Retail news and trends to watch out for
- Kohl’s under pressure. Canadian retailer Hudson’s Bay Company (HBC) is considering a bid for US department-store group Kohl’s, according to reports. Private-equity firm Sycamore Partners is also said to be planning a bid that would value Kohl’s at $9bn. The news comes as the retailer has been facing pressure from investors as a result of its poor performance. Hedge fund Engine Capital, which owns 1% of Kohl’s shares, in December urged the retailer to either spin-off its e-commerce business or sell the company. Kohl’s announced last week that it is looking to revamp its business model. It added that it sees its Sephora shop-in-shops as key to growth and expects them to generate $2bn in annual sales.
- Boots bids. More firms are lining up to explore buying UK-based health and beauty retailer Boots, according to a report by The Sunday Times. US-based private equity firms Apollo and Sycamore Partners have reportedly submitted non-binding bids for the retailer. Other bidders include TDR Capital and the Issa brothers, who own retail chains such as Asda. Boots’ management is said to begin meeting with bidders this week. The retailer is valued at £7bn ($9.23bn). In January, parent company Walgreens Boots Alliance CEO Roz Brewer said that the company had initiated a review of Boots, as it focuses more on its US healthcare business. It also emerged in January that private-equity firms Bain Capital and CVC Capital Partners were putting together a joint bid for Boots; the two companies later declined to submit a first-round bid. Boots UK is the largest pharmacy-led health and beauty chain in the UK, with 2,200 stores.
- Moving to platforms. Hong Kong-based beauty retailer Sa Sa has launched on online grocery and food delivery platform foodpanda mall in Hong Kong. The retailer’s offer on the platform covers 700 products. Foodpanda couriers pick up the goods at Sa Sa’s physical stores and deliver them to customers in as little as 10 minutes, the company says. The offer is intended to give Hong Kong consumers access to products without having to leave their homes, given the current surge in COVID-19 cases.
Zooming in on experiences. Some 70% of global retail sales are still set to come from physical stores over the next five years, and their growth is projected to be around 9%, according to Euromonitor International. In comparison, e-commerce sales are set to grow 60% over the same period.
Some 48% of retail executives said they plan to devote more space for digital fulfillment in their stores, while 44% stated that opening more experiential store formats was a key priority. Retailers are introducing experiences on digital too. For example, Germany-based online retailer Zalando launched a digital marketing campaign, whereby customers use Google’s Street View to shop for apparel on Zalando’s website, while exploring the virtual streets of Spanish cities. Social-media influencers model outfits available on the platform and take pictures in the cities. Then, via Google Street View, users can zoom in on the influencers’ looks and shop the pieces on Zalando.
- Pulling out. Health and beauty retailer A.S. Watson Group is to close its Watsons stores in Russia due to what it calls an unsatisfactory business performance. The group said it made the decision to close operations in the country at the end of January. All shops in Russia are set to shut by June. Watsons Russia has 47 stores in St. Petersburg. In a statement the company said its local team has made attempts over the years to improve business, but the results have been unsatisfactory. A.S. Watson Group acquired Russian beauty retailer Spektr in 2005, and in 2018, all Spektr stores in St. Petersburg were rebranded and opened under the Watsons name.