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European Retail Briefings - October 2007

HIGHLIGHTS: OCTOBER 2007
Grocers
Clothing retailing
Multi-sector retailing
Mixed goods retailing
NEWS ANALYSIS
 BAKERS (RETAIL)
UK: Greggs improves LFLs further in Q3
UK: Thorntons posts solid start to the year
 CO-OPS (RETAIL)
UK: Co-op to spend £200m on refits and rebranding
 GROCERS
Australia: Aldi to open 80 new stores down under
Australia: Woolworths records Q1 success
Belgium: Colruyt sees room for growth
Europe: Carrefour to launch c-stores in Poland
France: Price hikes to hurt Auchan’s FY profit
France: Carrefour posts weak Q3
France: Casino to sell property assets
Lithuania: Lidl performs Baltic U-turn
Netherlands: Laurus posts nine-month sales decline
Netherlands: Sligro Q3 LFLs grow by 4.2%
Netherlands: Schuitema increases sales in Q3
Russian Federation: Magnit sees nine-month sales rise
Russian Federation: Russian grocers agree price-freeze
Sweden: Axfood nine-month LFLs edge ahead
UK: Ocado
…targets expansion in the north
…as losses put flotation in doubt
UK: Sainsbury’s
…to relocate HQ
…as board expected to back takeover bid
…while LFL sales growth slows in Q2
…before Delta Two’s bid hits problems
UK: Tesco
…to take clothing online
…as sales growth slows down in H1
UK: Waitrose
…MD attacks Tesco
…before feud escalates
United States: A&P losses widen in Q2
United States: Cost cuts boost Safeway profits in Q3
United States: Supervalu Q2 sales down, profits up
United States: Whole Foods stand by their man
 CLOTHING RETAILING
Europe: Tommy Hilfiger considering £2bn European float
Germany: Primark plans to enter Germany
Sweden: Lindex accepts Stockmann bid, KappAhl withdraws offer
Sweden: KappAhl reports record Q4, FY results
UK: Bhs increases FY profit by 3%
UK: Burberry’s LFLs rise 11% in H1
UK: Monsoon bought out, sees sales fall
UK: Moss Bros posts loss in H1
UK: Rubicon boosts Mosaic H1 sales
UK: Ted Baker reports strong H1 retail sales
United States: Topshop to go alone in US expansion
 FOOTWEAR RETAILING
Middle East: Kurt Geiger ventures into the Middle East
 ELECTRICAL RETAILING
Europe: DSG increases LFLs in H1, Italy still problematic
 DIY RETAILING
UK: Focus sells off 41 stores
UK: Travis Perkins updates Wickes like-for-likes
 CARPET RETAILING
UK: Carpetright
…receives revised bid, updates trading
…as Harris reveals it may derail Harris’ bid
 FURNITURE RETAILING
UK: ScS sees FY profit, sales fall
United States: Bed Bath & Beyond improves LFLs in Q2
 HOME SHOPPING
Germany: Arcandor in exclusive talks over Neckermann sale
UK: Asos sees sales rocket in H1
UK: Findel sees sales jump, will not demerge
UK: N Brown LFLs jump 10.6% in H1
United States: Hot Tuna opens online store in US
 MULTI-SECTOR RETAILING
Finland: Kesko sales up 10.2% in Q3
France: LVMH posts solid nine-months results
Germany: Hugendubel, Weltbild to run Arcandor’s book departments
Germany: Douglas posts strong FY sales
Germany: Rewe reiterates growth plans
 BOOK AND STATIONERY RETAILING
UK: Clinton Cards FY profit soars
UK: WH Smith FY profit up, LFLs down
 SPORTS AND LEISURE GOODS RETAILING
UK: JJB H1 profit falls by 38%
 JEWELLERS
UK: Goldsmiths
…reports FY losses
…as Baugur pursues Piasecki’s stake
UK: Theo Fennel trading up in H1
 HEALTH AND BEAUTY RETAILING
Germany: Schlecker acquires Ihr Platz
United States: Rite Aid loss widens in Q2
United States: Walgreens sees profit decline in Q4
 GARDEN CENTRES
UK: ‘Tesco will not harm Dobbies’ growth plans’
 TOYS AND GAMES RETAILING
UK: Bear Factory boosts Hamleys’ FY profit
 MASS-MERCHANDISERS
United States: Costco sees FY LFLs rise
United States: Mixed fortunes for Wal-Mart and Target
United States: Wal-Mart
…in early holiday push
…then ups ante with further price cuts
…and moves into banking in Mexico
…before revealing Walmex Q3 profit boosted by cost reductions
 MISCELLANEOUS SPECIALIST RETAILING
UK: Bridgepoint considers sale of Pets at Home
UK: Halfords increases LFLs in H1
Jessops chief executive resigns
 MIXED GOODS RETAILING
Japan: Wal-Mart
…to take full ownership of Seiyu
…as losses grow
UK: Instore narrows losses in H1
UK: Strong performance for Mothercare in Q2
UK: Woolies warns of toy shortages at Christmas
United States: Family Dollar sees FY LFLs rise by 0.9%
 DEPARTMENT STORES
UK: Beales announces new chief executive
UK: Debenhams posts full year like-for-likes fall
UK: HoF turns to smaller format stores
UK: Original Factory Shop up for sale
United States: Baugur linked to Saks takeover
United States: Kohl’s unveils growth plans
 DOLLAR STORES
United States: 99 Cents sales rise in Q2, warns for loss
United States: Dollar Tree loses Kleeberger
ECONOMIC NEWS
EU retail sales grow 1.0% in August
Germany: Retail sales fall in August 2007
Italy: Italian retail up in August
Netherlands: Dutch retail sales increase in August
UK:
Strong retail sales growth in September, says ONS
CBI: sales growth continues to slacken in September
Price promotions boost retail sales in September, says BRC
MARKET ANALYSIS: HOME SHOPPING IN EUROPE
 DENMARK
Non-store retailers growing steadily
Economy in good shape
E-commerce – the largest channel
High penetration of Internet users
Strong growth forecast
 ITALY
Italy’s home shopping market remains underdeveloped
Direct sales dominate home shopping market, but e-commerce gaining pace
Mail order market shows no growth
E-commerce shows strong growth
Mail orders are forecast to underperform total retail sales
 POLAND
Home shopping
Traditional mail order losing out to other selling methods
E-commerce growing rapidly
Direct sellers still very popular
A market set to grow steadily
 SWEDEN
Well established home shopping sector
Most advanced e-commerce market in Europe
Traditional mail order in decline
Growth potential for direct selling
Non-store retailers’ growth set to continue
 UK
Brits among keenest home shoppers
E-commerce takes over
Figure 1: UK: Mail order and e-commerce sectors – sales performance, 2002-06
A mixed bunch online
Stores the biggest e-tailers
Figure 2: UK: E-commerce sector – estimated breakdown, 2006
Catalogues go online
A fragmented sector
Figure 3: UK: Leading non-store retailers: market shares, 2005
Home shopping specialists underperform
And will continue to do so
 AUSTRIA
Home shopping market is large, but increasingly mature
Mail order is the most mature sector, and is losing share
Direct selling market declining
E-commerce shows consistent growth
Non-store retailers forecast to underperform total retail sales
 BELGIUM
Belgium’s home shopping market boosted by e-commerce
Mail order’s market share slipping steadily
Direct selling also losing share
E-commerce has shown consistent growth
Non-store retailers forecast to outpace total retail sales
 CZECH REPUBLIC
Small home shopping market worth €692 million in 2005
E-commerce the largest segment
Direct selling grows
Mintel forecasts fall in home shopping’s share of all retail sales
 FINLAND
Distance doesn’t make home shoppers
Traditional channels still in lead
Pure players rule online
A polarised market
Home shopping to keep its stand
Online has room to grow
 FRANCE
French home shopping market
Mail order sector
Direct selling
E-commerce
Forecasts
 GERMANY
Home shopping showing steady growth…
…but e-commerce really taking off
Traditional mail order in decline
High penetration of Internet users
 HUNGARY
Home shopping market small
Mail order was the smallest sector
Direct selling market
E-commerce
Non-store retailers’ sales forecast to outperform total retail sales
 IRELAND
Ireland’s home shopping market is relatively small
E-commerce shows strong growth
Mail order market shows no growth
Non-store retailers’ sales are forecast to outperform total retail sales
 NORWAY
Average home shoppers
E-tail takes over
Direct selling small but growing
Bright prospects for non-store retailers
 PORTUGAL
Home shopping market small
Rural population holds back the market somewhat
Mail order dominated
Direct selling market
E-commerce shows strong growth
Non-store retailers forecast to outperform total retail sales
 SPAIN
Small home shopping market worth €2.4 billion in 2005
Mail order nudges ahead of direct selling
Direct selling better established
E-commerce growth slows
 SWITZERLAND
E-commerce provides a boost
Convenience of home shopping
The future of home shopping
COMPANY PROFILE: REDCATS
Figure 4: Redcats: Sales as share of non-store retailers’ sales in Europe, 2002-06
Strategic evaluation
Background
Financial performance
Figure 5: Redcats: Group financial performance, 2002-06
Figure 6: Redcats: Sales by division, 2006
Big books
Retail offering
Brands
Product offer
Figure 7: Redcats: Sales by major product category, 2005
e-commerce & home shopping
Figure 8: Redcats: Websites by market, 2007
M-commerce development

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