English news 19 october 2007

19 October 2007

ADITYA BIRLA recruits in Kolkata

According to unconfirmed reports in the Indian press, Aditya Birla has started recruiting people in Kolkata as the company is looking forward to setting up 1,000 more retail outlets in different states of the country.

BAUGUR in talks to buy Saks

According to unconfirmed reports in the UK, a consortium led by Icelandic group Baugur is considering a GBP3 billion (USD5.9 billion) offer for US department store group Saks. It is understood that Gunnar Sigurdsson, Baugur's chief executive, and Don McCarthy, a Baugur director, have met the Saks management team in America and have been examining the group's portfolio. Baugur admitted in July that it had acquired an 8.08% stake in Saks. Since then, it is also believed that Mr McCarthy, who is executive chairman of House of Fraser, has held talks with Ron Frasch, the vice chairman of Saks to discuss opportunities for the department store group.

CARREFOUR switches to cross docking

As part of a larger re-structuring scheme, Carrefour is moving its logistics system towards cross docking in order to reduce stocks, with all of its French distribution centres currently converted to the new concept in a scheme that will stretch out into 2009 or 2010. As reported by Lebensmittel Zeitung, the focus initially lies on fresh foods, although eventually Carrefour plans to involve all product categories. Simultaneously, the retailer is upgrading its IT systems to make sure orders can be placed at the optimal time. Carrefour already uses cross docking in Spain, Poland and Belgium.

CASINO plans real estate disposal

Casino has announced this morning that it plans to dispose of two real estate assets, one in France and one in La Reunion, in deals expected to raise EUR650 million (USD872.1 million). Generali is to buy certain assets in La Reunion, and in France 170,000 square metres of space will be acquired by a property investment vehicle grouping several banks and in which Casino will take a stake of 10% to 18%.

DELHAIZE opens fourth store in Germany

Belgian group Delhaize yesterday opened its fourth supermarket in Germany in Cologne. The retailer has still not decided whether to further expand in Germany according to retail operations director Mark Verleye. Although, Delhaize retreated from the Czech market earlier this year, there was no retreat scenario for Germany, according to Mr Verleye.

DENNER reopens its extended distribution centre in Mägenwil

Swiss discount operator Denner (70%-owned by Migros) has finished the extension of its distribution centre in Mägenwil to one of the most modern logistics centres in Switzerland. This measure was taken in order to satisfy the increasing demand for consumer goods in its stores. Through doubling the floorspace and due to the modernisation and implementation of a new warehouse management system, the capacity in terms of volume and flow rate as well as logistics efficiency has been almost tripled. For this reason, the hardware range will be gradually transferred from the distribution centre of Egerkingen to Mägenwil from April 2008 onwards and will be finished in autumn 2008 at the latest. The warehouse management system is based on the Swisslog standard software "Warehouse Manager" and "Automation Manager". Denner has implemented the Swisslog in-house product Caddy-Pick-commissioning system (automatically controlled vehicles which allow for an efficient commissioning of suitable transport units for each store), which has been used in Switzerland for the first time.

EDEKA appoints new board member

Edeka has said it has appointed Mr Gert Schambach member of the board of Edeka AG as from 1 December this year. Mr Schambach previously worked as buying director for Schwarz Group's discounter Lidl, then changed to Dohle and, later, Rewe Group.

EL CORTE INGLES brands new mobile phone operation

In Spain, El Corte Inglés has chosen the 'Sweno' brand for its new mobile phone operation, which is expected to be launched this Christmas. The word Sweno is the result of the sounding combination between the Spanish words “sueno” (sound) and “bueno” (good).

FOZZY acquires Bumi-Market in Ukraine

As reported by RetailStudio.org, Fozzy Group has acquired local retail chain Bumi-Market operated by the company BM Trade. The acquisition was backed up by funds sourced from a UAH200 million bond (USD39 million), which Fozzy Group issued in September this year. The Bumi-Market network, spread out across the northern regions of Ukraine, comprises about 40 neighbourhood stores with an average sales area of 390 square metres. Its turnover amounted to USD48 million in 2006. Fozzy Group plans to have remodeled Bumi Market stores to its discount format Fora by the end of 2008.

J. MARTINS extends DC network in Poland

Portuguese retailer Jeronimo Martins has announced the opening of a seventh distribution centre in Lublin in May 2008. The retailer is going to invest PLN68 million (USD24 million) in this facility, which will supply around 150 Biedronka stores.

LIDL sells two thirds of land plots in Lithuania

According to reports in the Baltic press, discount chain Lidl has sold about two thirds of the 28 plots of land it acquired in Lithuania for store openings. The company, which announced last year that it was pulling out of the Baltics without having opened a single store, said it still has 10 plots of land on sale in Lithuania and only one plot in Latvia.

LUKOIL to invest in franchised petrol stations in Lithuania

Russia's oil concern Lukoil aims to invest EUR24 million (USD32.2 million) into the purchase of franchised petrol stations in Lithuania in response to the intentions of Polish oil concern PKN Orlen to buy into the Lithuanian petrol station market. "That is true, we intend to finalise these transactions, which aim to strengthen Lukoil's foothold in Lithuania, in several months," Ivan Paleichik, Lukoil Baltija CEO confirmed.

METRO GROUP to test RFID tagged promotional displays

As reported by Lebensmittel Zeitung, Metro Group and Kraft foods will start to use RFID tagged promotional displays at some Real hypermarkets in Germany in late October this year. According to Metro, optimally managed promotions are vital to the banner as up to 25% of its sales can be driven by promotional initiatives. Installation of the infrastructure needed for the test started in August 2007, involving three reader portals. One of the system's features is an alarm sign which is triggered if a display is brought to a store too early or too late. According to Markus Wagener of Metro Group Logistics, first tests have shown good reading results and improved sales. Metro currently runs a similar test with Procter & Gamble and is considering rolling the project out to further Real stores and manufacturers.

MUSGRAVE signs up buyers for Budgens stores

In the UK, Musgrave has managed to sign up buyers for all of its Budgens' stores ahead of the 2008 deadline, positioning it firmly as a wholesaler rather than a retailer. In addition, Budgens has launched its food ordering service, whereby customers can select from among 82 lines to pick up at their local Budgens stores including meat, pies, salads, canapes, cakes and wine.

PRAKTIKER and OBI settle legal dispute

According to reports in the German press, DIY chains Praktiker and OBI have settled a legal dispute regarding alleged misleading advertising which began last April. The regional court of Cologne had banned Praktiker from making sweeping statements in its advertisements, in which it claimed to be cheaper than OBI. Praktiker said yesterday that it has accepted a settlement proposed by the court, as part of which the group will donate EUR250,000 (USD301,887) to social causes.

SAINSBURY boss defends grocery code of practice

As reported by Retail Week, the chief executive of Sainsbury, Justin King, has mounted a robust defence of the controversial Supermarkets Code of Practice, "I do not buy the argument that it (the code of practice) needs more teeth. We think it is an excellent mechanism and we do not believe it is an ineffective tool. For Sainsbury's, the supermarket code of practice has been a good yardstick. It is something that we live by and, as a mechanism, it is something that helps us to resolve issues." The relationship between supermarkets and suppliers is a critical area of the Competition Commission inquiry. A Competition Commission spokesman said some suppliers have submitted documents voicing their disapproval of the code, saying they have no confidence in it to resolve disputes. However, Mr King said"There is a lack of evidence that suppliers are badly treated."

TESCO Malaysia to issue medium term notes

According to local sources, Tesco’s Malaysian operation plans to issue medium term notes worth MYR700 million (US203 million) later this month in order to fund its expansion in the country. Reportedly the company plans to hold an investors’ presentation next Tuesday.

TESCO to use canals in UK

In the UK, Tesco is to become the first major retailer to transport freight by canal as the company launched a scheme along the Manchester Ship Canal. The company statement said the move would cut carbon emissions by 80% and could trigger a dramatic increase in canal traffic as distribution companies search for alternatives to congested roads. The new scheme will run three times a week along the canal from Liverpool to Manchester, moving 600,000 litres of wine. Plans are already under way to utilise similar waterways across the country.

TESCO loses top clothing executive

In the UK, Julia Reynolds, the Central European clothing boss at Tesco, has resigned to become chief executive of online lingerie retailer Figleaves.com. It is understood that Ms Reynolds was being groomed to take over from international sourcing head, John Hoerner. In her eight years at Tesco, Ms Reynolds was responsible for creating the successful Florence & Fred brand and launching Value jeans.

WAL-MART cuts more prices ahead of holiday season

Wal-Mart Stores yesterday announced that it was cutting prices on 15,000 more items this week as the retailer tries to boost sales ahead of the holiday season. The latest price cuts follow a move at the end of September to reduce prices on hot holiday toys. It has now reduced prices on 20% more items than at this point a year ago. The new round of price cuts extend beyond toys into food, home and clothing items.

WAL-MART to implement SAP Financials

As reported by Lebensmittel Zeitung, Wal-Mart is to upgrade its finance information system with SAP Financials software in order to achieve "greater flexibility". The software is due be be introduced in several stages, with the first phase to see some existing systems replaced and others linked up with SAP Financials by 2010.

X5 RETAIL unlikely to acquire Carousel next year

In a recent interview, one of the stakeholders in X5 Retail Group in Russia, Andrey Rogachev, has said that it is highly unlikely that the retailer will exercise its option to acquire hypermarket chain Carousel. He estimated the likelihood of X5 acquiring Carousel prior to the option's expiration in June 2008 at 10%. According to Rogachev, the company's foreign investors may be reluctant to acquire more Russian assets prior to the presidential elections in March 2008.

BORDERS to open first US stand alone Paperchase store

Borders has announced it will open its first stand alone Paperchase store in the US on 24 October on Boston's Newbury Street. The new 142 square metre store will offer a range of greeting cards, stationery, gift items, seasonal decorations, gift wrap, diaries and more. Since Borders acquired Paperchase in 2004, Paperchase outlets have been added to over 300 Borders superstores throughout the US, and the company has committed to further expansion of the brand in Borders superstores as well as through larger, stand-alone stores as part of its long-term strategic plan. Borders plans to open an additional five to eight stand-alone Paperchase stores in the US by the end of fiscal 2008, but is not yet releasing specific retail locations.

DSG disappointed with Microsoft’s marketing

According to reports in the Financial Times, DSG International has lashed out at Microsoft’s marketing efforts for its Vista operating system after the European retailer was forced to slash the prices of laptops following subdued consumer demand. Kevin O'Byrne, finance director of DSG, said he was "disappointed with a lack of promotion and support" from the US software group, which had contributed to a downgrade in first-half profit expectations.

GOME signs deals with TV firms for flat-panel TVs

GOME, China's leading electronics and home appliances retailer, has signed contracts worth CNY30 billion (USD3.9 billion) with several TV set manufactures for the supply of flat-panel TVs, the company has said in a statement. GOME did not identify the manufacturers. According to the statement, GOME will also be liaising with some TV manufacturers, including Sichuan Changhong, Konka Group, and Hisense, to set up an independent division to promote original design manufacturing (ODM) products.

M.VIDEO signs deal to list shares on RTS

Russian consumer electronics chain M.Video has announced it has concluded an agreement to list its shares on the Russian Trading System Stock Exchange. M.Video plans to make an initial public offering by the end of 2007.

MOVIE GALLERY announces Nasdaq delisting notification

Movie Gallery has received a notice from Nasdaq that its common stock will be delisted due to its Chapter 11 bankruptcy filing and concerns about its ability to sustain compliance with all listing requirements for a publicly traded company. The video rental company said it would not appeal the decision. It said its common stock will continue to trade on the OTC Bulletin Board or in the "Pink Sheets" after 25 October.