FROM THE DESK OF DEBORAH WEINSWIG

• Total US housing starts grew at a seasonally adjusted rate of 926,000, 2.5% below last year’s level. New single-family housing starts rose by 4.4%, while multifamily housing starts were down 7.1%.
• This figure came in below Bloomberg’s estimate of 1.04 million. Meanwhile, the NAHB/Wells Fargo Housing Market Index rose by four points in March, to 56.

US RETAIL TRAFFIC

• Weekly traffic in the second week of April plunged by 20.7% due to heavy pre-Easter shopping in previous weeks.
• Apparel store traffic dropped by 22.7%, the sharpest decline in 10 months.
• Electronics store traffic declined by 8.7% in the same week.

US REGULAR GASOLINE PRICES

Source: US Energy Information Administration

RETAIL EARNINGS

GBP figures translated to USD. Source: Company reports

US RETAIL HEADLINES

• Sears said that it will include two Primark stores in Massachusetts locations. Primark is a popular European fashion retailer, and Sears signed an agreement for seven stand-alone Primark stores last October.
• The other Primark-Sears locations are in Connecticut, New Jersey, New York and Pennsylvania. Six of these stores still have a Sears store presence; the exception is the Primark store at the King of Prussia mall in Pennsylvania.

• Sears Hometown and Outlet Stores announced that, by mutual agreement, CEO W. Bruce Johnson will leave the company on August 15, 2015. The company has started working with leading global executive search firm Heidrick & Struggles to search for a new CEO.
• Johnson has been CEO and President since July 2012, having previously held various senior executive positions within Sears Holdings, including Executive Vice President of Sears Holdings, interim Chief Executive Officer and President, and Executive Vice President, Supply Chain & Operations.

• Under Armour posted a 13.4% profit drop in the first quarter. Its stock was down 4.8%, to $83.52, on the day of the announcement, the largest single-day decline since April 2014.
• The company cited higher expenses from its acquisitions of two digital wellness platforms, overseas expansion, higher air-freight costs due to West Coast port disruptions and a higher tax rate as the reasons for the loss. Despite the loss, Under Armour’s major business segments grew at high-double-digit rates: footwear was up 41.4% and apparel was up 20.9%.

• Target’s 150-piece Lilly Pulitzer collection, which launched both online and in-store this past Sunday, was a huge success. The online collection sold out within hours and many store locations had shoppers lined up outside. Some stores sold out within minutes.
• Despite the popularity, Target said the collection is a limited edition and that it will not replenish inventory. Target’s online operation was challenged by the heavy traffic. At 3 a.m., the company made the site unavailable for 15 minutes.

ASIA TECH HEADLINES

• Humanoid robot Aiko Chihira now works at the entrance of Tokyo’s Mitsukoshi department store. Speaking Japanese, Chihira, which has human-like features and blinks, can also be programmed to speak in other languages, such as Chinese.
• Developed by Toshiba, Chihira has 43 motors that allow it to move. The robot is also programmed to speak Japanese sign language.

• Chinese state media disclosed that Dianhuabang, a Beijing-based startup that builds software for default dialer apps, acquired Taiwan’s StorySense Computing for US$10 million. This acquisition marks a rare Cross-Strait deal, wherein each company could provide the other with something currently missing.
• Dainhuabang holds an enormous database of phone numbers and addresses for Chinese businesses, and has relationships with several smartphone brands in China, which StorySense could not have accessed from Taipei.

• China can only ensure its information security in the long run if it keeps its market open to the best technology products, be they foreign or domestic, Huawei’s rotating Chief Executive Officer Eric Xu told Reuters.
• “From China’s perspective, to determine whether this is a good thing or bad thing we have to look at whether the market has healthy competition,” Xu said. “Is this good money replacing bad money or bad money replacing good money?”

• Alibaba has rolled out new tools for its Taobao mobile app that allow the marketplace’s 8.4 million active merchants run their stores solely from their phones.
• “The growing adoption of smartphones and mobile shopping in China means that online merchants should shift their focus from PC to mobile,” said Zhang Juo, director of Alibaba Group’s mobile business division.

• Japanese e-commerce titan Rakuten announced that it has taken a stake of less than 10% in Fanli, a Chinese online shopping discount site. The stake will constitute an undisclosed amount of series C funding for the startup.
• Rakuten stated in a press release that the stake is essentially a strategic way to tie the Chinese startup to Rakuten’s duo of US-based discount stores, Ebates and Extrabux. Rakuten acquired Ebates last September for US$1 billion.

 YouTube Sensation and Entrepreneur Michelle Phan Bringing Two of Her Businesses to Asia

• Michelle Phan, one of YouTube’s leading ladies, with over 1.1 billion total views and more than 7.6 million subscribers, will be temporarily relocating to Tokyo in order to bring two of her businesses to Asia.
• Phan launched lifestyle network Icon on March 31 through a partnership with Endemol Shine Group, the world’s largest independent production company. She plans to launch Icon in Japan and other countries in Southeast Asia by the end of the year.

 Sony Execs Lobbied Netflix to Stop VPN Users

• In e-mails leaked from Sony Pictures, executives expressed their frustration at Netflix for not stopping users in Australia and elsewhere from bypassing geoblocks to access its streaming video service.
• Australian Minister for Communications Malcolm Turnbull has said that the use of VPN services is not a breach of Australian copyright law.

EUROPEAN RETAIL HEADLINES

• Spanish fashion retailer MANGO’s 2014 turnover increased by 9.3% compared with the previous year, through its new, country-specific online stores. In 2014, 12 countries received their own MANGO website, bringing the total to 76. The group also added 90 brick-and-mortar stores as it continued to roll out its MANGO Man brand.
• This year, the company plans to invest €300 million (US$ 325 million) in new store openings and to continue the growth of its online business with new online stores in South Africa, Asia and Africa.

• Spanish fashion group Inditex has strengthened its position in China with the launch of a Stradivarius web shop on Alibaba’s Tmall.com just one week after it opened a Pull&Bear store in Shanghai.
• Stradivarius has been in China since 2010 and currently has 68 stores in 40 cities. Inditex itself has 501 stores in China, making the country the company’s third-largest market, behind Spain and Russia.

• British grocery chain Tesco reported one of the biggest pretax losses in UK corporate history this week, £6.4 billion (US$ 10.2 billion) and a net loss of £5.7 billion (US $8.6 billion—on continuing operations). The extraordinary results were impacted by £7.0 billion of one-off charges (US $10.5 billion), including a £3.8 billion write-down in existing stores and a £925 million write-down on property acquired for stores that will now not be built and a host of other write-downs.
• Group revenues for the year ending February 28, 2015, were down 3.1% at actual rates and down 1.4% at constant exchange rates. Group trading profit slumped to £1.4 billion (from £3.3 billion in the previous year), yielding a trading margin for this latest year of 2.2% (compared with 5.2% the year before).

• Despite French cosmetics company L’Oréal reporting 14% growth in turnover for the first quarter, some of its biggest consumer brands, such as L’Oréal Paris, Garnier and Maybelline, recorded sluggish organic growth of just 1.7%. The company’s only midmarket brand to perform well was The Body Shop, which increased its turnover by 4 % on a comparable basis.
• However, L’Oréal’s luxury brand group, which includes Lancôme, Yves Saint Laurent and Kiehl’s, performed much better, witnessing a 7.5% rise in organic growth, which helped the group to boost overall figures.

• Primark reported that first-half revenues were up 12% at actual exchange rates and up 15% at constant rates, but that comparable sales were level with last year, due to unseasonably warm autumn 2014 weather in northern Europe. In addition, markdowns led operating margins to decline by 0.5 percentage points, to 12.6%, in the first half.
• The company said it saw very strong trading in stores that were opened over the last 12 months.

• UK department store House of Fraser reported strong comparable sales growth of 5.8% for the year ended January 31, 2015; the results were helped by growth of 32% in online sales and growth of 2.2% in in-store sales. Adjusted EBITDA was up 7%, to £64 million.
• The retailer has noted growth in all product categories and highlighted its improved premium brand offering and refurbished stores as two reasons for the record year-end sales and profits.

• Chinese tourists took advantage of the weak euro last month and spent a record amount on luxury goods in Europe. The 122% increase in spending came after a 52% increase in February, bringing the first-quarter total to 67%. Spending had increased 32% in the fourth quarter and 18% in full-year 2014.
• The most popular items were watches and jewelry; sales of these items increased by 67% in March compared with 32% in February. Leather goods also performed well, with sales increasing 50% compared with 24% the previous month.

• After being declared bankrupt in January 2013, HMV has now overtaken Amazon as Britain’s biggest music retailer. HMV saw a 12% increase in physical music sales in the 12 weeks ended March 15, according to Kantar Worldpanel.
• Popular British artists such as Ed Sheeran and Sam Smith have been credited with boosting physical music sales over the past quarter.

LATAM RETAIL HEADLINES

• A recent survey conducted by FT research service LatAm Confidential found that Brazilians are favoring cheaper and lower-quality items than they were in the previous quarter.
• Categories measured included clothing, food, personal care products and electronics.
• The survey also showed a decline in preference for premium brands.

• Walmex’s first-quarter 2015 revenues increased 9% year over year, to US$7.3 billion (MXN$111.9 billion).
• Same-store sales increased 4.9%, and the company opened 11 new stores in the first quarter.
• Net profit was MXN$5.558 billion, also up 9% year over year.

• Fogo de Chão, which operates 26 restaurants in the US and nine in Brazil, filed for an IPO on April 20.
• The company plans to raise $75 million and list its shares under ticker symbol “FOGO” on the NASDAQ.
• The restaurant offers more than 20 cuts of meat, with Brazilian-style table service.

• Brazil’s congress approved a constitutional amendment establishing a new division to receive revenue from value-added taxes (ICMSs) on Internet purchases.
• ICMS tax revenue will be required to remain in the county in which the products and services originate, and Brazil’s wealthiest counties are São Paulo and Rio de Janeiro. The change will halt the current practice of double taxation.
• Under a revenue-sharing plan, states where Internet products and services originate will receive 80% of the tax revenue, and states where services are delivered will receive 20%.