FROM THE DESK OF DEBORAH WEINSWIG

This week, we attended the Summer 2015 Demo Day of the Entrepreneurs Roundtable Accelerator, which was held in the stunning modern lobby/media center of IAC’s headquarters in New York City. The building was designed by Frank Gehry and, when construction was completed in 2007, it contained the world’s largest high-definition screen. The Demo Day event was standing room only, and 10 companies presented their 10-minute pitches to investors and the startup community.

Dezignable

• In the first six months of fiscal year 2016, Tesco’s group operating profits before exceptional items fell by half year over year, to £354 million (US$543 million).
• Investment in pricing and service in the UK, coupled with lower UK sales and legislative changes in Hungary, hit the retailer’s profits.
• Tesco’s UK comparable sales declined by 1.1%, despite volumes and in-store transactions growing by 1.4% and 1.5%, respectively.

US RETAIL HEADLINES

• Staples, the largest US office-supply chain, announced it will be closed on Thanksgiving Day this year. The company will open stores at 6 a.m. the next day for Black Friday, the traditional kickoff to the holiday season.
• Retail traffic fell by 5.2% over Thanksgiving weekend last year, as consumers spread their spending over a longer period, NRF spokesperson Kathy Allen said.

Sam’s Club Announces Major Strategy Changes

• Sam’s Club CEO Rosalind Brewer announced expansive personnel and strategy changes centered on merchandising. The four key elements of the new strategy are to grow with higher-household-income members; to drive relevant merchandise and deliver better value; to acquire and retain the right members in the club and increase their spending; and to transform the club experience with digital.
• The implementation of the new strategy at Sam’s Club involved at least nine personnel moves to reduce the layers of management. The company also expects to develop a broader, integrated private label strategy.

Pinterest Adds New Retailers with “Buy Button” Expansion

• Pinterest unveiled a major expansion of its “buy button” at the Shop.org Digital Summit. The function will be added by three new e-commerce platforms, thousands of Shopify stores, and major retailers such as Bloomingdale’s and Wayfair.com.
• The number of buyable pins on Pinterest has grown to more than 60 million since the first ones were launched in June, the company said. Pinterest’s expansion of its embedded commerce comes after YouTube announced shopping ads last week and Twitter announced it would expand its “buy now” button to any retailer across the country.

Jet.com Ends $50 Membership Fee to Broaden Appeal

• Three months after it launched to the public, Jet.com, the e-commerce site from Diapers.com founder Marc Lore, is changing its business model. Lore announced that the company was dropping its $50 membership fee. He told Re/code that Jet did not need to have prices 10%–15% lower than other online stores, and that “it turns out 4%–5% is enough of a discount for shoppers.” This strategy will increase the pool of potential shoppers.
• Jet executives said the change will fix the early perception that Jet was a discount site, which has kept premium brands away. The company’s leadership is preparing to speak with prospective investors in a series B funding round, which would be tied to a valuation of at least $2 billion, according to Fortune.

TJX Board to Elect Ernie Herrman as CEO

• TJX’s board of directors will elect Ernie Herrman as CEO, effective January 31, 2016, the start of the company’s fiscal year. Herrman has already been elected Director and will continue as President.
• Carol Meyrowitz, the Chairman and CEO for the past nine years, will become Executive Chairman of the Board at the time of the transition. She will remain an active executive and an advisor to Herrman, according to her new three-year agreement. TJX operates 3,461 stores in seven countries. They include T.J. Maxx, Marshalls and HomeGoods.

ASIA HEADLINES

HTC Blames Weak Android Sales for NT$5.1 Billion 2Q Loss

• HTC, a Taiwanese smartphone giant, reported an operating loss of NT$5.1 billion for the three months ending June 30, with an operating margin of (15.6)%. HTC’s quarterly net loss after tax was NT$8 billion.
• The company said it expects to invest in “promising new product areas,” including virtual reality; HTC is currently working with more than 1,000 developers on content creation for applications in gaming, entertainment and education.

Medtech Firm Konsula Catches Seed Funding from East Ventures

• Indonesian healthcare startup Konsula announced that it has secured an undisclosed amount of seed funding from local venture capital firm East Ventures. The startup bills itself as the answer to Indonesia’s disparity in healthcare services.
• “Konsula smart search is designed to connect patients with the most suitable doctors, which is possible due to filters such as price, location, specialization, schedule, [and more],” said Shinta Nurfauzia, the firm’s CEO. “It enables users to book appointments and submit reviews at their fingertips.”

Sharp’s Crazy New Smartphone Is…a Robot

• The 7.7”, 0.9-lb. Robohon (an amalgamation of “robot” and “phone”) has a 2” touch screen and a quad-core CPU, and can connect to 3G, LTE and wi-fi networks. It can sit, stand, walk, dance and even beam a movie or slideshow on the wall with its built-in projector.
• Robohon also learns its users’ likes, dislikes, daily habits, and frequently visited places. Its facial and voice recognition functions allow it to tell users apart, so it will respond differently when talking to a user and his or her spouse or children.

Graphic Design App Canva Paints a Bright Future with $15 Million Series A Funding

• Australian graphic design toolmaker Canva raised US$15 million in a series A funding round led by US-based Felicis Ventures. Existing investors Blackbird Ventures, Matrix Partners and Vayner Capital also contributed, as did American actors Owen Wilson and Woody Harrelson.
• Canva makes a suite of tools for the web and the iPad that make graphic design easy. The tools enable users with no design skills to create a professional-looking image to use on their website or social media.

Flipkart Launches Hyperlocal Delivery App Nearby

• Indian e-commerce giant Flipkart has expanded into the hyperlocal space by launching Flipkart Nearby. Currently operating in 14 Bangalore locations, the stand-alone app is used to deliver daily-use items in categories such as branded food, groceries and staples, beverages, household supplies, personal care, health and wellness, baby care, and dairy.
• In India, the hyperlocal market is on fire. Last month, Snapdeal invested in PepperTap; taxi-hailing app Ola launched Ola stores; and Zomato backed hyperlocal delivery startups Pickingo and Grab.

This Chinese Company Is Going to Beat Xiaomi to the Punch in America

• Letv has rapidly branched out into everything from smartphones and smart TVs to electric cars over the past few years. Recently, Letv sold more than 500,000 smartphones and more than 350,000 smart TVs in a single day as part of a sales event on its Lemall online store.
• Unlike Xiaomi, Letv is plunging into the US market. Later this fall, the company will launch its Lemall online shop in the US. Its film production arm already operates in the US, and it has based its electric car team out of Silicon Valley.

Toyota Unveils Self-Driving Car

• Toyota unveiled a car that can drive itself along the highway. The car is a modified Lexus GS that relies on sensors to navigate roads, merge lanes and overtake other vehicles.
• The car switches to fully automated mode only once it reaches a highway and passes a sensor, but Toyota hopes the technology will help it build an entirely driverless car, as well as reduce accidents and congestion.

The Alibaba Effect: Snapdeal Blends Offline and Online Shopping

• Janus, Snapdeal’s latest launch, is an omni-channel platform that integrates all aspects of e-commerce, from ordering a product online to customizing it and getting it delivered offline. The Janus launch follows Snapdeal’s earlier acquisition of e-commerce management software company Unicommerce.
• The launch will ideally lead to faster delivery rates and a variety of cool new offline services, including product try-ons and customization. Janus will be available across 70 cities in India.

EUROPEAN RETAIL EARNINGS

Source: Company reports

EUROPEAN RETAIL HEADLINES

Uniqlo’s First Benelux Store Opens in Antwerp

• Japanese casualwear retailer Uniqlo has opened its first Benelux outlet, in Antwerp, in a bid to become the world’s biggest fashion chain by 2020. Uniqlo has 1,600 stores globally and is owned by Fast Retailing, the fourth-largest clothing retailer in the world (after Inditex, Gap and H&M).
• In Europe, Uniqlo currently has an e-commerce site only for the UK, but it intends to open sites for the rest of the region soon. Takao Kuwahara, COO of Uniqlo, said that the company plans to grow its online presence further by opening localized websites, and that it wants “to be present in all important European cities.”

Zalando Plans Expansion by Building Up Tech Strength

• Zalando, a fast-growing online retailer from Germany, plans to hire more than 800 technology specialists next year as part of its expansion plans. One of the cofounders, Rubin Ritter, reportedly said that Zalando is developing its IT expertise for its “long-term competitive advantage.”
• The company has become Europe’s largest online-only retailer, and it already has about 800 employees working in its technology department.

Plastic Shopping Bag Charge Takes Effect in England

• In a move to curb plastic waste, the government in England has introduced a levy of 5p (US$0.08) per shopping bag given out at supermarkets and large retail stores. Retailers are urged to spend the money raised on charitable causes. The move is expected to cut the 7.6 billion plastic shopping bags given out to shoppers each year.
• England is the last of the UK nations to introduce this tariff. Currently, the charge applies only to larger retailers that have 250 or more employees. Smaller shops may choose to charge shoppers for plastic bags, but are otherwise exempt from the rule.

Ocado Launches Major Recruitment Drive

• British grocery pure play Ocado announced plans to recruit 1,798 permanent staff before December; the majority of the new hires will be delivery drivers.
• The company said the recruitment was unrelated to a speculated deal to sell its services to an international retailer. CEO Tim Steiner previously set the end of this fiscal year as the target date for sealing a technology and logistics partnership with an international retailer.

European Retail Sales Volumes Show Solid Growth

• The European Union grew sales volumes by 2.6% year over year in August, according to data from Eurostat. Four countries led the growth, with sales volumes up 7.7% in Ireland, 5.7% in Poland, 5.5% in Latvia and 5.4% in Lithuania.
• The biggest declines in volumes were recorded in Luxembourg (down 12.6%), Bulgaria (down 1.9%) and Belgium (down 1.7%).

Tesco’s First-Half Operating Profits Plunge

• Tesco reported that group sales were down 1.9% in British pounds, or down 0.3% in constant currencies, for the half year ending August 29. UK comps were down 1.1% and international comps were up 1.0%, on a continuing operations basis.
• Group operating profit, pre-exceptionals, was down 54.6% year over year, to £354 million (US$543 million). The figure was below expectations, and was impacted by investment in pricing and service in the UK, lower UK sales and legislative changes in Hungary.

LATAM HEADLINES

Brazil’s Economic Woes Hurting International Companies

• Companies such as DuPont, Monsanto and Brink’s have reduced earnings forecasts, and analysts have cut estimates due to declining commodity prices, rising inflation and the fall of the Brazilian currency.
• US-based retailers have been affected as well, and have been unable to raise prices to offset the fall in the Brazilian real.

LatAm Companies Struggling to Go Global

• Few Latin American companies have succeeded in expanding beyond their home region.
• Challenges include different labor markets, competition for investment, and the challenge of investing in technology while responding to international competitors and regulatory hurdles at the same time.

Cencosud Partners with Dotz in Brazil to Boost Sales

• Chilean retailer Cencosud has formed a partnership with Dotz, the third-largest loyalty program in Brazil, covering its network of Prezunic supermarkets in Rio de Janeiro. The goal is to increase revenue through greater customer loyalty.
• Dotz will manage the loyalty program, which aims to grow membership to 20 million participants this year and hit BRL$430 million (US$112 million) in revenue, which would be 20% higher than the original forecast.

To Invest in Cuba, Please See Raúl Castro’s Son-in-Law

• Despite all the economic changes in Cuba, its economic landscape is dominated by a business empire owned by the Revolutionary Armed Forces and run by Luis Alberto Rodriguez.
• Rodriguez is the gatekeeper for all foreign investment and is married to the daughter of Raúl Castro, President of Cuba’s Council of State.

Uber Banned in Rio

• Rio de Janeiro’s mayor signed a bill into law that will fine drivers of unofficial taxis, including Uber drivers. Other Brazilian cities, such as São Paulo, are also pursuing bans.
• The Rio city government plans to create its own app that will be free for users and mandatory for all taxi drivers, and will give riders the ability to submit complaints.