Muji's US unit files for bankruptcy due to COVID-19 pandemic

TOKYO - Ryohin Keikaku Co., the operator of the Muji-brand goods store chain, said Friday its US unit filed for bankruptcy protection after the coronavirus pandemic caused store closures and hit sales hard.

Total liabilities left by the subsidiary Muji USA Ltd. were $64 million, the Tokyo-based company said.

The Japanese retailer, which entered the US market in 2006, said the subsidiary suspended operations at all of its 18 outlets across the United States in March due to the outbreak.

The subsidiary is considering closing some unprofitable stores but plans to continue business in the United States while proceeding with restructuring efforts, the parent said.

It also said the filing for Chapter 11 bankruptcy protection by the subsidiary will not affect the bottom line of Ryohin Keikaku, which has already written down the value of its shareholdings in the U.S. arm to zero.

Also Friday, Ryohin Keikaku reported a group net loss of 4.12 billion yen ($38.6 million) for the first quarter through May, a turnaround from the 6.59 billion yen in profit a year earlier. Sales dropped 29.9 percent to 78.75 billion yen.

The company recently changed its settlement period from the end of February to the end of August. Still in transition, its current fiscal period ends in six months.

kyodo News

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

Ayala buys Zalora stake, bets on e-commerce

MANILA - The Ayala Group said Thursday it would acquire 43.3-percent of online fashion retailer Zalora, as it forays into e-commerce.

Ayala Corp. and units Ayala Land, BPI Capital and Kickstart Ventures have signed an investment agreement with BF Jade E-Services Philippines Inc., the owner of Zalora Philippines, according to a stock exchange filing.

The transaction is subject to the approval of the Philippine Competition Commission, Ayala Corp. said.

Zalora is the country's largest online fashion retailer, offering some 120,000 products across 1,000 brands, according to the disclosure.

Ayala Corp. shares were up 1.49 percent to P817 on Thursday.

source: news.abs-cbn.com

How to earn from peer-to-peer trading

When it comes to running a business, there are always two entities that work together: the retailer and the customer.

The retailer sells the product or service, and the customer pays with money in exchange for them.

But what if a third entity is put into the picture, and the retailer acts only as a middle man between the exchange? -- ANC On The Money

source: www.abs-cbnnews.com

Marks and Spencer blames new website for quarterly sales fall

LONDON - British retailer Marks & Spencer reported its 12th straight quarterly fall in its clothing, footwear and homeware division on Tuesday, hurt by the transition to a new website.

Britain's biggest clothing retailer, which also sells food, said sales at its general merchandise division at stores open for more than a year fell 1.5 percent in the 13 weeks to June 28, its financial first quarter.

That compares with analysts' forecasts in a range of between 1 percent and 2 percent down and a decline of 0.6 percent in the fourth quarter of M&S's 2013/14 financial year.

"We have seen a continued improvement in clothing, although, as anticipated, the settling in of the new M&S.com site has had an impact on sales," Chief Executive Marc Bolland said.

The new website is a pillar of the intended transformation of the 130-year-old business into an international retailer reaching customers through stores, the web, tablets and mobile devices.

However, there have been reports of problems with re-registration and navigation on the new platform. The company said that M&S.com sales fell 8.1 percent in the first quarter.

Bolland has spent 2.3 billion pounds ($3.9 billion) over the past three years in a push to address decades of underinvestment, overseeing the redesign of products and stores and an overhaul of logistics to serve the new website.

However, a new clothing team he set up in 2012 has failed to deliver a sustained increase in sales and, for the first time, M&S earned less in the year to the end of March than its faster-growing rival Next.

M&S said that sales from its womenswear division were up as a result of stronger full-price sales, but overall its clothing like-for-like sales fell 0.6 percent, against a 0.6 percent rise in the fourth quarter.

M&S's food business, which contributes more than half of group sales but less profit, is performing much better and delivered a 19th consecutive quarter of growth.

Its sales on the same basis rose 1.7 percent, against analysts' forecasts of up 1.5-2.5 percent and a fourth-quarter rise of 0.1 percent.

The company said its full-year guidance remains unchanged.

source: www.abs-cbnnews.com

Rustan's group brings Old Navy to Philippines

MANILA, Philippines - After Gap and Banana Republic, it's now Old Navy's turn to open in the Philippines.

The Rustan's group's Stores Specialists Inc. said the first Old Navy store in the Philippines will open at Bonifacio High Street on March 22. SSI is Old Navy's first franchisee.

Another Old Navy store will open in Glorietta 3 on March 29.

Old Navy offers men’s, women’s, kid’s and baby apparel and accessories.

SSI is already the partner of Gap Inc. for its Gap and Banana Republic brands in the country.

Anthony Huang, executive vice president of SSI, said Old Navy promises to deliver a "fun" shopping experience for the family.

"We are proud to announce our partnership with Old Navy and very excited about the brand's arrival in the Philippines and look forward to having the opportunity for future expansion," he said.

"We are very pleased to have our first franchise stores open in Manila... Bringing our American fashion essentials that are accessible to every family is something we are proud to offer the people of the Philippines," said Robert Frank, executive vice president, Old Navy, International.

Old Navy had announced its expansion in the Philippines last September 2013.

The Tantoco-led SSI is a wholly Filipino-owned corporation that has brought some of the biggest global brands to the Philippines such as Gucci, Cartier, Lacoste, Burberry, Marks & Spencer, Prada, Zara, The Gap, Banana Republic and Marc Jacobs.

source: www.abs-cbnnews.com

British retail giant Tesco to exit US

LONDON - Britain's biggest retailer, Tesco, wrote down the value of its global operations by $3.5 billion and announced plans to exit the United States, as it sought to rebuild after a year in which profit fell for the first time in two decades.

The group, the world's third largest retailer after Wal-Mart and Carrefour, said on Wednesday abandoning loss-making Fresh & Easy in the U.S. would mean restructuring and other one-off costs of 1 billion pounds ($1.5 billion).

Tesco also wrote down the value of its property in Britain by 804 million pounds, reflecting a decision not to develop more than 100 sites, and its businesses in Poland, the Czech Republic and Turkey by 495 million pounds, to account for a sharp slowdown in demand.

Though Chief Executive Philip Clarke hailed Tesco's fourth quarter performance in its home market as its best quarterly outcome in three years, it still represented a slowdown in growth since Christmas, despite a year of huge investment.

"I've been working for Tesco for nearly 40 years and I can tell you this - it already looks, feels and acts like a different and a better business," Clarke told reporters.

"We've closed the gap in the (UK) market, at times we've outperformed it," he said.

Shares in Tesco, up 24 percent over the last three months, were down 3 percent at 1004 GMT, valuing the business at 30 billion pounds.

"Management cannot claim concrete evidence of a UK recovery with these numbers," said Panmure Gordon analyst Philip Dorgan.

"It will take time - retail is detail - but we believe that Tesco is on track and we expect recovery in the UK to slowly emerge in FY2014," he said, adding that Tesco could commence share buybacks in 2015.

Tesco made a statutory pretax profit of 1.96 billion pounds in the year to Feb. 13, down 51.5 percent. It also reported an expected 14.5 percent fall in underlying full-year profit to 3.55 billion pounds, largely reflecting the cost of a 1 billion pounds turnaround plan for its home market, launched after a shock profit warning in January last year.

Earnings were also hit by the impact of the euro zone debt crisis on eastern European markets, restrictions on store opening times in South Korea, and the Fresh & Easy losses.

Fourth quarter sales at British stores open over a year, excluding fuel and VAT sales tax, grew 0.5 percent. Though at the top end of analysts' forecasts it was worse than growth of 1.8 percent recorded in the six weeks to Jan. 5.

Tesco's fightback plan for Britain, where it makes over 60 percent of revenue and profit, has focused on more staff, refurbished stores, revamped food ranges and price initiatives - all aimed at reversing years of underinvestment and halting a loss of share to rivals like J Sainsbury and Asda.

The group also said it had increased a provision to cover the possible miss-selling of insurance products at its Tesco Bank to 115 million pounds.

U.S. RETRENCHMENT

Following the U.S. retrenchment and reassessment of its UK property plans, including a scaling back of sale-and-leasebacks, Tesco now expects to deliver mid single digit trading profit growth, a return on capital employed within a range of 12 to 15 percent and dividend growth broadly in line with underlying earnings.

Fresh & Easy, which trades from 199 stores and employs around 5,000, has absorbed over 1 billion pounds of capital since its 2007 launch when Tesco was run by Clarke's predecessor Terry Leahy but has never turned a profit in a market where it competes with the likes of Trader Joe's and Wal-Mart.

"When I became CEO I really did give it all that we had but in the end I'm responsible to investors and I know I can deliver more to them by leaving that I can by staying," said Clarke.

He had put the venture, which contributes just 1 percent of group turnover, under review in December, saying an exit was likely.

Chief Financial Officer Laurie McIlwee said Tesco had received "a lot of interest" in Fresh & Easy, both for the whole business and parcels of stores.

"What we're most interested in is those buyers that are interested in buying the complete business," he said, noting that a clean sale would remove redundancy and onerous leasehold issues.

He said Tesco would not conclude the process for at least another three months.

The group is paying a maintained dividend of 14.76 pence.

source: www.abs-cbnnews.com

New Penney CEO's task is chain's revival

There won't be an easy fix for J.C. Penney -- if it is even fixable.

As Mike Ullman takes the reins again less than two years after his departure, he faces a herculean task to undo the mess left by his predecessor, Ron Johnson, who was ousted Monday. With the department stores in the middle of a disastrous overhaul that has driven away shoppers, the 66-year-old Ullman has to quickly figure out what parts of Johnson's legacy to keep and what to trash.

The overarching question is whether the century-old retailer can be saved at all. Very few retailers have recovered from sales declines of 25 percent in a single year, as Penney suffered under Johnson's watch. In fact, the retailer's stock price dropped 12.22 percent to $13.93 Tuesday as investors' worries escalate about Penney's future.

"Ullman can't go back to the old ways, but he can't do what Ron Johnson did," said Ron Friedman, head of the retail and consumer products group at Marcum LLP, a national accounting and consulting firm. "I think there will be a combination of the two. But he has to make some quick moves."

Apparently, the company's board of directors felt Ullman, who served as Penney's CEO for seven years and is known for strong relationships with suppliers and calm, steady execution, would be the best choice to secure the company's future right now.

The board's firing of Johnson, the mastermind behind Apple Inc.'s successful retail stores who held the Penney job for 17 months, comes after a growing chorus of critics called for Johnson's resignation as they lost faith in his aggressive overhaul.

The rapid-fire changes included getting rid of coupons and most discounts in favor of everyday low prices, bringing in new brands and remaking its outdated stores. Johnson's goal was to reinvent the stodgy retailer into a mini-mall of hip specialty shops.

Penney's loyal shoppers in search of deals went elsewhere, and the chain didn't attract the younger and more affluent shoppers Johnson coveted. Now the 1,100-store chain is burning through cash.

In the past year, the company lost nearly a billion dollars and saw its revenue tumble nearly $4.3 billion to $12.98 billion. Customer traffic dropped 13 percent from the year before. Such deep sales declines have continued into the current quarter even as Johnson has added back some sales events and coupons.

Ullman will also have to find ways to boost employee morale amid severe head count reductions of nearly 30 percent.

source: newsday.com

Wal-Mart to open new store in West Covina

Retail giant Wal-Mart Stores Inc. announced plans to open a new 120,000-square-foot store in West Covina.

The store, which is expected to open this year, will slide into a space once occupied by Mervyns at the Eastland Center shopping area.

"When you look around at the surrounding area, local residents are always looking for affordable shopping options," Steven Restivo, Wal-Mart's director of community affairs, told the San Gabriel Valley Tribune. "We think our store can be part of the solution for West Covina residents."

The announcement brought both praise and opposition from local residents, some of whom have announced at City Council meetings their plans to protest and boycott the store when it opens, the newspaper said. Because the Eastland shopping center is zoned for commercial retail, city officials say the local government and residents cannot prevent the store from opening.

The retailer also has been quickly expanding its grocery-oriented Neighborhood Markets. One smaller-format supermarket opened in Huntington Beach at the end of last year. Another planned for downtown Los Angeles' Chinatown neighborhood has incurred fierce opposition from some residents and workers advocacy groups.

But West Covina Mayor Mike Touhey said the new Wal-Mart store will bring much needed jobs.

"The job growth is good because we lost a similar amount of jobs when Mervyns closed in late 2008," Touhey told the Tribune.

source: latimes.com

Best Buy Names Hubert Joly New CEO

In the midst of falling sales and clashes with founder Richard Schulze, Best Buy announced Monday that the company has chosen a new CEO, hospitality industry veteran Hubert Joly.

Joly joins Best Buy from Carlson, the restaurant and hospitality giant behind T.G.I. Friday’s and Radisson, the hotel chain. Joly, who is French, will take over in September, once he has secured a visa to work in the U.S. Board member G. Mike Mikan has been serving as interim CEO since former CEO Brian Dunn stepped down in April.

According to The Associated Press, Best Buy said in a statement that Joly has a history of turning companies around.

“Hubert was an outstanding candidate for this position and I am confident he will be a great fit for Best Buy,” chariman of Best Buy’s board Hatim Tyabji said in a statement. “Hubert’s range and depth of experience in transforming companies is exactly what the company needs at the moment, as is his energetic, imaginative and experienced leadership in executing strategies.”

article source: mashable.com

Best Buy founder Richard Schulze offers to buy struggling retailer

Two months after former Best Buy Co. Chairman Richard Schulze exited the board amid scandal, he offered to buy the struggling electronics giant for as much as $8.84 billion, a deal that would make it the largest buyout ever of a U.S. retailer.

But the offer of $24 to $26 a share was met with considerable skepticism Monday among analysts and investors, who nudged the stock price up $2.35, or 13.3%, to $19.99 but nowhere close to the proposed takeover offer price. Standard & Poor's cut Best Buy's credit rating to junk since such a buyout would add debt to its books.

Schulze said he would take the company private by putting in $1 billion of his own money and securing debt financing as well as investments from private equity firms. He made the offer in a letter sent to the board that he made public Monday

The proposed buyout — which could top the $8.4-billion buyout of Toys R Us in 2005 — represents a premium of 36% to 47% over Best Buy's closing stock price Friday.

The company has been struggling to stay relevant with shoppers who can comparison shop on their smartphones. It's also fighting nimble rivals such as Apple Inc. and online competitors such as Amazon.com Inc., which can frequently offer lower prices.

Best Buy announced plans in March to close 50 of its big-box stores, lay off 400 workers and downsize many of its other locations. In May the company reported a 26% drop in its fiscal first-quarter profit.

The company based near Minneapolis is the biggest survivor of the consumer electronics shakeout that led to the demise of Circuit City and a host of regional competitors. It's the last of the nationwide big-box consumer electronics retailers. But the slowing market for DVDs and CDs and competition from online rivals has dimmed its prospects.

Despite its turnaround efforts so far, industry watchers speculate that Best Buy may eventually go the way of Circuit City, the former rival that closed its last store in 2009.

The company's prospects make it a risky bet both for banks that may extend loans and for private equity firms that would consider investing in a buyout deal, said Michael Pachter, a research analyst at Wedbush Securities in Los Angeles.

To offset the high level of risk, private equity firms would require a compelling return on investment of at least 20% a year, an unlikely scenario considering the increasing power of online competitors, Pachter said.

"It's not like the Internet will go away," he said. "I don't think people are going to line up to invest."

Schulze resigned in June after a scandal involving Best Buy's former chief executive, but he remained the company's largest stakeholder with 20.1%, or about 69 million shares. Since then, rumors have circulated that he would make a takeover bid and try to turn around the company he co-founded in 1966.

In a statement Monday, Schulze implied that he has yet to secure the money needed for the deal, although he has held discussions with private equity firms that are interested.

"There is no question that now is the moment of truth for Best Buy and that immediate and substantial changes are needed for the company to return to its market-leading ways," he said in the statement. "After assessing all of my options, it is my strong belief that Best Buy's best chance for renewed success is to implement with urgency the necessary changes as a private company."

Best Buy confirmed in a statement Monday that it had received Schulze's letter, which it called "an unsolicited, highly conditional indication of interest." The board said it will "review and consider the letter in due course." Company spokesman Bruce Hight declined to comment further.

In April, Brian Dunn, then Best Buy's chief executive, resigned amid allegations that he engaged in an inappropriate relationship with a female employee. The board then voted to oust Schulze after an internal investigation discovered that he knew of Dunn's indiscretions months earlier and failed to report them.

"What makes matters more interesting is that the same board who asked him to leave earlier this year is now weighing his offer to buy the company," said Brad Thomas, an analyst at Keybanc Capital Markets in New York. "I think it's very much up in the air."

In his statement, Schulze said that he had hoped to negotiate privately with Best Buy but that "time is of the essence" to curtail further "loss of both value and talented leaders who are now uncertain of the company's future."

By publicly announcing his takeover bid, Schulze is pressuring Best Buy to open its books so possible investors can do an in-depth assessment of risk and move the process along, Thomas said. That may prevent a "chicken or egg situation" where the board does not want to reveal its financials before receiving a commitment from Schulze, and Schulze cannot make a commitment until private equity firms take a look at the company's financials.

Industry watchers say Schulze's letter is probably a prelude to negotiations with Best Buy with a conclusion that's hard to predict.

"The unwillingness of Best Buy's board to cooperate — hence the decision to go public with the offer — signals a long, drawn-out process that is no slam dunk of being completed," Brian Sozzi, chief equities analyst at NBG Productions, wrote in a note to investors.

Although Schulze wrote of developing a business plan that addresses Best Buy's many obstacles, industry watchers remain skeptical about his ability to turn the company around.

"Mr. Schulze was chairman during the time that Best Buy posted significant same-store sales declines," Thomas said. "If he has an amazing plan, why didn't he implement it earlier?"

source: latimes.com

Wal-Mart may pay millions to resolve Mexican bribery allegations

Wal-Mart is looking into allegations that it engaged in a multiyear bribery campaign in Mexico. It could pay hundreds of millions of dollars in legal expenses and penalties to resolve the allegations.




Wal-Mart Stores Inc. could end up paying hundreds of millions of dollars in legal expenses and penalties to resolve allegations of widespread bribery by officials with its Mexican subsidiary, experts in foreign corruption law said.

The world's largest retailer said it was in the midst of a "worldwide review of our anti-corruption program" and had increased efforts to prevent corruption in Mexico. The Bentonville, Ark., company is looking into allegations that it engaged in a multiyear bribery campaign to build its business.

The allegations come at a time when the Justice Department has been cracking down on foreign corruption. The agency filed some two dozen cases against U.S. companies in 2010, compared with none a decade earlier.

"You have an incredible amount of legal challenges that are going to take part as a result of these failures," said James Post, a business management professor at Boston University. "The board of directors should bring in an outside firm to launch a full investigation. They have to open up the record on everything that's happened here."

He said Wal-Mart also faces shareholder lawsuits, along with criminal charges and potential action by the Securities and Exchange Commission.

Wal-Mart's Mexican subsidiary might have paid $24 million in bribes in order to speed the approval of new stores in Mexico, according to a report from the New York Times. Wal-Mart operates more than 2,000 locations in Mexico, its largest foreign presence.

Investigations of foreign corruption by U.S. companies typically last two to four years and could cost tens of millions of dollars in legal expenses, said Michael Koehler, a Butler University professor.

The bribery allegations "will be used against the company by activists and companies when it attempts to open stores in the U.S. and abroad, and could make it more difficult to attract management talent in international markets," BMO Capital Markets analyst Wayne Hood said.

Wal-Mart shares fell $2.91, or 4.7%, to $59.54 on Monday. Analysts said they fear that the investigation could become a distraction to the company and hamper foreign expansion.

The Foreign Corrupt Practices Act was enacted in 1977 after a series of investigations by the SEC, and hundreds of U.S. companies acknowledged making questionable or illegal payments to foreign government officials and politicians.

Enforcement of the law has become such a concern to business that the U.S. Chamber of Commerce has lobbied for changes. It says that the law is vague and might discourage business.

In Mexico, where Wal-Mart's subsidiary also owns a vast network of supermarkets, family restaurants and clothing stores, the bribery allegations have led to local media coverage and pushed shares down 12% on the Mexican stock market.

Mexican regulators reacted cautiously to the allegations. In Washington for meetings, Finance Secretary Jose Antonio Meade said the government lacked sufficient evidence to move against the firm yet.

Luis Tellez, head of the stock market in Mexico, defended Wal-Mart's performance. He said the retailer has met the market's financial reporting requirements and boosted the Mexican economy by creating jobs.

"Without doubt it has generated wealth in terms of work, wages for its employees and in terms of giving Mexican consumers shopping opportunities at low prices," Tellez said.

The allegations are sure to provide fuel for Wal-Mart detractors south of the border, where the rapid spread of U.S.-style big-box stores threatens traditional, small-time vendors. Critics have also questioned the value of the jobs created by Wal-Mart, saying most of those positions are poorly paid.

Few Mexicans, though, were likely to be shocked at charges that a company had paid bribes.

Mexico has one of the highest corruption indexes among the world's big economies, and greasing the palms of officials is routinely viewed as another cost of doing business by even the most humble street vendor.

source: latimes.com