Apple poised for strong earnings despite supply constraints, Omicron

Apple Inc navigated pandemic-related supply chain issues better than rivals at the end of 2021, likely helping the iPhone maker surpass Wall Street revenue growth targets of 6 percent, some analysts estimate.

Apple, which is set to post quarterly earnings on Thursday, was buoyed by strong iPhone 13 sales globally, sales in China and continued growth in Mac shipments, several analysts told Reuters.

The market is closely watching earnings at Apple, Tesla and other tech companies to see if they quell the sell-off that has wiped out nearly $3 trillion in value from the Nasdaq 100. Investors are dumping tech stocks on fears that the Fed will hike interest rates fairly aggressively and erode the value of their future earnings. Some are concerned that the surge of pandemic at-home tech buying will not last as conditions improve.

"We expect Apple to reach its highest market share in China since Apple entered the market in 2008," said analyst Nicole Peng of Canalys.

Investment firm Wedbush Securities forecasts record iPhone sales of more than 40 million units during the holiday period from Black Friday to Christmas. Morgan Stanley estimates total holiday quarter iPhone shipments at 83 million, representing a 4 percent increase from the previous year.

Wall Street analysts expect Apple to post about $118.7 billion in revenue, representing 6.48 percent year-over-year growth, and quarterly earnings per share of $1.89, according to Eikon data as of Tuesday.

Apple posted a rare revenue miss in the fiscal quarter ended Sept. 25, which Chief Executive Tim Cook attributed to pandemic-related supply constraints and manufacturing disruptions that together cost the company an estimated $6 billion in sales.

Cook at the time forecast an even bigger drag in the holiday quarter, but analysts expect strong growth compared to competitors in the just-ended quarter, which began days after Apple started shipping the iPhone 13.

"Since Apple has many customized components going into the iPhones, Macs, Apple Watch and others and the scale (volume and price) at which it procures, Apple has been able to lock-in suppliers’ capacities to timely produce those parts with lesser delays," said Neil Shah of Counterpoint Research.

Shah added that Apple is seeing the highest demand for iPhones since the 2015 "supercycle."

Smaller rivals are struggling to keep up with production, leading to Apple market share gains in regions such as China, said Angelo Zino of CFRA Research in a research note.

Apple has said it expects iPads to be its only product with lower sales compared with a year ago due to supply constraints. Analysts say Apple likely prioritized iPhone units for components.

Preliminary holiday quarter data from IDC indicates almost 9 percent growth in Mac shipments, compared with a 1 percent rise in the PC market as a whole. 

Analysts played down concerns about the impacts of the Omicron variant surge, saying closings of some retail stores did not likely have a big impact on Apple's online-heavy business. Analysts also are watching for signs that rising Omicron cases in China could impact Apple's production.

Apple, the first company worth $3 trillion, has been losing value along with the broader stock market. Apple stock has fallen 10 percent this month and the S&P 500 index has dropped 9 percent.

Analysts may also ask Apple management about App Store payment rules, after regulators in the Netherlands found that the US company had abused its market dominance by requiring dating app developers to exclusively use Apple's in-app payment system.

-reuters-

Apple closes all New York City stores amid rising COVID-19 cases

Apple Inc said on it had closed all of its 7 New York City retail stores due to an increase in COVID-19 cases as the Omicron variant rages across the United States.

Customers will be able to pick up online orders at the stores, an Apple spokesperson said.

The closed stores include outlets at Fifth Avenue, Grand Central and SoHo.

Earlier this month, Apple said it had temporarily closed three stores in the United States and Canada after a rise in COVID-19 cases and exposures among the stores' employees.

For the same reason, Apple also mandated that all its customers and employees wear masks at its US retail stores.

Globally, concerns over the Omicron variant have prompted major companies to tighten their protocols.

Increasing cases has also resulted in reinstatement of a nationwide vaccine-or-testing COVID-19 mandate for large businesses which covers 80 million American workers by a U.S. appeals court earlier this month. Opponents of the move have rushed to the Supreme Court to ask it to intervene.

-reuters- 

Europe charges Amazon with using dominance and data to squeeze rivals

BRUSSELS - The European Union charged Amazon with damaging retail competition, alleging on Tuesday that the US company uses its size, power and data to gain an unfair advantage over smaller merchants that sell on its online platform.

The move by competition chief Margrethe Vestager, the latest European salvo against US tech giants, comes at a time when the COVID-19 pandemic has amplified Amazon's role in the global economy, with online sales soaring in lockdowns.

The European Commission has been investigating Amazon's position as both a marketplace for merchants and a rival seller, while the firm also faces scrutiny in the United States over its alleged mistreatment of sellers, as well as its dual role.

The EU regulator looked into how Amazon collects data on competitors that sell on its platform, offering everything from electronics and toys to food and kitchenware. It says that Amazon uses that sensitive information, which shows what is proving popular or not, to better target its own products.

"The use of these data allows Amazon to focus on the sale of the best-selling products and it marginalizes third-party sellers and caps their ability to grow," European Competition Commissioner Vestager told a news conference.

Vestager, who has a reputation of being one of the world's toughest antitrust enforcers, said that regulators had to ensure that dual-role platforms with market power, such as Amazon, did not distort competition. Amazon disagreed with the EU assertions. "Amazon represents less than 1% of the global retail market, and there are larger retailers in every country in which we operate," the company said.

A US Congressional antitrust report earlier this year into the alleged abuse of market power by Amazon also raised the concerns highlighted by the EU and is likely to influence the case US regulators bring against the company.

US Representative David Cicilline, a Democrat and the top antitrust lawmaker in the House, applauded the EU and urged the US Federal Trade Commision to take similar action.

"As we found as part of a 16-month bipartisan investigation, Amazon has monopoly power over sellers on its platform," Cicilline said.

The EU charges are the latest example of how watchdogs around the world, led by Europe, are grappling with the challenges of regulating Big Tech, companies that have achieved dominance in their fields and vast troves of user data.

On Vestager's watch, the EU has imposed large fines on Alphabet's Google and other companies. See FACTBOX:

A final EU decision could come next year. Amazon faces being fined up to 10% of its global turnover if found guilty of breaching antitrust rules. However it can avoid a hefty penalty and a finding of wrongdoing by offering concessions to settle.

NEW INVESTIGATION

The EU competition enforcer has been investigating Amazon since July last year after rival traders voiced their grievances. The regulator said the charges related to Amazon's activities in France and Germany, its two biggest markets in Europe and where it is the dominant player.

The case focuses on its use of merchant data on its platform. Vestager said her officials had trawled 80 million transactions and reviewed 100 million products on Amazon's platform to put the case together.

The European Commission also opened a new investigation into Amazon on Tuesday, over the possible preferential treatment of its own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services.

That probe will look into the possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services.

Regulators will investigate the criteria the company uses to select winners of its "buy box", which allows customers to add items from a specific retailer directly into their shopping carts.

"Its rules should not artificially favor Amazon's own retail offers or advantage the offers of retailers using Amazon's logistics and delivery services," Vestager said, citing the importance of e-commerce, an area which has gained importance with the COVID-19 pandemic.

-reuters-

Lord & Taylor, Men’s Wearhouse owner file for bankruptcy

NEW YORK (AP) — Lord & Taylor, one of America’s oldest department stores, has filed for bankruptcy, joining a growing list of stores slammed by the coronavirus pandemic. Tailored Brands, the parent company of Men’s Wearhouse and Jos. A. Banks, filed for bankruptcy as well.

Many of the companies that have filed for Chapter 11 in recent weeks were already struggling, but the forced closure of non-essential stores in March pushed them to the brink.

Lord & Taylor, which was sold to the French rental clothing company Le Tote Inc. last year, filed Sunday for bankruptcy protection in the Eastern Court of Virginia.

In an announcement on its website the company, one of the oldest American department stores, said it was looking for a new owner.

Like many retailers, Lord & Taylor was already struggling with the shift to online shopping even before the pandemic struck this spring. Last year, it sold its flagship building on New York’s Fifth Avenue after more than a century in the 11-story building.

The company was founded as a dry goods store in 1826. There are several dozen Lord & Taylor stores across the country.

Tailored Brands, which filed for Chapter 11 Sunday in the Southern District of Texas, said it would continue to operate Men’s Wearhouse and Jos. A. Banks stores, along with K&G Fashion Superstore and Moores Clothing for Men, which it also owns. It said in a release that a restructuring plan is expected to reduce the company’s funded debt by at least $630 million and provide increased financial flexibility.

As many people have switched to working at home, brands that sell clothes targeted at offices workers have had a particularly hard time. Brooks Brothers and the parent company of Ann Taylor are among those that have also filed for bankruptcy.

As of July 23, roughly 40 retailers, including big and small companies, had filed for Chapter 11 bankruptcy so far this year. That exceeds the number of retail bankruptcies for all of last year. About two dozen of them have sought bankruptcy protection since the pandemic started.

Others include J. Crew, J.C. Penney, Neiman Marcus, Stage Stores, and Ascena Retail Group, which owns Lane Bryant in addition to Ann Taylor.

Associated Press

UK retail readies for coronavirus lockdown easing with new guidance

LONDON - The British retail industry's lobby group and its main trade union on Sunday issued new guidance to retailers in preparation for an anticipated easing by the government of the country's coronavirus lockdown and the re-opening of more stores.

The social distancing guidance for non-food retail stores from the British Retail Consortium (BRC) and Usdaw union draws on government advice as well as lessons learned by the retailers deemed essential and allowed to stay open during the lockdown, in place since March 23, such as supermarkets and pharmacies.

The guidance includes providing hand sanitizer for customers, encouraging shoppers to visit stores alone, limiting numbers in shops at any one time, keeping customers 2 meters apart, installing protective screens at tills, stepping-up cleaning and encouraging cashless payments.

"We need to be ready and we need to make sure that the proper preparations and measures are put in place," said Usdaw general secretary Paddy Lillis.

The government said on Friday it was too early to lift the lockdown, though economic data indicates Britain's economy is crumbling under the strain.

British retail sales fell by the most on record in March as a surge in food buying for the lockdown was dwarfed by a plunge in sales of clothing and most other goods, and the slump is likely to be even worse in April.

"Continued close collaboration with government, including public support for the steps retailers are taking and adequate notice to get supply chains up and running, will mean that retail businesses can start trading again slowly and safely, and customers can feel confident that they are safe to return to shops," said BRC chief executive Helen Dickinson. 

-reuters-

Google to make online shopping service free to merchants

SAN FRANCISCO - Google is opening its online shopping service to merchants free of charge as it competes with Amazon in precious e-commerce and digital ads.

Merchants in the US will be able to use Google Shopping for free to proffer their wares by the end of April, and the goal is to do the same for sellers around the world before the end of the year, according to commerce unit president Bill Ready.

Google Shopping had previously showcased only retailers who paid to promote products to consumers searching online for items.

"As consumers increasingly shop online, they're searching not just for essentials but also things like toys, apparel, and home goods," Ready said in a blog post.

"While this presents an opportunity for struggling businesses to reconnect with consumers, many cannot afford to do so at scale."

The closing of physical shops due to the pandemic has accelerated Google's plan to make it free for merchants to sell with its online commerce service, according to Ready.

Beginning next week, results for searches in the Google Shopping tab will be mostly free listings. Google will display paid ads on results pages as well.

"For advertisers, this means paid campaigns can now be augmented with free listings," Ready said.

Online retail colossus Amazon uses a similar formula, mixing sponsored product posts with offerings by merchants and has been making an increasing amount of revenue from digital ads in the process.

Google said it is working with PayPal to allow merchants to use the financial transactions service for sales on the Shopping platform, making it easier for potential vendors to join.

Online shopping has surged, with Amazon center stage, as people sheltering at home to avoid coronavirus risk have relied on e-commerce for groceries, medicine, household staples and more.

"Solutions during this crisis will not be fast or easy, but we hope to provide a measure of relief for businesses and lay the groundwork for a healthier retail ecosystem in the future," Ready said.

Agence France-Presse

Coronavirus delivers record blow to US retail sales in March

WASHINGTON - US retail sales suffered a record drop in March as mandatory business closures to control the spread of the novel coronavirus outbreak depressed demand for a range of goods, setting up consumer spending for its worst decline in decades.

The Commerce Department on Wednesday said retail sales plunged 8.7 percent in March, the biggest decline since the government started tracking the series in 1992, after falling by a revised 0.4 percent in February.

According to a Reuters survey of economists, retail sales were forecast to have fallen 8.0 percent last month.

The report came as millions of Americans are thrown out of work, and strengthen economists' conviction that the economy is in deep recession. States and local governments have issued "stay-at-home" or "shelter-in-place" orders affecting more than 90 percent of Americans to curb the spread of COVID-19, the respiratory illness caused by the virus, and abruptly stopping the country.

"The economy is almost in free fall," said Sung Won Sohn, a business economics professor at Loyola Marymount University in Los Angeles. "We will see the bottom when the coronavirus infection rates stabilize. It's going to be a pretty deep bottom from which to come up."

The drag on sales in most retail categories from social restrictions far outweighed a surge in receipts at online retailers like Amazon, and grocery stores and pharmacies as consumers stocked up on household essentials such as food, toilet paper, cleaning supplies and medication.

Consumer spending accounts for more than two-thirds of US economic activity. It grew at a 1.8 percent pace in the fourth quarter, with the overall economy expanding at a 2.1 percent rate over that period. Economists see no respite for consumer spending in the second quarter, with estimates as low as a 41 percent rate of decline, despite a historic $2.3 trillion fiscal package, which made provisions for cash payments to some families and boosted unemployment benefit checks.

"In general consumer spending is going to look about as bad as it has ever been, although there will be some categories of resilience," Tim Quinlan, a senior economist at Wells Fargo Securities in Charlotte, North Carolina. 

"The panic buying at grocery stores cannot offset the retrenchment in spending that we will see in other categories."

Economists believe the economy entered recession in March. The National Bureau of Economic Research, the private research institute regarded as the arbiter of US recessions, does not define a recession as two consecutive quarters of decline in real gross domestic product, as is the rule of thumb in many countries. Instead, it looks for a drop in activity, spread across the economy and lasting more than a few months. 

(Reporting by Lucia Mutikani Editing by Chizu Nomiyama)

-reuters-

Macy's closing 125 stores, cutting 2,000 jobs

WASHINGTON — Iconic American department store chain Macy's will shutter 125 stores and slash 2,000 jobs over the next three years as part of a plan to shore up its financial position, the company announced Tuesday.

Like other retailers, Macy's has struggled with the decline of the once-dominant American shopping mall, as well as competition from online behemoth Amazon.

The department store said it expects the "Polaris" strategy to generate annual gross savings of approximately $1.5 billion once it is fully implemented by the end of 2022, with savings of approximately $600 million this year.

"We are confident in our Polaris strategy, and we have the resources required to return Macy's, Inc. to sustainable, profitable growth," Macy's CEO and chairman Jeff Gennette said in a statement. 

"We will focus our resources on the healthy parts of our business, directly address the unhealthy parts of the business and explore new revenue streams."

The company will close approximately 125 of its "least productive" stores over the next three years, which account for $1.4 billion in annual sales. This includes 30 stores already in the process of closure, the statement said.

In addition, the New York office will become the company's sole corporate headquarters, and the chain will close its San Francisco and Cincinnati offices.

The plan calls for "streamlining its organization with a net reduction in its corporate and support function headcount of 9 percent, or approximately 2,000 positions," the company said.

The savings generated by the program will be invested in improving the digital business and "off-mall expansion," and new, smaller store formats, among other things.

The cost of the restructuring is expected to total approximately $450 million to $490 million, the majority of which will be recorded in 2019, the statement said.

Agence France-Presse 

Co-inventor of barcode dies aged 94

MIAMI - US engineer George J. Laurer, who co-invented the barcode and helped to transform the retail world in the 1970s, has died at age 94.

The former IBM employee's funeral was held Monday in his hometown of Wendell, North Carolina, according to a family obituary. He died at home last week.

Laurer is recognized as the co-inventor of the Universal Product Code (UPC), or barcode, which can be found on millions of products, services and other items for identification.

The marking -- made up of black bars of varying thickness and a 12-digit number -- can be scanned, quickly identifying the product and its price.

In 1969, Laurer rose to become senior IBM engineer and scientist in Raleigh, the capital of North Carolina, according to a tribute posted on the company's website.

"Only a few years later, in 1973, Laurer went on to spearhead the development of the now-ubiquitous Universal Product Code (UPC) symbol that revolutionized virtually every industry in the world," it said.

Fellow IBM employee Norman Woodland, who died in 2012, is considered the pioneer of the barcode idea, which he initially based on Morse code.

Woodland patented the concept in 1952 but was unable to develop it -- years before low-cost laser and computing technology.

Two decades later, Laurer developed a scanner that could read codes digitally. He also used stripes rather than circles that had proved impractical to print.

IBM launched the product in 1973, and the first barcode transaction took place on June 26 of the following year, in a supermarket in the city of Troy, Ohio.

The first product scanned was a pack of Wrigley's Juicy Fruit chewing gum, which is now on display at the Smithsonian National Museum of American History in Washington.

source: news.abs-cbn.com

US online Black Friday sales hit record $7.4 billion

NEW YORK - Online sales on Black Friday in the United States hit a record $7.4 billion this year, with a jump in the number of transactions made from smartphones, according to data released Saturday by Adobe Analytics.

The figure was a 19.6 percent increase over last year and the second biggest day of online sales ever, the company said, just below the $7.9 billion consumers spent on last year's Cyber Monday, which follows Black Friday.

Adobe Analytics measures transactions from 80 of the 100 largest US online retailers.

This year, 39 percent of online purchases were made from smartphones, a 21 percent increase from last year.

"With Christmas now rapidly approaching, consumers increasingly jumped on their phones rather than standing in line," said Taylor Schreiner, principal analyst and head of Adobe Digital Insights.

The hottest toys included L.O.L. Surprise dolls and items featuring Disney's "Frozen 2." In the video game category, the top sellers were FIFA 20, Madden 20 and Nintendo Switch.

The most popular electronics were Apple laptops, AirPods and Samsung TVs.

Adobe Analytics estimates Cyber Monday will see a record $9.4 billion in sales, a nearly 19 percent increase over last year.

Shoppers spent $4.2 billion online during the Thanksgiving holiday on Thursday, the company said.

source: news.abs-cbn.com

Top US retailers absorb tariff pressure ahead of holiday shopping season

WASHINGTON - Prices for electronics sold online at top US retailers were up slightly heading into the critical US shopping season, but sites including Walmart Inc and Amazon.com Inc have held prices steady for many other popular holiday products despite the pressure from tariffs on Chinese imports.

The analysis is based on a pricing study conducted for Reuters by retail analytics firm Profitero, which examined online prices from seven large retailers for 21,000 products.

The firm compared product prices during October and November last year to those this year in key holiday categories including appliances, electronics, toys and video games across Walmart, Walmart-owned Jet.com, Amazon, Target Corp, Best Buy, GameStop and Staples.

On average, the prices the retailers charged for electronics were 2.3 percent higher than the year-ago period, while across all the categories, prices were 0.9 percent higher, said Keith Anderson, senior vice president for strategy and insights at Profitero.

That’s lower than the average rate of inflation during the same period, which stood at 2.4 percent in 2018 and about 1.8 percent in 2019 so far.

In categories such as toys, prices dipped 0.2 percent and video games fell 2 percent, according to Profitero, which has not looked at year-over-year changes in pricing across the sampling of retailers and categories in the past.

Walmart and Target did not comment on the study but pointed Reuters to past comments from executives about how they have managed tariffs by working with vendors and diversifying their supply chain. Amazon did not immediately comment on the study. Best Buy declined comment and GameStop did not respond to requests for comment. Staples asked to see the study but did not comment.

America’s trade war with China threatens to push up product prices, which could hurt consumer spending this holiday season, a period which makes up nearly 40 percent of annual revenue for many retailers. The two countries are currently struggling to strike a preliminary trade deal.

About $539 billion worth of goods came into the United States from China in 2018, making the country the largest supplier of imported goods, the US Trade Representative said. US President Donald Trump has imposed tariffs and threatened more as leverage in trade negotiations with Beijing.

But while tariffs have driven up costs of goods for many retailers, at least the large firms have so far refrained from passing that cost pressure to shoppers, according to interviews with researchers, consultants and retail companies.

EBIT margins for all retailers excluding Walmart have been declining since October 2018 and at 6.7 percent are at their lowest since 2010, according to an analysis by Oxford Economics.

CONSUMERS NOT SEEING FULL EFFECTS
“Right now, nobody wants to be grinchy and steal Christmas so they are passing on as little as possible,” said Jeff Unze, a president at BorderX Lab - an e-commerce platform, which connects American retailers with Chinese consumers, and tracks pricing changes in both markets.

On Sept. 1, the US imposed a 15 percent tariff on many consumer goods from China that increased the cost of goods sold for most retailers. For example, Dollar Tree said tariffs will increase its cost of goods sold by about $19 million in the fourth quarter if tariffs are fully implemented.

In the Profitero analysis, Walmart’s products were only 0.4 percent more expensive compared to a year ago on a sample of over 6,000 popular holiday products. Amazon was 0.6 percent pricier on 9,200 products. A sampling of 1,200 items sold online by Target were 0.9 percent less expensive than during the year earlier period.

By contrast, chains such as Staples were over 4.7 percent more expensive, and the goods sold by Best Buy were priced at 1.1 percent more.

The study did not include popular categories such as apparel and accessories, which have largely not been subject to the Trump administration’s latest tariffs but are likely to face a 15 percent tariff in a new round scheduled for Dec. 15. 

Consumer price index data, through October, shows that televisions, phones, computer accessories, video and audio products accounted for four of the top five largest year-over-year price declines by category.

The data is based on sampling by the Bureau of Labor Statistics only through October, however. In contrast, Profitero looked only at online pricing at seven retailers during October and November.

source: news.abs-cbn.com

Louis Vuitton group raises Tiffany bid to $16 billion: sources

NEW YORK -- French luxury group LVMH has raised its bid to acquire US jewelers Tiffany by over $1 billion, two sources close to the matter told AFP Wednesday.

LVMH, the owner of Louis Vuitton, Dior and Moet & Chandon increased its bid for the storied New York-based company to around $130 per share from $120 per share, the sources said.

The move lifts the overall value for Tiffany to around $16 billion from $14.5 billion.

Neither LVMH nor Tiffany immediately responded to a request for comment.

LVMH, which is led by billionaire Bernard Arnault, has sought to acquire Tiffany as a means to boost its presence in the US market.

The transaction has also been seen as way forward for Tiffany, which has not matched some rivals in terms of sales growth in recent years.

Some analysts have predicted a price hike would seal the transaction.

source: news.abs-cbn.com

China retail giant Alibaba given OK for huge Hong Kong listing

HONG KONG - Chinese online retail titan Alibaba has been given the go-ahead to list shares in Hong Kong, reports said Wednesday, in what could be the city's biggest IPO in almost a decade.

Approval for the sale will also give the city's financial authorities a huge boost as Hong Kong is battered by months of pro-democracy protests that have tarnished its image for security and hammered the Hang Seng Index.

Asia's biggest company will kick off a weeklong roadshow from Wednesday as it looks to garner interest from institutional and retail investors, said Hong Kong's South China Morning Post, which is owned by Alibaba.

It added, citing unnamed sources, that the share price will be agreed on Nov. 20, with trading in the firm expected in the week of Nov. 25.

However, Bloomberg News reported speculation on trading floors that the share sale could be affected by protests that are wracking the city, with the Central business district among the areas targeted by demonstrations.

Alibaba, which is already listed on New York's Nasdaq, had planned to list in the summer but called it off owing to the city's long-running pro-democracy protests and the China-US trade war.

If realized, the $15 billion IPO would be the biggest since insurance giant AIA garnered $20.5 billion in 2010. However, it is lower than the $20 billion it had aimed to raise initially.

The listing also comes after the city's exchange tweaked the rules to allow double listings, while Chief Executive Carrie Lam had also been pushing Alibaba's billionaire founder Jack Ma to sell shares in the city.

A second listing in Hong Kong will also curry favor with Beijing, which has sought to encourage its current and future big tech firms to list nearer to home after the loss of companies such as Alibaba and Baidu to Wall Street.

Mainland authorities have also stepped up moves to attract such firms, including launching a new technology board in Shanghai in July.

The Sci-Tech Innovation Board was launched as a battle with the United States for technological supremacy heated up, with Chinese President Xi Jinping calling on tech leaders to become global champions, while the US has fought back in part by taking steps to clip the wings of Chinese telecom giant Huawei.

Alibaba has capitalized on the Chinese consumer's love of e-commerce to dominate the sector in China and become one of the world's most valuable companies.

On Monday it said consumers spent $38.3 billion on its platforms during "Singles' Day", the world's biggest 24-hour shopping event. That was up a quarter from the previous all-time high mark set last year.

source: news.abs-cbn.com

Alibaba's 11-11 sales hit record $38 billion

HANGZHOU, China -- Chinese retailer Alibaba Group Holding Ltd's sales for its 24-hour Singles' Day shopping blitz hit a record $38.4 billion, more than US rival Amazon.com Inc's haul last quarter from online store sales.

But sales growth for the annual shopping festival eased to 26 percent, the weakest since the event started in 2009, held back by a slowing e-commerce industry in China as the country's economic expansion heads toward a historic low.

The event, a gauge of Chinese consumer sentiment, has also become a shop window this year for Alibaba as it plans to sell $15 billion worth of shares in Hong Kong this month. The US-listed firm has spent big to diversify its business yet still earns over four-fifths of revenue from e-commerce.

Alibaba turned China's informal Singles' Day into a shopping event in 2009 and built it into the world's biggest online sales fest, dwarfing Cyber Monday in the United States which took in $7.9 billion last year. The name is a play on the date, Nov. 11, rendered 11/11 - or Double Eleven, as the event is also known.

The event has since been replicated at home and abroad, with Singles' Day promotions found at rivals such as China's JD.com Inc and Pinduoduo Inc as well as South Korea's 11thStreet and Singapore's Qoo10.

Alibaba said on Monday its gross merchandise volume or GMV for the whole event came in at 268.4 billion yuan ($38.4 billion), up 26 percent from last year but below Citic Securities' forecasts for a 20-25 percent expansion.

In 2018, it posted a 27 percent sales increase.

CELEBRITY START

The Chinese retail juggernaut, with a market value of $486 billion, kicked off this year's 24-hour shopping bonanza with a live performance by US pop star Taylor Swift followed by live-streamed marketing of over 1,000 brands.

The firm said 84 brands including those of Apple Inc, L'Oreal SA and Fast Retailing Co Ltd's Uniqlo each made over 100 million yuan in sales in the first hour.

Over half of merchants on its Tmall marketplace used live streaming to sell products during the event, and sales generated through the medium surpassed 10 billion yuan at 8.55 a.m. (0055 GMT), Alibaba said.

"Nearly all our brands have opted for livestreaming promotions some time this year," says Josh Gardner, who helps overseas companies sell products on Tmall as CEO of Kung Fu Data.

"It's more entertaining than browsing through a product detail page. Traffic from livestreaming is easy to convert into transactions, and Tmall has supported stores that run livestreaming activities with resources."

One vendor, New Zealand-based nutritional supplement maker Clinicians, broadcast livestreams from a booth set up on Alibaba's campus. According to Carlos Zhao, China market manager, the company has seen a 40 percent jump in sales after it started livestreaming in China six months ago.

"This is a product form from new Zealand, everything is in English, and so many people are selling similar products, so customers wonder, 'Which one do I choose from?'" he told Reuters. "Having a livestreamer can help to break those barriers."

Tmall has said it expects over 500 million users to make purchases this year, about 100 million more than last year. It has also put more emphasis this year on promotions targeting areas outside of China's massive first- and second-tier cities.

"The younger generation is buying more, and the customer from rural areas, the customers from lower-tier cities, they are buying imported products," Tmall General Manager Alvin Liu told reporters.

Singles' Day is known to be a stressful time for Alibaba employees with workers sleeping at the office to keep up with orders.

This year, at Alibaba's campus in Hangzhou, workers bustle around in red t-shirts with the slogan 'Make 11 happen'.

Percussion echoes through halls as departments bang large drums each time a sales record is broken. Pink rice cakes – dingshenggao, or 'victory cakes' eaten by Yue Army soldiers during the Song Dynasty - fill the office snack bars.

This is the first time Alibaba's Singles' Day is being held since its flamboyant co-founder Jack Ma resigned as chairman in September to "start a new life". 

source: news.abs-cbn.com

Forever 21 files for bankruptcy

Fashion retailer Forever 21 Inc said on Sunday it has filed for Chapter 11 bankruptcy protection to restructure its business, joining a growing list of brick-and-mortar players who have taken a hit from fierce e-commerce competition.

The company said it plans to exit most of its international locations in Asia and Europe, but will continue operations in Mexico and Latin America.

The retailer said it received $275 million in financing from its existing lenders with JPMorgan Chase Bank, N.A. as agent, and $75 million in new capital from TPG Sixth Street Partners, and certain of its affiliated funds.

It lists both assets and liabilities in the range of $1 billion to $10 billion, according to the court filing in the U.S. Bankruptcy Court for the District of Delaware.

Since the start of 2017, more than 20 U.S. retailers, including Sears Holdings Corp and Toys 'R' Us, have filed for bankruptcy, succumbing to the onslaught of fierce e-commerce competition from Amazon Inc. 

source: news.abs-cbn.com

Walmart accused of discriminating against women workers

NEW YORK - US authorities believe global retail giant Walmart likely discriminated against some female employees in US stores, paying them less or denying them promotions, according to a media report on Tuesday.

The Equal Opportunity Employment Commission, a federal agency charged with preventing workplace discrimination, found reasonable grounds to support the allegations, according to The Wall Street Journal, which cited EEOC documents.

The finding, which concerns 178 women across 30 states, comes after many years of efforts by workers to seek compensation for alleged discrimination.

Since a class action lawsuit failed before the Supreme Court in 2011, nearly 2,000 women have lodged EEOC grievances alleging sex discrimination by the company, The Journal said.

The newspaper cited documents provided by a law firm representing the women, which is calling on Walmart to reach a just resolution with the workers.

Walmart said Tuesday the complaints were old and comparatively few, given that the company has employed millions of women since 2004. The company also called the EEOC findings vague.

"We have told the EEOC that we are willing to engage in the conciliatory process with all the cases," the company said in a statement.

"The allegations from these plaintiffs are more than 15 years old and are not representative of the positive experiences millions of women have had working at Walmart."

The cases have been before the EEOC since 2012 and the company said it has urged officials to speed up the process.

With more than 1.5 million workers, Walmart is America's largest private employer.

source: news.abs-cbn.com

New era at Alibaba as Jack Ma rides into the sunset

SHANGHAI -- Jack Ma stepped aside as leader of the Alibaba Group on Tuesday, ending a spectacularly successful 20-year run during which the charismatic former English teacher's e-commerce company left a profound impact on China's economy.

Ma, who also turned 55 on Tuesday, said farewell in a speech in the eastern city of Hangzhou where Alibaba is based, thanking employees and predicting a smooth transition to a team of executives led by CEO Daniel Zhang.

"Today's is not Jack Ma's retirement. Its the start of passing on our system to another generation," Ma said in comments quoted by state media.

"This is not one person's choice. It shows the success of our system."

In a succession years in the making, Ma is stepping down as chairman of the company he founded in 1999 to focus on putting his $41 billion fortune toward philanthropic projects such as education. 

Ma's departure opens a new chapter for a company that helped unleash massive Chinese consumer spending, creating opportunities for countless businesses large and small, and helped cement the internet's central role in Chinese daily life.

Along the way, the charismatic Ma became a global figure.

With his fluent English, globetrotting, and playful antics -- he channeled Michael Jackson in a dance routine 2 years ago -- Ma shattered the aloof image of the Chinese executive, putting a friendly face on China's economic rise as he rubbed shoulders with the world's business and political elite.

"His background as an English teacher, allied to his raw charisma including a keen sense of humor have cemented his place... as the face of Chinese entrepreneurs overseas," said Duncan Clark, author of "Alibaba: The House That Jack Ma Built."

"His influence as a symbol of Chinese entrepreneurship is unparalleled."

RAGS TO RICHES 

Besides coming on his birthday, Ma's departure, fittingly for an instructor, fell on Teacher's Day in China, and on the same day Alibaba celebrated its 20th anniversary.

Ma was a cash-strapped entrepreneur when someone showed him the internet on a 1990s trip to the United States.

He launched various internet-related business projects in China that met with mixed success before convincing a group of Chinese and foreign friends to give him $60,000 to start a business-to-business e-commerce venture called Alibaba in 1999.

Today, Alibaba towers over Chinese e-commerce with more than half of domestic market share, international ambitions, and a dominant position in digital payments through affiliate Ant Financial.

US-listed Alibaba is now among the world's most valuable companies, worth $462 billion, according to Bloomberg data.

But Ma's successors face rising domestic competition just as growth in consumer spending is slowing along with China's economy.

Ma is expected to retain some advisory functions.

'A TEAM' TAKES OVER 

In contrast to Ma, the 47-year-old Zhang, who took over as CEO in 2013, is a mild-mannered finance expert. 

But Chinese media routinely refer to him as the operational brains who transformed idea-man Ma's sturdy little "tractor" into a "Boeing 747".

"The guys taking over are really top-tier," said Jeffrey Towson, an equity investor and professor at Peking University.

"This is the 'A Team'. You don't want to compete against them in anything."

Since Zhang took over operations, Alibaba has poured investment into new initiatives including bricks-and-mortar retail, cloud computing, digital media, the grocery sector, meal delivery, entertainment and advertising. Earnings have remained strong.

On Friday, Alibaba said it bought the e-commerce platform of fellow Chinese internet giant NetEase for around $2 billion, further strengthening its industry lead.

Alibaba and its imitators, however, have been accused of fostering rampant consumerism, traffic in counterfeit goods, and producing mountains of packaging-material refuse.

Ma himself has drawn barbs, including after he recently dismissed concerns that Chinese workers were toiling excessive hours, and over the revelation last year that he was a Communist Party member.

But he also has won plaudits for his philanthropy and self-deprecating ways, frequently recounting how he was rejected by Harvard "10 times".

While Ma has inspired strong devotion among employees and fans, Zhang eschews the limelight but is considered a hyper-competitive businessman.

"You must keep awake every minute; you need to keep your eyes open in your sleep," Zhang said last year.

source: news.abs-cbn.com

Walmart to limit ammunition sales after mass shooting in Texas store

NEW YORK - Walmart will halt sales of ammunition for handguns and some military-style rifles, the company announced Tuesday, calling the status quo on firearms in the United States "unacceptable."

Walmart also said it would direct consumers not to carry firearms into its stores, a practice that is legal in "open carry" states but which has sparked safety scares in recent weeks.

The moves, which were praised by gun control advocates and ridiculed by gun rights supporters, came a month after a deadly shooting at an El Paso, Texas store claimed 22 lives, a calamity that has been followed by subsequent attacks, including another shooting over the weekend in West Texas that left seven dead.

Chief Executive Doug McMillon called on Congress and the White House to enact "common sense" measures, including stronger background checks for gun purchases, while signaling the retail giant still plans to sell sporting rifles.

"As we've seen before, these horrific events occur and then the spotlight fades. We should not allow that to happen," McMillon said in a statement.

"Congress and the administration should act."

The actions stop well short of the outright ban on gun sales that some gun control advocates called for but are still significant given Walmart's size and prominence in many communities in the United States and its influence in corporate America. 

Later Tuesday, Kroger, the biggest US supermarket chain, called for strengthened background checks and announced it was "respectfully asking that customers no longer openly carry firearms into our stores, other than authorized law enforcement officers."

BOYCOTT? 

The world's biggest retailer, Arkansas-based Walmart has more than 4,700 stores across America, many in conservative regions where political opposition to gun control is strong. 

The hashtag #boycottwalmart was trending Tuesday afternoon on Twitter and the move drew a strident response from the National Rifle Association.

"It is shameful to see Walmart succumb to the pressure of the anti-gun elites," the NRA said. "Lines at Walmart will soon be replaced by lines at other retailers who are more supportive of America's fundamental freedoms."

On the other side, Everytown for Gun Safety praised Walmart for a "significant step forward."

Several Democratic presidential candidates also praised Walmart, while calling for more action, drawing further distinction from US President Donald Trump who has backed off efforts to tighten background checks.

Democratic presidential candidate Beto O'Rourke, who previously represented El Paso in Congress, called Walmart's move a "step in the right direction," adding, "we can't rely on corporations to stop gun violence. We need universal background checks, we need red flag laws, and we need to buy back every single assault weapon."

Walmart expects the changes to lower its market share for ammunition from around 20 percent to a range of 6 to 9 percent.

The company will also no longer sell ammunition for short-barrel rifles, which can be used for hunting but also in military-style weapons.

The company will still sell long-barrel deer rifles and shotguns and much of the ammunition they use, leaving its stores "even more focused on the needs of hunting and sport shooting enthusiasts," McMillon said.

NO MORE 'OPEN CARRY' 

Walmart also unveiled new policies restricting firearms in stores, citing a number of incidents in which shoppers have fled stores after members of the public brandished such weapons in "open carry" states. 

In one well-publicized incident last month just days after the El Paso shooting, a man in Missouri was arrested after entering a Walmart wearing body armor and carrying a loaded military-style rifle.

"We believe the opportunity for someone to misinterpret a situation, even in open carry states, could lead to tragic results," McMillon said. "We hope that everyone will understand the circumstances that led to this new policy and will respect the concerns of their fellow shoppers and our associates."

The moves announced Tuesday followed earlier actions by Walmart to restrict access to some weapons, including a decision in 1993 to halt handgun sales in all states but Alaska and in 2015 to end sales of semiautomatic weapons of the sort used in mass shootings. 

On Tuesday, Walmart said it was also ending sales of handguns in Alaska.

McMillon noted he is a gun owner himself, adding "we understand that heritage, our deeply rooted place in America and our influence as the world's largest retailer. And we understand the responsibility that comes with it."

source: news.abs-cbn.com

Walmart lifts profit forecast on strong US sales, limited tariff hit

NEW YORK - Walmart lifted its full-year profit forecast Thursday after better-than-expected results on solid US consumer spending, reflecting confidence that trade frictions will not significantly dent earnings.

Amid rising fears of a US recession, the world's biggest retailer said the American consumer as in "relatively good shape," as it posted another quarter of growth in US comparable sales, a closely-watched benchmark, jolting shares higher.

Walmart said full-year earnings per share will range from a slight decrease to a slight increase over last year, an improvement on the original outlook that called for a decline.

"Customers are responding to the improvements we're making, the productivity loop is working, and we're gaining market share," said Chief Executive Doug McMillon.

Net income was $3.6 billion, up from an $861 million loss in the year-ago period, when one-time costs related to its Brazil business dented results.

Revenues rose 1.8 percent to $130.4 billion.

The results caught President Donald Trump's eye, and he tweeted that the retail chain is a "great indicator to how the US is doing."

Walmart officials reiterated their firm support for free trade, after warning in June that proposed tariffs on a broad swathe of consumer goods imported from China are "likely to hit low-income American families the hardest."

BATTLING AMAZON

Walmart has been dueling with Amazon over faster home-delivery programs and in June unveiled a new venture to stock goods in customers' refrigerators in three American cities.

McMillon said Walmart had boosted its competitive position in several categories, including food, health and wellness and toys, attributing the gains to heavy investments in e-commerce and smartphone applications that have strengthened ties to American households.

Analysts view the investments as necessary, but they have hit the company's profit margins in the near term.

The retail giant has avoided specifics on how it is responding to tariffs on individual items.

The company's projections incorporate the latest US tariff plans, including Tuesday's announcement that Trump is delaying imposition of new duties on more than half the products targeted for the next round, to avoid hitting consumers during the holiday shopping season.

That reprieve spared Chinese-made cellphones and many toys, but still hit many consumer categories including apparel and televisions.

The fourth round of tariffs, set to begin September 1, "affects a larger part of our assortment than the prior tariffs," Chief Financial Officer Brett Biggs said in a statement.

He added that the retailer "has been able to thoughtfully manage pricing and margins with both our customers and shareholders in mind."

MITIGATING TARIFF HIT

Biggs said the company works with suppliers and tweaks its products in response to tariffs.

"You look at other places to source -- some of that can be done, some of it can't," Biggs told reporters on a conference call.

Analyst Neil Saunders of GlobalData Retail said the results show "Walmart will be a retail winner, even if external factors start to deteriorate."

But Saunders cautioned that the retail giant still needs to boost the profitability of its e-commerce business, adding that results should improve as customers become more familiar with the offerings and boost their purchases.

Gun control advocates have called on the chain to end firearms sales after a gunman who posted an anti-Hispanic manifesto killed 22 people in an attack at a Walmart in El Paso, Texas.

McMillon defended the company's decision to keep selling some guns as a "common sense" approach, noting that the chain had halted sales of military-style weapons in 2015 and raised the age limit to purchase a firearm to 21 in 2018 after an attack on a Florida school.

Walmart's share price jumped rose 6.1 percent to $112.69.

source: news.abs-cbn.com

Amazon pays a price for one-day delivery as profit growth slows

WASHINGTON - Amazon appeared to pay a hefty price for its move to speedy shipping, as the online giant reported profits below expectations as it ramped up for one-day deliveries.

Profits edged up just 3.6 percent to $2.6 billion in the past quarter, a figure below most Wall Street forecasts.

Revenues rose 20 percent to $63.4 billion in the April-June period for the company, a dominant force in retail with its Prime subscription service which is moving from two-day to one-day delivery on most items.

"Customers are responding to Prime's move to one-day delivery -- we've received a lot of positive feedback and seen accelerating sales growth," said chief executive Jeff Bezos in a statement.

"Free one-day delivery is now available to Prime members on more than ten million items, and we're just getting started."

But analysts said the costs of ramping up infrastructure were eroding profits.

BOTTOM-LINE WOES

"The additional shipping expenses have taken their toll on the bottom line," said Neil Saunders of the research firm GlobalData Retail, who added that Amazon is being forced to make these investments due to tougher competition from rival retailers like Walmart and Target.

"Traditional retailers like Walmart and Target are ramping up their e-commerce efforts and have the advantage of being able to offer collection from stores for shoppers wanting to obtain products quickly," Saunders said.

"By and large, Amazon has no such benefit, so it had to neutralize it by offering faster shipping for free."

Moody's Amazon Analyst Charlie O'Shea said Amazon profits were hit by "margin compression in North America due to the investments in next-day Prime delivery."

O'Shea said the shift to one-day delivery for many Prime items "is an example of short-term pain for long-term gain, and is a necessary strategy to compete with brick-and-mortar's speed advantage to the customer."

On a conference call, Amazon chief financial officer Brian Olsavsky said investments to speed up shipping have hit profits but that this would pay off in the long run.

"It does create a shock to the system, we're working through that now, and we expect we will be working to that for a number of quarters," he said.

"But when the dust settles, we will regain our cost efficiency over time."

Amazon Web Services, the cloud computing division which is a key profit driver for the company, saw revenue gains of 37 percent in the quarter.

O'Shea said AWS "continues to chug along and provide a significant buffer to the retail operations."

Amazon -- which has expanded from its origins in e-commerce to cloud services, streaming media, artificial intelligence and brick-and-mortar grocery stores -- saw shares slip 0.5 percent in after-hours trade on the results, which showed profits below forecasts but better-than-expected revenues.

The latest results did not include sales from Amazon's big Prime Day two-day sales event, said to have been a record.

Amazon has been delivering consistently robust profits in recent quarters after years of thin margins, as the company has grown into one of the world's most valuable, making Bezos the world's richest person.

source: news.abs-cbn.com