Thursday, September 28, 2006
Kudos to Mike Kantor and his team for putting on a great show and continuing the turn-around efforts Deb Kuhns put in place over the past few years. Mike has done a great job since taking over from Deb, and it showed in the capacity crowd and the strong agenda.
Farnan [concluded] that he lacked jurisdiction over AMD's claims based on conduct and harm that took place outside the United States.
"AMD has not demonstrated that the alleged foreign conduct of Intel has direct, substantial and foreseeable effects in the United States which gives rise to its claim," Farnan wrote in an 18-page opinion.
At best, he said AMD's allegations described activity that might have had "ripple effects" in the United States, but not enough to give rise to an antitrust claim.
The case will go to trial in 2009. No kidding -- 2009.
Australian retailer Coles Myer Ltd. said on Thursday it has had no talks with British retailer Tesco Plc or U.S. giant Wal-Mart Stores Inc. and did not plan to sell any of its businesses.
The SEC said that Cotton ... orchestrated the scheme, which involved deliberately booking revenue and delivering products to a distributor before orders had been placed, violating accounting procedures by booking revenue from orders that gave distributors expanded rights to return unsold products.
The cosmetic marketer's new president-CEO, David Kennedy -- tellingly, the former chief financial officer -- is sweeping out 250 jobs, among them several executives from Mr. Stahl's team, notably CMO Stephanie Klein-Peponis; Chief Creative Officer Rochelle Udell; and Revlon Director-Marketing Maura Mottolese. No successors were named; the company said brand managers would report to Mr. Kennedy. A spokeswoman did not return calls for comment by press time.
According to an executive close to Revlon, the cuts are a part of Mr. Kennedy's strategy to develop a more cost-effective structure. "We were fat in terms of senior-level marketers," the executive said. The team is also likely taking the fall for the failure of a multitude of recent efforts intended to turn the company around, among them the launch of the Vital Radiance brand aimed at older women.
Revlon had put more than $17mil in media behind the new line, but they're dumping it now:
Mr. Kennedy said the company has decided to discontinue the line, taking a negative hit of $110 million, figuring it was unlikely to receive space at Revlon's "best [retail] accounts." Instead of building Vital Radiance, the investment saved will be used to leverage the mainstay Revlon brand, he said.
Thursday, September 21, 2006
Sunday, September 17, 2006
Having too many attendees has not been a big problem at TPMA meetings in the past -- we salute the people involved for putting together a great agenda and promoting it successfully.
Although Indian law has been liberalized, Tesco still could not enter the country directly, it would be acting with Bharti as a franchisee.
"Planning is underway and a team is carrying out extensive research and is testing various models," Bharti chairman and managing director Sunil Mittal told the Business Standard daily newspaper.
We've reported previously (here and here) on the company's problems, which stem apparently from misbooking trade promotion allowances: ("The Audit Committee found that the Company had engaged in certain improper practices principally relating to the premature recognition of promotional allowances ...").
The company, which operates 112 stores in the northeast US, is being investigated by both the SEC and the Justice Department, and fired a couple top executives earlier this year as a result of an internal investigation. But they have not released financials since emerging from Chapter 11 in April 2005.
You gotta wonder what's in those reports.
They dumped their CEO last week, or rather, he is leaving "to focus on his family and new professional endeavors." And they brought in a new CMO as well.
The 230-store consumer electronics chain posted its strongest operating results in a decade in 2005, but it wasn't able to keep up the momentum and needs additional capital to remodel and build new stores.
According to industry sources familiar with the offer, Mexico's Grupo Carso SA has asked Credit Suisse to quietly approach people who might have an interest in buying the company.
Over the last two years, private equity firms flush with cash have turned to the retail sector to find companies that are poised for growth or ripe for a turnaround.
CompUSA's problem is that retail is going to the two-per-channel model, and they're a poor #3. CompUSA's sales of $4.6b are less than half of Circuit City's $11.6b, and only about a seventh of Best Buy's $31b.
Wal-Mart has been doing very poorly in Japan ("having lost $105 million in 2004 and $152 million in 2005, [Wal-Mart] expects losses of $468 million during 2006") and there has been some speculation that that country might be the next cut. But Business Week reports that Wal-Mart may be looking to buy their way to prosperity.
... for all the backtracking elsewhere, Wal-Mart doesn't appear ready to give up on Japan just yet. On Sept. 4, Kyodo News, a Japanese wire service, reported that Wal-Mart and market leader Aeon have submitted proposals to acquire a stake in Daiei from trading house Marubeni, the largest shareholder in the once mighty retailer.BW suggests that Wal-Mart may quit Japan if they are unsuccessful in this bid: "But if Wal-Mart fails again to get its hands on Daiei, some fear it will bolt from Japan as it has from other countries." For the contrary view, they quote a local analyst:
Wal-Mart declines to comment on the report, but the impact of a deal with Daiei shouldn't be underestimated. Its outcome could well determine the success or failure of Wal-Mart's experiment in Japan, the world's second largest retail market after the U.S.
So does that mean Wal-Mart should cut and run if Daiei slips its grasp? Not necessarily, says Yoshihiro Tamehiro, director of the Distribution Economics Institute of Japan in Tokyo. "Wal-Mart is desperately looking for M&A opportunities in Japan. If they don't get Daiei, they should have other plans in place." If they don't, the Seiyu gambit could turn out to be another messy and expensive overseas quagmire for the king of U.S. retailing.Meanwhile, in Australia, the latest Coles Myer rumor is that Wal-Mart is interested in buying.
Australian retailer Coles Myer Ltd. Thursday declined to comment on a report that U.S. retail giant Wal-Mart Stores Inc. was considering a bid for the company. "We don't comment on speculation," a spokesman for the Melbourne-based company said.
The Crikey corporate gossip newsletter earlier Thursday quoted unnamed sources saying Wal-Mart directors were in Melbourne along with advisers from McKinsey and in the advanced stages of a bid, which could lead to Coles Myer being carved up.
The report said the proposal would lead to Wal-Mart buying the Coles grocery business, Kmart, Vintage Cellars and Liquorland, while Melbourne businessman Solomon Lew would buy Target. The Officeworks office supplies and furniture business would be sold to the highest bidder, the report said.
Estee Lauder is going mass by expanding distribution for its prestige Clinique cosmetics brand to include Shoppers Drug Mart, the largest drug store chain in Canada.My first reaction was that this is a disastrous move -- that going mass will destroy the brand image. Some analysts quoted in the story disagree, however:
Industry analysts did not seem particularly concerned that distribution in an "assisted self service" channel would harm Clinique's image.
It's good to test different channels, said Suzanne Grayson, industry expert and president of the consultancy Grayson Associates. "If it's executed well -- and I'm sure it will be -- with the mix of other high end brands already [in the shopping venue], it won't affect the brand image."
On reflection, though I'm not convinced that the move will not damage the brand, I'm also not certain Lauder had a lot of choices. With the continuing constriction of the department store channel, the fact is that they (and many other "department store brands") are running out of places to sell their products.
Thursday, September 14, 2006
AMD has pressed similar charges with the trade commissions in Japan and Korea, in addition to filing a private action against Intel in the US.
's antitrust agency, Bundeskartellamt, received a complaint from AMD alleging that Intel had abused its dominant market position by putting pressure on major electronics retailer Media Markt to not sell AMD's chips. Because the Commission found similarities with its existing probe into Intel, it took over the German investigation in late August, Commission spokesman Jonathan Todd said. Germany
Other countries have weighed in with their own investigations into Intel's business practices. Earlier this year, the Korean Fair Trade Commission sought more documents from Intel relating to its antitrust investigation into the chip giant.
And last year, Intel agreed to abide by recommendations from the Japan Fair Trade Commission, which had launched its own probe. The recommendations called for Intel to halt its practice of requiring PC makers to restrict the use of competitors' chips in exchange for monetary rebates. Intel accepted the recommendations but disagreed with the facts underlying the allegations.
We'll continue to monitor this closely, because the issues are important ones.
Parra noted that while Dell had other cities in mind, further expansion would depend on results at these stores.However, there are no plans to put Dell product in conventional retail outlets.
This is part of the increasingly-blurry lines between manufacturers and retailers, as retailers increase their private label and manufacturers open retail outlets. (Though Dell was always a cross-over).
Parra said the company would not seek to put its products in other big-box electronics retailers.
"That's not us," he said. "It is unlikely you will see our PCs in Best Buy."
Monday, September 11, 2006
Walgreen wants to reduce the number of good its carries, such as multiple varieties of Tylenol, Chief Executive Officer Jeffrey Rein said at a Goldman Sachs Group Inc. retail conference in New York City Friday. The company is also considering opening stores that are smaller than its traditional stores in the 10,000- to 14,000-square-foot range.While multiple varieties of the same product are one thing (not happy news for McNeil Labs to have their product singled out, is it?), I wonder if this will also be another case of a major retailer reducing the number of brands it offers.
Nope, it's about British stores targeting Poles.
Leading British supermarkets are stocking up on Polish food to supply the thousands of Poles who have moved to the UK in the past two years.There are apparently as many as 600,000 Poles in the UK -- a fairly significant market.
Sainsbury's, Tesco and Asda are all introducing new Polish ranges, keen to tap into the substantial spending power of the UK's growing Polish communities.
Items sold include borscht, meatballs, pickled vegetables and sauerkraut soup.
...effectively breaking its 3,400-unit U.S. division into six smaller chains that will target specific consumer segments: affluents, African-Americans, boomers, Hispanics, rural residents and suburban residents. For example, stores aimed at African-Americans will feature more urban-style apparel and ethnic hair care products in addition to expanded gospel and rap music selections. The chain is renovating units at the rate of about 300 stores per year to reflect the new merchandising strategy ...A few stats were cited that indicate success with the idea:
So far, 200 stores have undergone conversion, he said. At one Houston store recently converted to the Hispanic-targeted model, sales per square foot are 7.6 percent higher and gross margins are 156 basis points higher than those at other Houston Wal-Marts, he said. At a suburban Chicago store converted to the African-American-targeted model, gross margins are 250 basis points higher than other area stores.Sounds like a good idea, but I wonder if Wal-Mart's legendary logistical efficiency can stand the strain of supplying six chains simultaneously.
It was the mayor's first veto in his seventeen year term (in Chicago, it's rare for the council to pass a law that the mayor doesn't approve of), and he appears to have pulled a few aldermen over to his side to ensure he won't be overridden.
Thursday, September 07, 2006
J.C. Penney's desire to reposition its brand as the preferred choice in the "hearts and minds of Middle America" drove its decision last week to shift creative duties from DDB to Saatchi & Saatchi, said Penney chief marketing officer Mike Boylson. The shift came after months of presentations by both DDB in Chicago and Saatchi in New York.Not that I know much about advertising or positioning -- I'm strictly a trade promo guy -- but all the talk about the country going high/low (it's either Wal-Mart or Nordstrom) has struck me as overdone. I think JCP has the right idea. In any case, we'll see.
"We believe that the hearts and the minds of Middle America are up for grabs," Boylson said Friday. "Middle America is really underserved. And we think there's a unique opportunity in owning the middle, owning the moderate space."
Wednesday, September 06, 2006
Coles Myer said the bid, pitched at an indicative price of A$14.50 a share, was opportunistic and highly conditional, subject to unspecified due diligence, and offered no certainty on proposed financing.
However, analysts said the consortium, a group of top private equity players led by U.S.-based Kohlberg Kravis Roberts, could return with a higher bid, given the potential to add value to Coles Myer's food and liquor stores across Australia. The bid was pitched at a 5.8 percent premium to Coles latest share market close at A$13.71.
First, from LA, we learn that Tesco is building a distribution center in the desert east of LA on the site of the old March air base -- convenient to LA, Phoenix, and Vegas, where the first store will be going up. They also report that the stores are anticipated to be in the 10,000-12,000 square foot range and will go for a somewhat upscale approach:
In America, Tesco plans to roll out a chain of convenience stores based on its Express format, a move that will have it go head-to-head with niche retailers such as Trader Joe’s — a gastronomic grocery chain that prides itself on its hip image — rather than Wal-Mart.From Phoenix, we hear that the name of the stores might be "Fresh & Easy", and that they are planning to open fifty stores in the first wave, with an eventual goal of 100 in the Valley of the Sun.
Tesco’s small-store format, Tesco Express, has proved a huge success not just in Britain, but around the world.
It was in 1994 that Tesco opened its first trial Express store in Barnes, southwest London. Originally developed on petrol forecourts, Tesco initially appeared to be unconvinced about the new format — a year later it had opened only two more trial outlets.
But today it has 830 in Britain, Thailand, Japan, Korea, Malaysia, Turkey and Ireland and is opening two Express stores a week in the UK alone.
Tesco's Phoenix concept is to provide the convenience of a Circle K or 7-11 mini-mart, while offering fresh and prepared foods, such as those found at Trader Joe's, Whole Foods or Sprouts.
Winston-Salem, N.C.-based Hanesbrands, whose largest customers are Wal-Mart Stores Inc. and Target Corp., had $4.49 billion in sales for the year ending July 1, compared with $4.68 billion a year earlier.The new company includes the Hanes, Champion and Playtex brands.
The cuts were as follows: one news page; one sports page; two business pages, including a listing of financial tables; and two features pages.That'll pull in the readers.
Okay, I'll admit it: I can't see what else they can do. The fact is there are fewer readers, therefore fewer advertisers, therefore fewer pages. The problem the industry faces is ... where does the cycle end?
Monday, September 04, 2006
Some of the best-known clothing and accessories companies, such as Jones Apparel and Liz Claiborne, are dealing with fewer outlets to sell in, thanks to department store consolidation. Federated Department Stores bought May Department Stores last year, and on Sept. 9 former May stores across the country will become Macy's. Meanwhile, Saks has sold several of its non-Saks department stores to Belk and Bon-Ton.The article lists some anticipated winners and losers from the coming shake-out:
The mergers leave clothing brands looking for new outlets, opening their own retail stores and trying to quickly make friends with new buyers for the remaining department-store names.
- Polo Ralph Lauren
- Liz Claiborne
- Philips-Van Heusen
- Jones Apparel
- Tommy Hilfiger
... smart brands also will form partnerships with the strongest retailers and customize their offerings the way some already have with Macy's. Along with heavily promoting its private labels, Macy's will have exclusive merchandise from Elie Tahari and Martha Stewart in fall 2007. Vera Wang announced a deal last week to create an apparel line for Kohl's, just as Isaac Mizrahi did for Target.
Rigby says shoppers will benefit from some of the likely improvements made in a downsized retail environment. Among them: Apparel companies will need to shorten their lead times to help get the trends and fashions consumers want into stores.
Consumers for the most part enjoy watching ad-supported media while grocery shopping and their buying decisions are often influenced by such messages.Frankly, the first sentence makes me question the whole thing. I really doubt anybody enjoys it, but I'm willing to believe it might be effective. It's in line with my long-held belief that the store is the most effective marketing medium.
So says a Nielsen Media Research study that examined in-store media provided by Fairfield, Conn.-based SignStorey. Albertsons and Pathmark are among the grocers that carry the SignStorey video network, which is now in 1,300 stores.
According to the study, 68 percent of those surveyed said in-store messages would sway their product purchasing decisions. Another 44 percent said they would swap a product they had intended to buy for one advertised on SignStorey.
The study, Nielsen's first customized analysis of supermarket data, gauged overall SignStorey viewership at close to 40 percent. (That figure—which represents approximately 22 million shoppers—included consumers who briefly glanced at the screens, listened to messages or watched intently for extended periods.)
According to research house PQ Media, in-store TV ads tallied nearly $100 million in 2005 revenue, a 45 percent increase from the previous year.Impressive numbers.
The end may be near for the seemingly impenetrable plastic clamshell package.I was thinking this was off-topic, but it really is a channel marketing issue. In any case, it has always amazed me that marketers would show so little interest in an issue that angers so many of their end customers.
Costco Wholesale Corp. will begin rolling out to its membership warehouses this fall more product packaging that combines plastic and stiff cardboard.
With these hybrids, consumers can still see the product through the plastic bubble, but the edges are cardboard. And while consumers still will need scissors to cut and separate the sealed cardboard halves, the process will involve cutting a flat piece of cardboard rather than piercing welded plastic ridges and a molded case.