parts and technologies. While the collaboration with companies such as BMW, Robert Bosch and Siemens enabled Vingroup to bring the Klara to the market in just over a year after announcing plans to expand into motor vehicles, it reflects the long path the country has to travel before becoming a full-fledged industrial power.

    A group of 20 European businesses are helping Vingroup produce the bike, and around 200 German engineers are currently working at Vingroup’s plant in the northern city of Haiphong. Klara offers a glimpse into the type of outside assistance that will go into building the country’s first national car, which the company plans to launch in June.

    Some of the company’s cars will be based on a small vehicle produced by Germany’s Opel and use chassis provided by Western makers, according to local media. An Italian design studio that has worked for Ferrari and other European marques is in charge of designing VinFast cars.

    Most of the parts have to be imported, as the country lacks a developed car manufacturing supply chain.

    Vingroup’s foray into the smartphone market is also supported heavily by foreign manufacturers.

    The conglomerate has teamed up with Spanish maker BQ to launch its Vsmart model, and its smartphone plant has started operation, also in Haiphong.

    Vingroup has enlisted the help of Qualcomm and Google for its smartphone business.

    Vietnam’s first domestically made smartphone, the Bphone, was launched in 2015 by software developer Bkav and was also largely made up of components supplied by foreign makers. Its liquid crystal display, for instance, came from Sharp and its chips from Qualcomm.

    In October, Bkav put the third-generation model of the Bphone on the market.

    Truong Hai Automobile, also known as Thaco, a contract manufacturer for Mazda Motor and Kia Motors, started selling Vietnamese-made agricultural machinery in 2018. The company, which has entered a technological tie-up with South Korea’s LS Mtron, reportedly makes equipment mostly with imported parts.

    The government is seeking to develop a cycle of domestic manufacturing, hoping that sales of locally made products will help its industries climb up the technology ladder and create employment.

    It is understood that a variety of tax and other incentives are being extended to Vingroup and other companies that are cooperating with state efforts to promote domestic production.

    Some analysts, however, have questioned the sustainability of this approach.

    “What Vietnam needs to do is to accelerate technology transfers to small and midsized companies for long-term development, instead of providing special incentives to specific large companies,” said a Hanoi-based Japanese consultant.

    In addition, the “Made-in-Vietnam” label has yet to win over consumers, according to Cao Thi Khanh Nguyet at the Asia Pacific Institute of Research, and manufacturers need a well-designed brand strategy to establish a solid presence in the market.

    Samsung Electronics, which operates two massive manufacturing plants in the country, controls 40% of its smartphone market. Many consumers also opt for Japanese, Thai and South Korean products when it comes to food and daily goods.

    Manufacturers in emerging markets often look to foreign powerhouses for support in accelerating their growth and evolution.

    Generally, industries begin the shift toward domestic production after they have acquired sufficient expertise and built up a dependable network of domestic suppliers.

    Some analysts say that Vietnam’s push to establish full-fledged domestic production by 2020 is too ambitious. But the blueprint has been in place for years.

    The 2020 target was first proposed at the ruling Communist Party’s National Congress in 1996. Two decades later, in 2016, the party reiterated its pledge to make the country a modern industrialized nation, despite widespread expectations that the plan would be abandoned.

    Vingroup chose Sept. 2, 2017 to announce its entry into automotives. It was no coincidence, falling on National Day, when the Vietnamese commemorate Ho Chi Minh’s 1945 declaration of independence.

  • Foreign buying on Bursa slows to RM146.8m last week

    Foreign buying on Bursa slows to RM146.8m last week

    Foreign funds snapped up RM146.8 million net of local equities last week during the holiday-shortened week. “Foreign funds resumed their entry into stocks listed on Bursa for the fourth consecutive week albeit at a slower pace compared to the preceding week,“ MIDF Research said in its weekly fund flow report.

    It said last Monday saw a moderate net inflow of foreign funds worth RM37.3 million, extending the daily buying streak to nine days. However, this foreign buying spree came to an end on the next day as international funds sold RM12.8 million net, coinciding with the local bourse’s 0.4% slide to settle at 1,690 points.

    Risk appetite was weak on Tuesday following the overnight 2.8% slump in Brent crude oil price combined with the anticipation ahead of the Sino-US trade negotiations.

    Notwithstanding this, offshore investors returned to Bursa on Wednesday at a tune of RM65.1 million net, the highest foreign net inflow during the week.

    The catalyst responsible for the boost of foreign net inflows on that day was 0.4% increase in Brent crude oil price as US President Donald Trump’s administration slaps sanctions on Venezuela’s state-owned oil company while Saudi Arabia had a deeper output cuts in January than initially pledged.

    The momentum of foreign net inflows continued on the last trading day of the week as foreign investors bought RM57.2 million net.

    “We opine that the sentiment was partially supported by the Malaysia’s exports in 2018 which grew by 6.7% to reach almost RM1 trillion. Meanwhile, the FBM KLCI was little changed, declining by less than 1% on Thursday ahead of the long weekend and festive season.”

    The month of January 2019 saw a foreign net inflow of RM1.03 billion or US$249.3 million, the first monthly net inflow since September last year.

    “In comparison with the three other Asean markets we monitor, Malaysia has the second lowest foreign net inflow while Indonesia leads,“ said MIDF.

    Foreign investors were the only group which saw a weekly increase in average daily traded value, jumping by 21.0% to remain above RM1 billion for the second week running.

  • Vietnamese travel agency intends to invest in sixth airline: CEO

    Vietnamese travel agency intends to invest in sixth airline: CEO

    Vietravel is nurturing a plan to launch its own airline to meet the demand that it predicts will keep rising in the future. The company’s CEO Nguyen Quoc Ky said the domestic aviation market is still “full of potential.” With a population of more than 100 million and the number of foreign visitors rising steadily year after year, hitting the highest ever at 15.5 million last year, it is still modest for Vietnam to have only five airlines, he said recently.

    Vietravel wants to have its airline headquartered in the central town of Hue, he added.

    “The plan of Vietravel will help create more new flight routes to and from Hue, and thus connect the city with more tourists,” said Nguyen Van Phuc, deputy director of Thua Thien – Hue Province, home to the imperial town of Hue.

    This will also get along with a plan to upgrade Phu Bai International Airport in Hue to raise its annual capacity from 1.5 million passengers to 5 million.

    Vietravel has taken the first steps into the airline industry through organizing charter flights with its partners.

    For the past two years, it has operated around 300 charter flights both domestically and internationally each year.

    Vietnam’s newest airline, Bamboo Airway, recently completed its maiden flight.

    The four other carriers currently in Vietnam are Vietnam Airlines, Vietjet Air, Jetstar Pacific, and VASCO.

    Together, the four of them transport more than 50 million passengers last year, up 14 percent against 2017, according to the Civil Aviation Authority of Vietnam.

    The number of passengers through Vietnam airports during the year increased 12.9 percent to 106 million passengers.

    is nurturing a plan to launch its own airline to meet the demand that it predicts will keep rising in the future. The company’s CEO Nguyen Quoc Ky said the domestic aviation market is still “full of potential.” With a population of more than 100 million and the number of foreign visitors rising steadily year after year, hitting the highest ever at 15.5 million last year, it is still modest for Vietnam to have only five airlines, he said recently.

    Vietravel wants to have its airline headquartered in the central town of Hue, he added.

    “The plan of Vietravel will help create more new flight routes to and from Hue, and thus connect the city with more tourists,” said Nguyen Van Phuc, deputy director of Thua Thien – Hue Province, home to the imperial town of Hue.

    This will also get along with a plan to upgrade Phu Bai International Airport in Hue to raise its annual capacity from 1.5 million passengers to 5 million.

    Vietravel has taken the first steps into the airline industry through organizing charter flights with its partners.

    For the past two years, it has operated around 300 charter flights both domestically and internationally each year.

    Vietnam’s newest airline, Bamboo Airway, recently completed its maiden flight.

    The four other carriers currently in Vietnam are Vietnam Airlines, Vietjet Air, Jetstar Pacific, and VASCO.

    Together, the four of them transport more than 50 million passengers last year, up 14 percent against 2017, according to the Civil Aviation Authority of Vietnam.

    The number of passengers through Vietnam airports during the year increased 12.9 percent to 106 million passengers.

  • Vietnam foreign investment skyrockets in January

    Vietnam foreign investment skyrockets in January

    FDI pledges for new projects, increased capital and stake acquisitions in Vietnam rose 51.9 percent year-on-year to $1.9 billion in January. In a statement Monday, the Ministry of Planning and Investment said the manufacturing sector attracted the most interest from foreign investors, accounting for $1.19 billion or 62.4 percent of the total FDI. Science and technology ranked second with $185.8 million, followed by real estate with $179.1 million.

    Japanese were the top investors with nearly $364 million. South Korea and China were next with $349.1 million and $307.8 million.

    Ho Chi Minh City is the most attractive location for FDI investors in January, accounting for around 39.1 percent of the total FDI. Southern Binh Duong Province ranked second, accounting for 12.5 percent, followed by northern Hai Duong Province with 6.5 percent.

    As of January 20 authorities had issued licenses for 226 new projects with a total capital of $805 million. Meanwhile, another $340.2 million was pledged for existing projects this month.

    The two biggest projects were Kyoshin Vietnam’s $134.7 million investment expansion in HCMC by Japanese investors to produce, process and export electrical components and molds, and Katolec Global Logistics Vietnam’s $65 million investment for warehousing and storing goods in the northern province of Ha Nam.

    Estimated FDI disbursement for the month was $1.55 billion, up 9.2 percent year-on-year.

    Vietnam reported FDI disbursement of $19.1 billion last year, up 9.1 percent.

  • Keppel to sell 70 pct stake in Vietnam waterfront township

    Keppel to sell 70 pct stake in Vietnam waterfront township

    Singapore-based Keppel Corp will sell 70 percent stake in a waterfront township project to a Vietnamese investor for $100 million. The company said in a release Monday that, pending certain developments, it will sell its stake in the Dong Nai Waterfront City Company (DNWC) to Ho Chi Minh City-based Nam Long Investment Corp for VND2.31 trillion ($99.72 million).

    The DNWC is a company incorporated under Vietnam’s laws that has been granted the right to develop the Dong Nai Waterfront City township project.

    Keppel Land, Keppel’s real estate arm, is currently in the process of taking over complete control of DNWC from an unnamed joint venture partner through a demerger.

    Once the demerger is done, DNWC will become a wholly-owned subsidiary of Keppel with the rights to develop a 170-hectare plot of land.

    DNWC also holds a 28-hectare plot of land which is excluded from the proposed divestment.

    The 70 percent stake sale will depend on demerger going through.

    Dong Nai Waterfront City is a 170-hectare residential township project in Dong Nai Province, located 28 kilometers to the northeast of HCMC.

    It will have about 7,850 homes, including townhouses, villas and high-rise apartments with various commercial facilities.

    Keppel Corp said that the stake sale was in line with Keppel Land’s strategy to recycle assets for higher returns. The funds generated will be used to pursue other opportunities in Vietnam, it said.

    The Dong Nai Waterfront City will be Keppel Land’s second township project in Vietnam after the 64-hectare Saigon Sports City in HCMC’s District 2 which is under construction.

  • Vietnam fintech startup raises $1 million from foreign venture capitalists

    Vietnam fintech startup raises $1 million from foreign venture capitalists

    Vietnamese fintech firm Finhay has raised $1 million in seed funding from Singapore’s Insignia Ventures Partners and other foreign investors. “Finhay will use the $1 million investment to expand its user base 10-fold to 100,000,” said founder and director of Finhay Nghiem Xuan Huy. Finhay was established in 2017 with capital of $100,000 as a micro-investment platform targeted at millennials. It allows customers to invest as little as VND50,000 ($2.17) in mutual funds from Finhay’s investment portfolio.

    Huy said the business model is very popular abroad, citing examples such as U.S. micro-investing apps Acorns and Stash.

    The application automatically analyzes the user’s risk appetite and suggests appropriate investment options and provides information to help improve users’ personal financial management.

    It has over 13,000 users and over VND7 billion ($303,590) worth of pooled capital.

    Insignia Ventures Partners, a venture fund which has already invested in popular transport apps Go-Jek and Traveloka of Indonesia, hopes “…[Finhay] will gradually layer on more products and services to become the Amazon of financial services in Vietnam.”

    Finhay also received seed capital from funds in Hong Kong and the U.S.

  • Korean firm to set up halal ramen plant in Malaysia

    Korean firm to set up halal ramen plant in Malaysia

    FGV Holdings Bhd is looking to partner with South Korea’s Samyang Foods Co Ltd for the establishment of Samyang Halal’s production facilities in Malaysia. FGV told Bursa Malaysia that it had signed a memorandum of understanding (MoU) with Samyang. The production facilities will focus on serving halal ramen and instant noodle products for Malaysia and global markets.

    FGV’s newly appointed CEO Datuk Haris Fadzilah Hassan said the collaboration is part of he group’s strategic direction to expand its downstream business by diversifying the product offerings and penetrating into new markets.

    Its logistics and support businesses sector is also set to benefit from this partnership by providing a total logistics supply chain solution.

    “With this MoU, FGV hopes to explore the opportunity for both parties to establish a halal ramen and instant noodle manufacturing plant in Malaysia. The global halal food market is one of the fastest growing segments in the food industry and is expected to reach more than US$740 billion in value by 2025,” Haris said.

    FGV said the collaboration will also give FGV access to Samyang’s supply chain, which includes cooking oil, vegetable fats and sugar for its existing ramen plant in Wonju, South Korea.

    Samyang is listed on the Korean Stock Exchange with a market capitalisation of KRW459.514 billion (RM1.68 billion). It is in the business of manufacturing and selling various food products such as ramen, snacks, dairy products, sauces, and frozen dumplings.

    FGV noted that its downstream entity Delima Oil Products Sdn Bhd (DOP) can leverage on Samyang’s strong R&D and global distribution networks to improve quality and expand the reach of its “Saji” products regionally and globally.

    “In addition, DOP will benefit from Samyang’s ver 50 years’ experience in the ramen and instant noodle industry to strengthen its own products and brand positioning.”

  • Pizza Hut India betting big on delivery in 2019

    Pizza Hut India betting big on delivery in 2019

    Pizza Hut India has announced that the company will focus on delivery as a key driver of business growth in 2019 and introduce various initiatives to further enhance the delivery experience for consumers. Coherent with this aim, the brand has launched a rider tracking feature across its digital ordering platforms – mobile-site, mobile app and desktop site. The feature is available across all cities where Pizza Hut has delivery services.

    The rider tracking feature has been launched by Pizza Hut as a solution based on key behavioral findings of the brand’s large consumer base, majority of whom are tech-savvy, on-the-go millennials. The findings have shown that consumers choose brands which adapt to their lifestyle, understand their preferences and enable them to take charge. Also, with changing consumer habits, pizzas have evolved from being a special occasion treat to becoming a part of everyday food consumption in India. Therefore, hassle-free and seamless food ordering and delivery experience has become a vital deciding factor, apart from taste and quality. Rider-tracking is an enabler of the convenience that consumers are seeking, further bolstered by value offers.

    Commenting on the launch of the feature, Prashant Gaur, Chief Brand and Customer Officer, Pizza Hut India Subcontinent said, “At Pizza Hut, we take a lot of pride in serving the freshest and the tastiest pizzas to all the pizza lovers in the country. Apart from great taste, elevating the overall experience across every consumer touchpoint is our biggest focus, and we are implementing this strategy through initiatives like rider tracking feature and value offers. We are confident that these initiatives will further enable us to stay relevant and blend even more seamlessly into the daily lives of our consumers.”

    The upscaling of the delivery channel comes at a time when Pizza Hut India Subcontinent has achieved strong business results with 10 successive quarters of positive Same Store Sales Growth. The brand has been steadily expanding its physical store footprint and launched its 500th physical store in the Indian Subcontinent. Pizza Hut also pioneered the Fast-Casual Delco (FCD) concept in India, which offers a seamless integration of dine-in, takeaway and delivery channels, all under one roof. The company recently upgraded all its digi-tech assets including the website, m-site and mobile app. These initiatives have enabled Pizza Hut to deliver on the promise of providing the easiest, fastest and the tastiest pizza experience to consumers in India. As a result, Pizza Hut has been voted the most trusted brand in India for the 12th time in a row (as per a reputed media house) and was awarded the prestigious EFFIE Gold in the Foods and Confectionery category in 2018 for its outstanding consumer-centric performance.

  • Lotte to pursue reforms and investment in 2019

    Lotte to pursue reforms and investment in 2019

    Lotte Group Chairman Shin Dong-bin told affiliate CEOs that he wants reform and aggressive investment in 2019 during a biannual meeting on Wednesday. Shin missed the last meeting in July as he was serving time in prison for bribery related to former President Park Geun-hye. The first meeting of the year typically deals with each affiliate’s annual goals and direction.

    In the first meeting with CEOs after his return, the chairman emphasized that the company was in need of innovation strong enough to rattle its existing business structure.

    “We are about to face immense change in the future that is difficult to imagine,” he stressed to affiliate heads at the meeting. “Therefore we have to be thorough in predicting the future and devising preparations according to different scenarios. If we can’t come up with a clear vision or concrete plans, there will be an immense crisis.”

    Shin pointed out that the group had been “passive” recently when it comes to making investment decisions, missing opportunities and waiting for too long.

    He added that investment decisions have to be made continuously, even when revenue is low and in businesses that the company is doing well in so as to maintain an upper hand in the market.

    He also mentioned the possibility of downsizing unprofitable businesses, citing Microsoft becoming global No. 1 by market cap last year after conducting reforms on its business portfolio.

    “We should focus on areas with future growth potential and push for rationalization,” said Shin.

    Digital transformation, an initiative he has been pushing for in the last few years, also reappeared in Wednesday’s speech.

    “Compared to global companies, Lotte has a low investment rate in the IT sector and the fields invested in so far are [relatively] narrow,” he said, urging that the company needs to find ways to get one step closer to customers using existing assets like big data, brick-and-mortar stores and logistics infrastructure.

    Recently recruited IT professionals were also called into the meeting to share their opinions on Lotte’s current situation regarding digitalization and areas that can be improved.

  • CIMB get permission for banking venture with Philippines

    CIMB get permission for banking venture with Philippines

    CIMB Group Holdings Bhd has obtained the green light to establish its investment banking business in the Philippines. In a filing with Bursa Malaysia, the group said its wholly owned subsidiary CIMB Group Sdn Bhd had on Jan 23 received the relevant approvals from the Securities and Exchange Commission of the Philippines, including the Certificate of Incorporation and Certificate of Registration for an investment house licence.

    The investment banking business in the Philippines will be operated via a 60% shareholding in CIMB Bancom Capital Corporation with the remaining 40% stake to be held by local partners Bancom II Consultants, Inc and PLP Group Holdings, Inc.

    The three parties have entered into a joint venture agreement following the receipt of the approvals.

    CIMB shares went down 1 sen or 0.2% to close at RM5.65 today on 13.4 million shares done.

  • Indian retail drew Rs 1,300 crore investment in 2018

    Indian retail drew Rs 1,300 crore investment in 2018

    The hallmark of a market’s increasing maturity is how organized it is – and in any developing country, the state of ‘organized’ business is usually kick-started by the entry of foreign players who bring in structured deployment and business philosophies wherever they go. This philosophy of organized retail players covers a lot of ground, from the aptness of locations to size and visibility of a mall or high street, from store sizes to layouts, tech enablements and promotion parameters, and from pricing to financial accountability. The arrival of foreign brands forces domestic brands to up their game, as well. This is exactly what is happening in Indian retail, and what ‘getting organized’ is all about.

    By definition, organized retailing essentially refers to any trading activity conducted by licensed retailers from modern retail formats such as hypermarkets, supermarkets or departmental stores. Organized retail formats can exist either as stand-alone shops or occupy space in a mall. Unorganized retailing, which is what all developing nations start out with, are usually family-run neighbourhood shops (referred as ‘kirana’ shops in India) and in open markets.

    Bringing organized flavour into a previously disorganized market first disruption, then gradual acceptance and emulation, and finally prosperity to all stakeholders and immeasurable benefits to customers. Getting organized has certainly benefited Indian retail, causing massive growth spurts.

    Growth of Organized Retail

    From a mere 9 percent share in 2017, the organized retail market in India is gearing up for a significant 20-25 percent growth jump across the top 7 cities. By 2020, organized retail will have captured approximately 19 percent of overall market share. The fact that it accounted for only 4 percent just 10 years ago tells its own story. Indian retail is coming of age.

    The growth of organized retail obviously involves organized retail real estate – especially modern, well-researched and fully-equipped malls in the right locations – and organized mall space is definitely proliferating across India.

    As per ANAROCK data:

    – Around 39 mn sq. ft. of organized retail space is slated to hit the market between 2019-2022
    – Out of this supply, approximately 71 percent is in metros and Tier 1 cities and the remaining 29 percent in Tier 2 & 3 cities

    Ahmedabad, Bhubaneshwar, Ranchi, Kochi, Lucknow, Surat and Amritsar, among others, are the new stages where the next chapters of the Indian organized retail saga will play out. Global retailers are now also eyeing cities like Chandigarh, Lucknow and Jaipur, to name a few.

    As they catch this growth wave, mall developers and big-banner brands have grasped the utmost importance of providing a metropolitan-grade shopping experience to customers in these smaller cities. This is hardly surprising.

    In these cities, customers’ shopping options were previously limited to whatever was available locally. Today, they are being aggressively wooed by hyper-capitalized e-commerce giants who sensed the latent opportunity in Tier 2 and Tier 3 long before brick-and-mortar retail did.

    To counter this onslaught, albeit belatedly, retailers whose business model is largely based on physical retail are prevailing on mall developers to build metro-grade shopping centres in areas they had never considered before.

    Policy Impetus Fuels Growth

    Foreign retailers, to whom India owes most of its turbo-charged growth in organized retail, took their time to view India as worthy of their attention. For the longest time, this country was an unattractive destination for them, largely because of regressive Government policies.

    All this changed when the Government decided to give a major impetus to the retail industry. By liberalizing its hitherto restrictive FDI policies, it repositioned Indian retail and finally put it on the global map. Consequently, global retailers and foreign investments made a beeline for the Indian retail industry. The decision to allow 51 percent FDI in multi-brand retail and 100 percent FDI in single-brand retail under the automatic route has caused global retail giants like Walmart and IKEA to foray into India.

    Thereafter, the rebooted regulatory environment post DeMo, RERA and GST implementation put even more wind into organized retail’s sails and allowed organized players to race ahead of the unorganized sector.

    Investments Surge

    The Indian retail sector has attracted cumulative investments of more than Rs 5,500 crore between 2015-2018, and close to Rs 1,300 crore in 2018 alone. This made 2018 one of the best years ever for the Indian retail sector, and the momentum is eminently sustainable. The increasing involvement of foreign and private players in India’s retail infrastructure indicates long-term growth potential for organized retail in the country.

    The growth of organized retail is also evident in the stock prices of listed retail firms, which were major wealth generators for investors in 2018. If we check the performance of these stocks on the basis of their 52-weeks high and low, some very interesting data emerges:

    Untapped Potential

    The fact that despite this growth, 91% of India’s retail market still remains unorganised underscores the huge latent potential that remains to be explored by organised players. Despite the deliriously positive numbers, organized retail in India is nowhere close to the level in more developed countries. For instance, in the US, 85 percent of the overall retail market is organized.

    Advantage Brick-and-mortar in 2019?

    The most recent policy developments will give physical organized retail a leg up in its fierce battle with e-commerce. The Government is pushing a new e-commerce policy from February 2019 wherein the concept of ‘exclusivity’ will no longer hold good. This means that online retail players will scramble to grab a larger pie of the offline market, so physical stores will get the upper hand.

    2019 will hopefully be the year in which the Government embarks on the next stage of ushering more unorganized retail into organized formats – thereby making Indian retail a worthy contender as a global grade market.

  • Sears saved by chairman’s last minute $5.2 billion bid

    Sears saved by chairman’s last minute $5.2 billion bid

    Bankrupt US retailer Sears has been saved from liquidation following a successful, last-minute US$5.2 billion bid by chairman Eddie Lampert, subject to court approval. The acquisition includes substantially all of the company’s assets as an on-going concern and preserves the positions of 45,000 employees.

    “We are pleased to have reached a deal that would provide a path for Sears to emerge from the chapter 11 process,” Sears’ restructuring committee of the board of directors wrote in a release to investors.

    “Importantly, the consummation of the transaction would preserve the employment for tens of thousands of associates, as well as the relationships with many vendors and suppliers who provide Sears with goods and services.”

    Provided the sale is approved by the Bankruptcy Court, the transaction is expected to close on February 8, 2019.

    The retailer had previously announced plans to close up to 120 stores, though it is not clear whether these closures will go forward with the successful bid.

    Lampert made the last-minute bid after several prior offers were turned down for being “administratively insolvent” – unable to cover fees and vendor payments owed by the retailer.

    After initially offering US$4.4 billion to purchase the business, as well as a secondary offer to purchase just 250 of its locations, Lampert was forced to raise his bid to US$5 billion in an effort to get the sale completed.

    But even this bid was deemed insufficient, and Lampert, through bidding vehicle ESL Investments, upped the offer to US$5.2 billion.

    The new bid, while successful, will mean roughly 5000 fewer staff able to keep their jobs as a result of the bankruptcy.

    Sears applied for bankruptcy in October 2018, citing a failing turnaround effort to transform the business and unlock the value of its assets.

    GlobalData Retail managing director Neil Saunders pointed to Sears’ efforts to “shrink its way to profitability”, and that continuing to do so under the guise of bankruptcy was unlikely to result in a successful outcome for the business.

    “Ultimately, Sears needs not just to fix its financial problems,” Saunders said.

    “It also needs to repair the deficiencies in terms of retail strategy… only a complete change of management will bring this about.”

  • Jack Wills bags cash injection to save the business

    Jack Wills bags cash injection to save the business

    Creditors of fashion label Jack Wills under HSBC have ordered an assessment of the firm’s finances, according to a report. The news comes just weeks after Jack Wills achieved new investment of £10 million (US$12.8 million), followed by speculation that the company may soon need further financial help – prompting the appointment of advisers from auditing firm EY.

    The new investment reportedly comes from an unnamed wealthy Italian family, which has previously invested in Jack Wills’ majority shareholder, BlueGem Capital Partners. BlueGem itself is thought to have provided a similar injection of cash. The identity of the investor is likely to be revealed following reports expected to be filed at Companies House.

    Brand co-founder Peter Williams was ejected from the firm’s board last year, with new executives brought in to effect a turnaround.

    Jack Wills operates more than 90 stores worldwide, including five stores in Hong Kong and two in Singapore.

  • Investment in Vietnamese startups triples in 2018

    Investment in Vietnamese startups rose to $889 million in 2018, three times that of 2017. According to a report recently released by Topica Founder Institute (TFI), a startup accelerator program in Vietnam and Thailand run by Hanoi-headquartered multinational educational technology company Topica, 92 investment deals totalling $889 million were struck in 2018.

    Domestic funds invested over $500 million, over half of total investments in startups, director of TFI Mai Duy Quang said. “This means that domestic funds are paying more attention [to Vietnamese startups], and that there is an abundance of domestic capital available for startups right now.”

    Of these, the top 10 investments alone totaled $734 million, accounting for 83 percent of the total value of all investments in startups. The three biggest deals were made by Vietnamese multichannel media giant Yeah1 ($100 million), e-commerce company Sendo ($51 million) and tech education company Topica ($50 million).

    The five most profitable fields for startups were fintech, e-commerce, traveltech, logistics and edtech. Fintech returned to the top spot in investment volume in 2018 with 8 deals totaling $117 million.

    In second place was e-commerce, which saw just 5 deals worth around $104 million, down from 21 deals in 2017. Traveltech (technology services related to tourism) was an unexpected third, with 8 deals worth $64 million by online hotel booking service Vntrip, homestay platform Luxstay, cheap flight booker Atadi, and business to business travel network Vleisure.

    Logistics and edtech fields respectively attracted 3 and 4 deals worth a combined $50 million.

    “Vietnam is a vibrant startup market full of potential for breakthroughs if proper investments are made,” said Yinglan Tan, founder of Insignia Venture Partners.

    According to the TFI report, startups struck 92 investment deals in 2017, too, but the total investment capital was just $291 million.

  • LVMH invests into Gabriela Hearst

    LVMH invests into Gabriela Hearst

    LVMH Luxury Ventures, an investment arm of the multinational conglomerate, has taken a minority stake in New York-based luxury label Gabriela Hearst. The terms of the deal were not disclosed, although LVMH Luxury Ventures typically invests between €2 and €15 million.

    Hearst, who ran contemporary-priced label Candela for more than a decade before launching her upscale luxury offering in 2015, has briskly built a ready-to-wear business based on sharply tailored silhouettes rendered in ultra-expensive fabrics, with a focus on sustainably sourced materials. In 2018, just three years after she launched her label, the collection — which also includes a robust handbag business, mostly sold direct-to-consumer — generated between $15 and $20 million, according to sources familiar with the business.

    Launched in 2017, LVMH Luxury Ventures is an investment vehicle within the LVMH group that aims to invest in emerging labels that have already shown an ability to scale.

    Investments have included French apothecary brand Officine Universelle Buly and sneaker resale shop Stadium Goods, which was subsequently acquired by Farfetch for $250 million in December 2018.