Talking Shop - Winter 2009/10


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Introduction


Welcome to the Winter 2009/10 edition of Talking Shop. If you are lucky enough to have invested in a winter clothing retailer, we applaud your foresight.

With the seasonal period now behind us, the race is on for retailers to release their Christmas trading results. From the headlines it would appear that many retailers had a bumper Christmas, with massive growth in like-for-like sales. However this year's figures need to be examined in light of last year's results - the more pertinent question is whether sales have increased over the last three years. Further, whilst like-for-like figures are important, the real test of success is profit.
Looking forward to 2010, this edition of Talking Shop focuses on two of the issues that we think will be on everyone's lips this year: retailers returning to the public markets and technology in the retail sector.

In this edition of Talking Shop, we turn the spotlight on:

  • Returning to the public markets - in our lead article we compare the public markets in preparation for an expected increase in the number of retail IPOs in 2010. If pre-IPO announcements and press speculation is to be believed, when the capital markets open up later this year, we are due to see a rush of private equity backed retailers bringing their businesses back onto the public markets;
  • M-Commerce: The future of retail? - following on from the m-Commerce survey that we carried out at the end of last year (the results of which are available here), we examine the development of M-commerce over the last 10 years; and
  • Tweetailing– we discuss the potential threat to branding of the rise of social networking sites such as Facebook and Twitter.
This quarter we also feature an article written by our guest contributor, Claire Muir from Amethyst Group Limited:
  • Outsourcing Logistics – Claire discusses the reasons why a retailer may outsource its fulfilment function and the key considerations for businesses investigating outsourcing providers.

If you have any questions or would like to discuss any of the issues raised in this update, please contact a member of our retail team.

David Roberts
Partner
Head of Leisure & Retail Group  

Returning to the public markets

Corporate activity in the retail sector over the last 18 months has been limited. M&A transactions have mostly focussed on distressed assets, with few successful retail businesses changing hands. Whether Britain is now moving into recovery, or about to experience a double-dip, UK banks are not yet ready to fund a consolidation in the market or a series of secondary buy-outs of private equity backed businesses. Highly leveraged M&A activity in the retail sector is thus still some years off.
Click here to read the full article

M-Commerce: The future of retail?

We are an impatient lot. We want access to the internet, wherever we are and whenever we demand it. Our unquenchable thirst for contact with the online world has led to a proliferation of multi-platform accessibility. Importantly, portable devices are no longer simply about communications. Instead, faster and more user-friendly technology means that we can now access virtually all forms of content, including those from which you can buy or sell goods and services. The question is, how ready are brands for the new world of mobile commerce?
Click here to read the full article

Tweetailing

A study conducted last autumn by the E-Tailing Group and PowerReviews demonstrates the extent to which a presence on social networking sites, such as Facebook and Twitter, is becoming a must have for retailers looking to interact effectively with consumers. The study found that 86% of online retailers surveyed already have Facebook fan pages, with another 13% planning to do so in the future. Similarly, 65% are already on Twitter and a further 26% planning on getting in on the act soon.
Click here to read the full article

Outsourcing Logistics - Claire Muir, Amethyst Group Limited

Many retailers have chosen to outsource their non-core activities, in particular, their fulfilment to third party providers. What are the reasons behind these decisions?
Click here to read the full article

The information contained in this update is intended as a general review of the subjects featured and detailed specialist advice should always be taken before taking or refraining from taking any action.