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Freshly Squeezed: 23.08.19

Reading Time: 3 mins
By Published On: August 23, 20190 Comments

Coles profits slip 9.1 per cent and IKEA plans to invest $141 billion to the Chinese market. Get a healthy dose of news as we uncover the day’s top stories in e-commerce.

Nordstrom Names New Chief Merchant

The U.S. fashion retailer, Nordstrom, has named Teri Bariquit as its new Chief Merchandising Officer. This comes as the shares for the brand rose following a strong profit rise in the last quarter. Ms Bariquit will oversee the Full-Price and Off-Price merchandising areas, as well as place an important seat as a member of the company’s executive team. “We believe we have the best merchandising team in retail. Teri has been an integral part of the development of this team and she is well-positioned to lead this organization into the future as we evolve our relationships with our brand partners and deliver the best products to our customers,” said Nordstrom in a statement. “During her 33-year career with Nordstrom, Teri has demonstrated unparalleled understanding of our customer needs and has an excellent grasp on the complexities of our industry. Merchandising is in her DNA and I’ve consistently been inspired by her ability to reimagine the future.”

WPP ANZ Announce $253.5 Million Loss

The Australian and New Zealand share of the world’s largest agency holding group, WPP, has reported a $253.5 million loss in the first half of the calendar year. In an announcement from the ASX, the WPP ANZ revealed a 2,039.8 per cent drop of its net profit of $13.1 million last year. “In summary, while the group’s financial performance is disappointing, we are doing all we can to right shape the group so that we are fit for the future, to capture growth in the markets we operate and to entrench our position as a leader in creative transformation across Australia and New Zealand,” explained John Steedman, WPP interim CEO.

Coles Responds to Profit Slip

Coles has slipped 9.1 per cent in profits, taking them to $1.43 billion. The supermarket chain released its yearly result and revealed the drop in profits following its ‘spin-out’ from Wesfarmers last year. Despite the drop in profits, online sales have risen 30 per cent in the last 12 months and has introduced 1,200 new private label products on the shelves. “A sound but unspectacular result. Two highlights – Coles supermarket business grew its earnings for the first time in three years, and the dividend of a fully franked 35.5c per share (fully franked) was a little higher than expected. Looking ahead, shareholders can probably expect annual dividends of around 55c per share, which gives Coles an interesting, but not compelling yield of 4.0%. Buy at $12.00, sell at $14.00,” noted Paul Rickard at Switzer.

“We are heading into the most competitive period in Coles’ history, and there are significant industry-wide cost headwinds,” explained Steven Cain, the CEO of Coles. “With the return to profit growth in our core supermarkets division, we have made a solid start to our four-year transformation program. Delivery of our sales growth strategy and the $1 billion smarter selling program will be critical to group EXIT growth.”

IKEA Plans to Invest $1.41 Billion to the Chinese Market

Affordable furniture giant, IKEA, is planning to invest $1.4 billion into the Chinese market. Entering Shanghai in 1998, it has opened 27 stores across the country and plans to expand its operations further. This investment will mainly go towards the digitisation of the brand and building out the Chinese e-commerce platform further. “China’s home furnishing market is currently in a period of steady growth. The urbanization construction is deepening, the digital development is rapid, and the per capita disposable income is increasing, which has changed the way people live and consume,” explained Anna Pawlak-Kuliga, the President of IKEA China. In 2018, IKEA announced it would invest $1.2 billion into the country to build a ‘mixed-use’ shopping centre in Shanghai.

Lovisa’s Share Price Gain 3.6 Per Cent

Aussie jewellery company, Lovisa, has experienced a 3.6 per cent share increase, following a 1.3 per cent drop in JB Hi-Fi’s shares, 2 per cent drop in Bevilles and 0.6 per cent drop for Super Retail. “Gross margin increased 50bps to 80.5% as we continued to benefit from higher USD hedge rates across the year,” explained Shane Fallscheer, Lovisa’s Managing Director. “We have maintained our focus on margin, with continued focus on inventory management and promotional effectiveness resulting in a small improvement in margin on a constant currency basis in spite of the more challenging trading conditions.”

“Whilst we are generally happy with our execution of meeting customer needs in product and in-store execution for the year, we have not seen the same major trends in the fashion jewellery sector as we have seen in recent years that have helped drive strong comparable-store sales in prior years consistently above our target growth range,” he continued.

Catch up on yesterday’s Freshly Squeezed news here.

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