FROM THE DESK OF DEBORAH WEINSWIG – The Little Jet That Could…

A new jet has landed right in the sweet spot of retail! This new jumbo liner, named Jet.com, launched publicly this week after a stealth flight, and it could be a huge disruptor to established e‑commerce companies and warehouse clubs. Jet could match them on the metric that consumers care about most—price—but could outmatch them by offering optimized shipping and great customer service. For the mobile-inclined, Jet also has a smartphone shopping app.

• Sales for previously owned US homes reached an eight-year high. Closings on existing homes climbed to 3.2% to a 5.49 million annualized rate, the fastest since February 2007.
• “Lawrence Yuan, the NAR chief economist said “the mareket is tighter compared to last year. Home values are rising too fast and wee need more supply to bring the price growth down.
• Median price of an existing home rose 6.5% year-over-year to $236,400.

US RETAIL EARNINGS

Source: Company reports

ESUS REGULAR GASOLINE PRICE

Source: US Energy Information Administration

US RETAIL HEADLINES

Nike hands CEO Mark Parker $30m to stay for five years

• On July 21, Nike announced an agreement to give Chief Executive Mark Parker a $30m stock award to remainin the position CEO for next five years.
• Under Parker’s leadership since 2006, Nike’s shares have surged 438%, far exceeding the 69% achieved by the Dow Jones Industrial Average over the same period. Nike has benefited from investments in product technology, expansion abroad, and an increasing popularity of athletic wear as casual attire.

Amazon is becoming Macy’s biggest threat

• Following Amazon’s strategic Prime Day, analysts believed the e-commerce giant will claim the tittle of top apparel retailer.
• Amazon doesn’t pay overhead costs for retail stores, thus can offer apparel at lower prices. Macy’s JCPenny and Kohl’s have reported mediocre results in recent months as apparel spending declinesit – lowering 1.5% in June. Millennials are spending more on expenses like rent, cellphones and personal services than young people were a decade ago, according to Morgan Stanley.

PayPal Begins Trading Monday as an Independent  Firm

• Paypal began trading as a publicly traded firm separate and independent from eBday Inc. On June 30th, the online payment platform posted a 16.1% increase in net revenue to $2.26 billion from $1.95 billion and net total payment volume for the quarter rose 19.8% to $65.9 billion. Paypal has more than 169 million active customers.
• Paypal is highlighting its One Touch product for payment on a mobile device and or a desktop. Payment can be made via a single touch, avoiding the need to input any information or card numbers.

Jet.com launches new e-commerce model to rival Amazon and Walmart

• Fueled by $225 million in funding, the New Jersey based e-commerce company will charge an annual membership fee of $50 to gain access to discounted items based on volume and shipping distance. With an average savings of 10-15% on most items, Jet’s target market is the cost-conscious consumer.
• According to Forrester Research, e-commerce sales totaled $300 billion last year and will surge to $418 by 2018. The pre-launch valuation is $500 million; CEO Marc Lore hopes to eclipse $20 billion in product sales over five years.

National Retail Federation Revises Annual Economic Forecast

• The National Retail Federation ()lowered its retail sales forecast for 2015 due to unexpected slow growth recorded during the first half of the year. However, NRF expects sales to gradually increase through the remainder of the year.
• CEO Matthew Shay is optimistic that consumer spending in the second half of the year will benefit from improved housing and labor markets coupled with lower energy costs. Sales grew by 2.9% during the first half of 2015 and are expected to grow at a more positive pace of 3.7% over the next five months. Retail remains the nation’s largest private sector employer, employing 42 million working Americans.

Apple’s Market Cap Loses $60 Billion After iPhone Sales Disappoint

• Apple reported a 38% profit surge on Tuesday, aided by strong sales for the company’s latest iPhones sales. While Apple sold 35% more iPhones this quarter compared to the previous year, sales missed analysts estimates. iPhone accounted for nearly two-thirds of Apple’s revenue – any signs that growth is reaching a peak is a major concern for investors.
• Following the earnings report, Apple’s shares fell 7% in after-hours trading, erasing roughly $60 billion in market value. Shares fell 5.2% early on Wednesday. On a brighter note, iPhone sales rose 87% with revenue doubling to $13.23 in greater China, contributing to the aforementioned profit surge.

ASIA HEADLINES

None of China’s Virtual Telecome Operators Are Making Money

• Last year, internet companies were allowed to run their own telecom networks, though they still have to least network infrastructure from one of the “big three” state-owned giants, China Telecom, China Unicom, and China Mobile.
• “Although none of the virual telecoms is losing money, not one of them is making money either,” Chinese telecom expert Mo Guangwei told Yicai, a Chinese newspaper. Virtual telecoms were offered “wholesale” prices higher than the big three’s retail prices.

Huawei Says Smartphone Shipments Jumped 39 Percent in First Half

• China’s Huawei Technologies Co. Ltd, the world’s fourth-biggest smartphone manufacturer, on Wednesday said it shipped 48.2 million smartphones globally in the first half of 2015, a 39 percent rise from a year before.
• Shenzhen-based Huawei, which competes with Chinese smartphone makers Lenovo Group Ltd and ZTE Corp, recorded a 69 percent increase in its consumer business group revenue to US$9.09 billion thanks to strong sales from high-end smartphone models.

KFit, Asia’s Answer To ClassPass, Lands $3.25 Million Led By Sequoia

• KFit, founded by former Groupon APAC head Joel Neoh, arrived in Asia Pacific recently, aiming to make gyms and fitness more accessible in the region, has landed a $3.25 million funding round led by Sequoia.
• Right now, KFit has around 100 staff, has signed up more than 1,000 partners across Asia Pacific. That includes fitness studios and gyms, as well as access to sports facilities such as tennis courts.

Singapore Startup Looks to Help Banks Catch Up to Mobile

• com has unveiled an app that lets users compare credit card deals, extending its online service to the mobile platform in Singapore where its founders say banks still lack mobile-friendly processes.
• com’s Singapore database compares some 130 credit cards. Its U.S. site compares about 600 encompassing most major cards in the country, which has more than 1,00 credit cards. Get.com has successfully signed up 200,000 card applicants for banks in the U.S. since 2011, getting a cut out of each approved application..

Singapore Bitcoin Startup Gets $4M from Naspers and Digital Currency Group

• South African media conglomerate Naspers, through its payment processor subsidiary PayU, has led a US$4 million series A round in BitX, a Singapore-based Bitcoin startup operating a wallet, several exchanges, and merchant integration services.
• Digital Currency Group, an investment firm focusing on Bitcoin enterprises, joined the round too. It’s founded by Barry Silbert, a known name in the cryptocurrency world. The firm has backed prominent Bitcoin startups like Bitpay, Coinbase, and Circle

Chinese Hardware Startup Sleepace Nabs $7M to Help You Get More Beauty Sleep

• Chinese hardware startup Sleepace, maker of a gadget that monitors people’s sleep, revealed that it has secured US$7 million in series B funding. The investment was led by retail chain Luolai Home Textile and followed by ecommerce titan JD.
• Sleepace’s sole device right now is RestOn, which lies across the width of a bed in order to monitor a user’s sleep cycles, movements, respiratory rate, and heart rate. It costs RMB 1,099 (US$177). The quantified sleep data is presented in an accompanying app.

Alibaba, Unilever Announce Partnership to Reach Chinese Consumers

• Chinese ecommerce company Alibaba Group Holdings Ltd announced on Sunday that it had signed a strategic partnership agreement with Unilever NV to help the consumer products group reach more Chinese shoppers.
• Unilever makes more than half its sales in emerging markets. It reported stronger-than-expected sales in the most recent quarter and said it saw signs of improvement in its major markets such as the United States, China and India.

SoftBank to Shut Down Venture Capital Arm

• Nikesh Arora, President at SoftBank, looks to focus SoftBank’s investment strategy on acquiring large minority stakes in breakout privately-held businesses and backing them through a sale or IPO.
• “As we look at the future for the next tens of years, we believe that the way to preserve the long-term sustainability of SoftBank is to be large, minority shareholders of many assets. We believe that it’s less crowded in the large-check marketplace, “Arora told Re/code..

EUROPEAN RETAIL EARNINGS

EUROPEAN RETAIL HEADLINES

Amazon, Reportedly, To Start Grocery Delivery Service In UK Soon

• Amazon Fresh, the grocery delivery service run by the online retail giant, is set to launch in the UK later this year, as per several news reports. Currently, this service is available only in a few cities in the US.
• Britain’s leading supermarkets, Tesco and Sainsbury’s, and the delivery service Ocado, will be the main competition for Amazon Fresh. The grocery delivery market in the UK is considerably more developed than in the US, so this move for Amazon could prove to be quite lucrative.

AO Revenue For The First Quarter Is Up 6%

• AO World, the online home appliances retailer, has reported revenue growth of 6.5% in the UK, in the three months to June 30. Sales increased by 11.2% and orders by 13.9% for this period.
• Sales in Germany are continuing to grow “satisfactorily”, according to the company. It has started its first national TV ad campaign in Germany, and has plans to occupy a new European distribution facility in Cologne by 2017, as per its strategic growth plan.

Made.Com Raises €55 Million ($60 Million) In Investments

• Online furniture store, Made.com has raised an investment of €55 million ($60 million) for further growth in the UK. Made.com specializes in retailing design furniture and accessories. This investment will be used to increase its product range, develop more marketing plans, and most importantly, to expand its technology.
• The company was started in 2010 and it has reached a turnover of €60 million ($65 million) in the last three years. 75% of its turnover is from the United Kingdom; it also operates in Italy, Belgium, France, the Netherlands and Germany.

Zalando Shows Accelerated Growth In Q2 Preliminary Reports

• Germany’s leading online fashion retailer, Zalando, reported growth in group revenues, to €727-738 million ($790-$802 million), in the second quarter of 2015. This growth was significantly beyond expectations, and was sustained by investments in Zalando’s long term customer propositions.
• The adjusted EBIT is expected to be around €22-37 million ($24 - $40 million), corresponding to an EBIT margin of 3%-5%. Operating performance was a key driver of its profitability, but a temporary increase in costs affected the EBIT margin.

Victoria Plumb is Now Victoria Plum

• The online bathroom retailer, Victoria Plumb, has re-launched itself as Victoria Plum, with a new brand image and website, as it gets ready to expand into bedroom furniture.
• The new website has been optimized for mobiles and tablets, to give the consumer a better user experience. It also offers guidance on buying bathroom material and tailored recommendations based on customers’ requirements and bathroom size.

DFS reports 7% growth in sales as it announces plans to further expand in the Netherlands

• The UK’s second biggest furniture retailer, DFS, reported a 7% increase in sales for the financial year to date. It also announced plans to open two more stores in the Netherlands, after opening one near Amsterdam last year. DFS was acquired by Advent, a private equity firm in 2010 and was floated on the stock market in March this year, with a valuation of £543 million ($590 million).
• With increased investments in a more advanced website and fulfillment, online sales accounted for nearly 10.9% of total sales. DFS also stated that its acquisition of Sofa Workshop and Dwell added to revenue growth by 1%..

Harvey Nichols Withdraws From Baku Just Months After Launch

• Just months after Harvey Nichols’ high-profile launch in the capital of Azerbaijan, it has decided to split with licence partner Perfomans and withdraw from the venture. The 110,000 square-foot department store showcases more than 500 international designers across womenswear, menswear and kidswear. Spanning seven floors, the store also offers other service such as stylists, personal shoppers, restaurants and a beauty hall.
• Harvey Nichols is understood to have made a decision to withdraw within three weeks of trading, but the company had to give the licence partner two months’ notice. A spokeswoman stated that the licence agreement with the store operator has been terminated. The store is still purportedly trading but it is uncertain under what name

Hermes Reports Sales Growth of 21%, on Strong Japan Demand

• Hermes International SCA, the French luxury goods firm, reported a growth of 21% in sales because of robust demand from Japan. The company stated that sales grew to €2.3 billion ($2.5 billion) in the first half of the year, compared with €1.9 billion ($2.1 billion) in the same period last year.
• In Japan, sales grew 26%, and at constant exchange rates, this translates to 20%. The company said that the rest of Asia, however, reported lower growth. It did not disclose the profit figures for the period, but stated that the weak euro could slightly decrease the profit margin in comparison to the margin same time last year.

LATAM HEADLINES

Latin American E-commerce nears US$50 Billion

• Retail e-commerce in Latin America is expected to grow 23.9% this year to reach nearly $50 billion
• Brazil is expected to contribute nearly $20 billion of this figure, and e-commerce contributes the greatest share of the retail market in the country
• The fastest growth is expected in Argentina, where e-commerce sales are expected to increase by 40% to nearly $5 billion

UBM Looking to Acquire Intermoda, Mexico’s Largest Textiles Fair

• Global event marketing and communications firm UBM is currently holding talks to acquire Intermoda Fashion Group SA, according to WWD
• The two companies are discussing a full sale, a 50–50 joint venture, or a marketing alliance
• One shareholder sized Intermoda’s annual revenues at $5.2–6.5 million and generating $3.1 million in net profit

Mexican Shoppers Favor Traditional American Brands

• Defunct American brands blockbuster, Woolworth and Sears are alive and well in Mexico
• Grupo Elektra SAB paid $31 million for 300 Mexican Blockbuster stores in 2014
• Woolworth, whose US stores closed in the 1990s, plans to open three new stores in Mexico next year
• The Mexican Sears is controlled by Carlos Slim’s Grupo Sanborns SAB and plans to open five new Mexican stores this year; same-store sales grew 7.1% in 1Q2015.

Mexico City is Becoming Hip

• Mexico city is gaining a fashion edge due to a rising number of affluent professionals which is attracting luxury and designer brands to open shops in the capital
• Moreover, an increasing number of international professionals are based in the city, which is making Mexico City more international and nurturing its fashion awarenessThe new Downtown Hotel and upgraded Madero promenade, as well as a citywide branding campaign, have attracted foreign shops to the fashionable La Roma quarter and the upwardly mobile Colonia Juárez area.

Purchasing Power of Venezuelan Citizens Declines with Bolivar

• Venezuelan President Nicolás Maduro instituted a 30% wage increase in May. However, Venezuela’s currency has declined by 88% over the past year.
• One US dollar can buy 630 bolivars on the black market, which puts the monthly minimum wage of 7,422 bolivars equal to slightly more than US$11.
• The currency decline has created shortages of milk and baby formula, and many everyday items cost more than a month’s wages

More Downgrades than Upgrades in Brazil

• In the second quarter of 2015, corporate debt downgrades outpaced upgrades by a factor of 2.5:1 in Brazil.
• Brazilian issues represented 28% of the corporate downgrades and 83% of Latin American corporate downgrades in the quarter.
• The downgrades were led by the food, beverage and tobacco sector, which represented more than 21% of the downgrades. More than half of those were for Brazilian sugar and ethanol companies.