Retailers across America have been closing stores in droves this year amid years of declines in sales and customer traffic and an increasing threat from Amazon.

So far in 2017, retailers have shut down more than 6,300 stores. UBS says the sneaker retailers Foot Locker and Finish Line could be the next to start closing stores.

UBS’ findings come following Friday’s dismal second-quarter results from Foot Locker that caused shares to plummet by nearly 30%. The company announced earnings of $0.39 a share on revenue of $1.7 billion, both of which were shy of Wall Street expectations. Additionally, same-store sales sank 6% versus a year ago. Foot Locker shares have plunged 57% over the past three months.

On Foot Locker’s quarterly conference call, chairman and CEO Richard Johnson said he wasn’t worried about Amazon. Here’s Johnson (emphasis ours):

“For our part, we will continue to invest in creating compelling experiences for our customers. At the premium end of the market, most of our customers don’t want to just buy a specific product they see on a screen. They want that product to have a connection to an experience they find meaningful and want to participate in. That experience could be a special event in a store, being notified of or discovering a video on our website or YouTube channel of an athlete or celebrity wearing or discussing the latest product, an interaction with their friends while touching and feeling the product, or simply a conversation about sneakers with one of our stripers or other store associates. For that reason, we do not believe our vendors selling product directly on Amazon is an imminent threat. There is no indication that any of our vendors intend to sell premium athletic product, $100-plus sneakers that we offer, directly via that sort of distribution channel.”

But in a note sent to clients on Monday, UBS analyst Michael Binetti downgraded both Foot Locker and Finish Line and said it’s “almost certain” that the sneaker retailers would lose market share to Amazon. He lays out three reasons he thinks things are about to get a lot tougher for the industry.

First, Binetti sees Nike stepping up its efforts to push sales directly to the consumer. That is especially worrying for Finish Line, which, according to Nike’s October 25 analyst day, sees 68% of its sales come from Nike. Binetti adds, “For Foot Locker in particular, while many of its stores are among the most compelling retail experiences in our US specialty coverage group, we think the company will have to significantly accelerate closure of its lower tier stores to properly absorb market share shifts to the brands own DTC businesses (and to Amazon).”

But the sneaker retailers’ problems don’t stop there. It appears consumers are now choosing to buy their Nikes on Amazon versus going into brick-and-mortar stores like Foot Locker and Finish Line. “UBS Evidence Lab survey shows that in ’17 for the 1st time, more consumers prefer to buy Nike on AMZN vs at FL,” Binetti wrote.

There was a “significant YOY increase in the percent of consumers who prefer to buy Nike product ‘on the brand’s own website,'” Binetti notes. “The combination of an accelerating shift of purchase to both Amazon and the brands’ own website — and the subsequent reduction in purchase intent through athletic specialty retailers like Foot Locker — makes it hard to see the path back to accelerating market share gains for Foot Locker.”

Finally, both Foot Locker and Finish Line have a large presence in malls that have lost the anchors Macy’s and J.C. Penney.
Specifically, Binetti says, “We think FINL is at particular risk (more so than FL anyway) of further deterioration in sales & traffic trends in its stores due to high exposure to lower-tier locations.”

As a result, UBS downgraded Foot Locker from “buy” to “neutral” and Finish Line from “neutral” to “sell.”

By Jonathan Garber for www.businessinsider.com

The Amazon Business office-supply unit has attracted large-business customers, despite a contention by the Federal Trade Commission and a U.S. district-court judge that Amazon would have trouble competing with Office Depot and Staples for these customers.

Amazon.com said its online store for office supplies has logged more than 1 million business customers since launching two years ago — including large firms that U.S. antitrust regulators and a federal court thought it would have trouble luring away from competitors.

The e-commerce giant is trumpeting the client roster of Amazon Business, as the unit is known, as a big success.

It’s 150 percent bigger than in July this past year. And it includes, Amazon says, companies of all sizes, from hospitals and restaurants to local governments and Fortune 50 companies. Amazon cited King County, the U.S. subsidiary of industrial conglomerate Siemens and Stanford University as clients. Amazon didn’t disclose total sales for the year.

Large institutions are key to Amazon’s new venture because they are the turf of rivals Office Depot and Staples, huge suppliers with the expertise to navigate big corporations’ stodgy purchasing practices that hinge on requests for proposal and multiyear contracts guaranteeing discount pricing.

When antitrust officials at the Federal Trade Commission (FTC) contested the proposed $6.3 billion merger between Office Depot and Staples in 2015, the companies contended that Amazon Business, as well as regional office-supply firms, would step up to fill any competitive void left by the combination.

The FTC, the companies said in a statement, “refuses to even acknowledge the rise of new competitors, such as Amazon, and the disruptive effects of the digital economy.”

In May 2016, a U.S. court sided with the FTC. Among the arguments wielded by the court was Amazon Business’ lack of “demonstrated ability” to compete in the business-to-business space “on par” with the combined might of Office Depot and Staples within the three next years.

The judge expressed skepticism that Amazon’s do-it-yourself approach to purchasing would fare well with the bureaucratic requirements of large corporations. “The evidence before the Court simply does not support a finding that Amazon Business will, within the next three years, either compete for large (requests for proposals) in the same way that Office Depot does now, or so transform the industry as to make the RFP process obsolete.”

In a news release Tuesday, Amazon said that its business-to-business platform offers “millions” of products from 85,000 sellers. Other customers highlighted by Amazon were Con Edison of NY, Gwinnett County Public Schools in the Atlanta area, Intermountain healthcare, Johns Hopkins University and the Mayo Clinic.

“We are grateful to our customers for helping us reach this significant milestone,” said Prentis Wilson, vice president of Amazon Business.

By Ángel González for Seattle Times 

The Federal Trade Commission is reportedly looking into whether Amazon’s discounts are as good as they seem.

As part of the FTC’s review of Amazon’sagreement to buy Whole Foods, the Federal Trade Commission is looking into allegations that Amazon misleads customers about its pricing discounts, Reuters reports, citing a source close to the probe.

The probe is based on a complaint from the advocacy group Consumer Watchdog, Reuters said. The FTC had no comment, saying as a rule it doesn’t confirm the existence of investigations. Consumer Watchdog earlier this month published a report claiming the online retailer “routinely uses inflated and fictitious previous prices to give consumers the misleading impression they’re getting a bargain.”

Amazon refuted the group’s pricing report.

“The study issued by Consumer Watchdog is deeply flawed, based on incomplete data and improper assumptions,” it said in a statement. “The conclusions the Consumer Watchdog group reached are flat out wrong. We validate the reference prices provided by manufacturers, vendors and sellers against actual prices recently found across Amazon and other retailers.”

Consumer Watchdog, which analyzed 1,000 items sold on Amazon, said the retailer often employs “previous” prices, which it alleges are designed to give the appearance of big discounts. Consumer Watchdog said the “previous” prices appear to replace Amazon’s “list price,” which earlier this year came under fire for allegedly failing to reflect the actual market price of an item.

“Amazon displayed reference prices on 46 percent of the products surveyed—a sharp increase from a similar sample taken just months before,” Consumer Watchdog said in its report. “They now employ several different kinds of reference price, including “was” prices, “sale” prices, or simply prices with a line through them (“strikethrough prices”).”

The report also alleges Amazon boosted the reference prices to about 70 percent higher than the historical price of the item.

In one example, Amazon said the before-sale price on a pack of LED light bulbs was almost $100, but offered the pack on sale for $14.99, showing that customers would receive an $85 savings. However, Consumer Watchdog said the site hadn’t charged more than $14.99 for the lightbulbs in the previous 90 days.

“Amazon appears to be increasing its use of reference prices on its site since last year, when it quietly eliminated many list prices,” the report said. “However, the result is the same: Amazon’s customers are being deceived into thinking they are getting a bargain, when in most cases they are not.”

Consumer Watchdog said it believes the Whole Foods acquisition should be blocked unless Amazon changes its pricing strategies.

By Aimee Picchi for CBS News

The Asian region is forecast to the world’s largest market for stationery products in 2017, according to latest data compiled by leading research firm Statista.

Global revenue for the ‘Hobby and Stationery’ segment in 2017 will reach US$132 billion with an annual growth rate of 11.3 per cent between 2017 and 2021.

Asia is forecast to emerge as the highest revenue generator in 2017, which accounts for around 42 per cent of global revenue of US$56 billion.

Hong Kong, as the major trade hub in Asia Pacific, has attracted the attention of brands and manufacturers from around the world through the greater prominence of the Hong Kong International Stationery Fair.

Jointly organised by the Hong Kong Trade Development Council (HKTDC) and Messe Frankfurt (HK) Ltd, the 18th edition of the Hong Kong International Stationery Fair will run from 8 – 11 January 2018 at the Hong Kong Convention and Exhibition Centre.

The four day fair expects more than 250 exhibitors from 11 countries and regions, and more than 20,000 visitors from around the globe.

The 2018 fair will once again feature five product zones, including DIY Supplies, Gift Stationery, Kids & School, Pen & Paper and Smart Office.

To offer a one-stop trading platform and better sourcing experience, the Hong Kong International Stationery Fair will be held concurrently with the HKTDC’s Hong Kong Toys & Games Fair, the Hong Kong Baby Products Fair and the Hong Kong International Licensing Show at the Hong Kong Convention and Exhibition Centre.

Source www.stationerynews.com.au

Staples finally sells up

Staples’ future under private equity ownership is all about online growth.

Having disposed of its international operations (including those in Australia and New Zealand) Staples has sold off the rest of ‘farm’ to a private equity group.

Sycamore Partners, a US private equity firm that specialises in retail, will pay US$6.9 billion for Staples, a company that has seen its sales, profits and store numbers decline in the wake of the online shopping phenomena, driven by the likes of Amazon.

Staples had sought to remain competitive in the online world by merging with Office Depot but the deal was blocked by US regulators last year and the companies abandoned the plan.

In its latest annual report, Staples was up front about the challenges it faced, stating it faced strong competition from wholesalers and local stationery stores.

“We also compete with online retailers such as Amazon.com, mass merchants such as Walmart and Target, warehouse clubs such as Costco, computer and electronics retail stores such as Best Buy,” the company said.

According to a report in the New York Times, Staples’s board and management decided to sell the company after shareholders had essentially lost faith in the business. Shares of the company were trading near US$7 earlier this year, having fallen sharply from about US$18 a share just two and a half years ago.

Sycamore’s offer of US$10.25 a share represents a 20% premium over the company’s stock price in early April, before initial reports of a deal to sell the company lifted shares.

Staples still sells huge volumes of paper, printer cartridges with a minority of its goods sold at bricks-and-mortar locations.

Around US$10.6 billion of its sales are delivered, compared with about US$6.6 billion sold in stores.

Source: Stationery News

Amazon has sent shockwaves through the food retailing business with its near $14-billion acquisition of natural and organic food chain Whole Foods.

The move has dominated the financial news over the past three days and has been called a game-changer for the food retailing industry, but could there be wider ramifications for the business supplies industry? We suggest a few things to think about…

Whole Foods locations could be used as collection points for Amazon online sales, providing customers with more delivery options.

Whole Foods stores could act as local distribution hubs for fast delivery, two hours or even less, and give Amazon a stronger last-mile delivery presence.

Amazon’s move could have a disruptive effect on the wider food retailing industry. There is already speculation about the need for accelerated consolidation in the mass and grocery sector, and if that happened that would affect vendors that sell into these retailers.

Amazon has been testing more consumer-friendly retail concepts, such as its Amazon Go initiative where customers just pick items off shelves without the need to go through a checkout. Acquiring Whole Foods will give it a wider test platform and could lead to faster adoption of some of these shopping innovations as well as speeding up digital transformation in the retail sector in general.

We have previously downplayed the idea of Amazon acquiring retail locations in the business supplies channel because there was no indication that it would make a significant move into the retail space. That has now changed, and the Whole Foods deal validates Amazon’s belief in an omnichannel experience that combines the digital and physical worlds.

Could this mean that Amazon now looks to acquire retailers in other business segments, such as office supplies, and that Staples or Office Depot’s stores could be on the Amazon radar? Possibly, especially if Amazon is not happy with the way that Amazon Business is growing; it hasn’t updated its customer and sales figures on Amazon Business in the US since April 2016. Is that because the growth rate has slowed and it’s not getting the traction it thought it would after Amazon Business’ initial success?

The Whole Foods acquisition is reportedly being driven by difficulties Amazon was having in growing its Amazon Fresh grocery delivery business. If Amazon Business is stalling or not growing fast enough, then why wouldn’t Amazon look at buying growth? We now know that this strategy is part of Amazon’s playbook.

By Andy Braithwaite for OPI.net

 

When you need to buy a new kitchen gadget, a designer lipstick, a branded razor, a calendar and that vital cable for your television — what’s the one easy place you can turn to?

That’s right, there isn’t one in Australia. You’re facing hours going shop-to-shop, picking up second-rate products from a local mall or ordering from various websites with delivery fees on each item and mixed rules on returns.
Amazon is the game-changer our retail landscape needs, one that transformed shopping in the UK and US years ago. Despite the hand-wringing from the retail sector that has dominated reporting on the online giant, this is mostly good news for the consumer.
You will be able to buy what you want, when you want it. It will typically be affordable. Existing brands will have to work harder to compete. It will be the arrival of Uber, or Aldi, all over again.

I lived in the UK more than four years ago, and buying books, travel accessories and homeware couldn’t have been easier. Every Christmas now, I log on to Amazon and select the perfect toiletries, chocolates, booze, games, DVDs, hiking gear and toys that I want for all of my relatives, adding wrapping and a message where needed. It’s the work of minutes.
In the four years I’ve been in Australia, waiting for Amazon, the company has grown enormously, and it’s in fashion that investment bank Morgan Stanley now sees the biggest threat.

Its report “The Amazon Effect in Australia” says $800-million will be wiped from the earnings of chains including JB Hi-Fi and Harvey Norman, but the single biggest impact will be on Wesfarmers. The nation’s largest retailer, which owns Target and Kmart, could lose more than $428 million in earnings by 2026.
The report said department stores would be the sector worst hit, as Amazon generates up to $12 billion in sales by 2026.

Online retailer Catch Group this week announced it is having a makeover to ensure it becomes number two in Australia after Amazon, rebranding Catch of the Day as Catch.com.au and turning it into a marketplace.
Amazon Fresh will take on the grocery sector, and it is aggressively building its Amazon Prime video membership service, making inroads into streaming and refusing to stock Apple products in favour of its Fire TV sticks. Amazon entered the Artificial Intelligence field in 2014 with its Alexa speaker. This week it emerged that its shares (and those of Google) have just reached $US1000, putting them in an elite club of mega-companies.

In December, it opened the first Amazon Go store at its Seattle headquarters, a convenience store with a tracking system of sensors, algorithms, and cameras instead of cashiers or checkout lines.

Australians haven’t migrated to online shopping in the landslide once predicted. Figures released by the National Australia Bank last week showed the Online Retail Sales Index — a measure of spending on retail goods — fell by 0.8 per cent in April. But even if you prefer to visit a store and try clothes on, it’s being able to get those small essentials without the painful search that will hook you in.

And Amazon is moving offline, too. In December, it opened a prototype Amazon Go grocery store at its headquarters in Seattle, Washington, which uses a tracking system of sensors, algorithms, and cameras instead of cashiers or checkout lines. The eCommerce giant opened its first physical bookstore in New York last month — its seventh in the US. Amazon Books, like the Go store, does not accept cash, with Prime members using the app on their smartphone to pay and non-members using a credit or debit card.

Maxim Group today predicted a future in which Amazon will run everything from petrol stations to credit lines, Dow Jones reports.

“Consumers will be able to save money at the Amazon gas station because they belong to Amazon Prime, much like Costco members today,” said Maxim’s Tom Forte. “They will also be able to pick up and return their merchandise ordered online at the Amazon gas station.”

They’ll book their travel on Amazon, and have the firm send their suntan lotion ahead to the resort so it’s there when they arrive, he added.

But just as with Uber and co, there are serious questions over Amazon’s omnipotence. Critics say the retailer has a monopoly and is destroying small businesses — book stores, boutiques, grocery stores. There are also questions over how it pays tax.
There have been regular accusations that the company mistreats workers, with reports in December of “intolerable conditions” at a Scottish warehouse, with badly paid staff forced to sleep outside in tents to save on commuting costs.

A Sunday Times investigation found temporary workers at the warehouse were being penalised for taking sick leave and put under immense pressure to hit targets, and that water dispensers were often empty despite the intense physical nature of the job. Unions said workers were falling ill from overwork.

In the US, where Walmart is buying up smaller online retailers as it battles to compete with Amazon, there have been dozens of stories about inhumane conditions at its warehouses. But workers who spoke to Mental Floss in 2015 said conditions were relatively typical for warehouse work. In 2012, after an expose on the searingly hot summertime conditions, Amazon announced plans to spend $52 million to install airconditioning.
The company is now recruiting for hundreds of jobs in Australia as it prepares for its highly anticipated debut. It has broadly positive reviews on job sites Indeed and Seek, although there were complaints about difficult management, tough targets and short lunch breaks.

Amazon is a massive tech corporation and — mirroring Facebook, Apple and Google — there are justified concerns over its practices and treatment of employees as it grows.
However, it is time Australia caught up with the rest of the Western world and actually knew what those were.

By Emma Reynolds for www.news.com.au

Queens speech delayed by stationery

Traditionally, the U.K. Parliament starts off every year with a speech by the current monarch, which outlines the direction the ruling party wants to take the government.

But the queen’s speech might get delayed this year — and the government says paper is partially why.

Turns out the queen can’t just print out her speech on a few sheets of A4. It has to be written on special goatskin paper — which, despite the name, doesn’t involve actual goats.

The special paper ensures the speech will last longer in Parliament’s national archives — but it also means the ink will need a few days to dry.

Normally this isn’t a problem because both major parties already know what they want their government to look like. But the surprising election results have forced the ruling Conservative Party to negotiate with a regional party in Northern Ireland to maintain its majority.

Those talks are still going, which means it’s too early to start putting a government together on paper — at least, on archival goat paper.

What is goatskin paper?

Goatskin paper is a thick and ornate parchment on which the Queen’s Speech is written.

While it was traditionally made from real goat skin, its modern form contains no animal hide at all.

But it keeps its name because it has a watermark in the shape of a goat.

Westminster veterans still refer to “going goat” to mark the moment the Speech needs to be ready by so that the ink can have time to dry before being sent to the Queen for her approval.

Why is it used in the Queen’s Speech?

The posh paper is used for the special occasion of the State Opening of Parliament.

On it is written the Queen’s Speech, which sets out the Government’s plans and legislative priorities for the year ahead.

But after the 2017 snap election led to a hung Parliament, it was reported that Theresa May would push back the speech from the original date of June 19.

It was thought she needed time to organise a deal with Northern Ireland’s DUP to support the Conservatives in a minority government in case they made ultimatums over Tory policies.

By Neal Baker for The Sun; and Matt Picht and Katie Link for www.abc2news.com

Following years of government budget cuts, parents are now turning to crowdfunding Web sites in order to provide basic school supplies.

Appeals have been launched on websites including Justgiving.com for online donations towards items such as whiteboards and computers, as well as to pay for crossing attendants.

These include one for Camelsdale Primary School, which set up a page to raise money for a replacement whiteboard.

The drastic measures are being publicised by the National Union of Teachers (NUT), who have set up a ‘School Cuts’ website which shares details of the more than 18,000 schools that could face further cuts.

The website contains a tool with which people can check how their school will be affected, while urging voters to petition their local MP candidates to oppose more cuts before the election.

The project, which is also backed by NAHT, The Education Union (ATL) and GMB, also forecasts the future for UK education and claims that by 2022, 93% of schools will have per-pupil funding cut.

According to the National Audit Office, the Tory pledge to inject £4bn into education, thus changing the funding formula, could actually result in 9,000 schools facing more cuts.

In a blog, the Department of Education deny claims made in a report by the Institute for Fiscal Studies (IFS) that schools are not protected from further funding cuts.

They state: “That is not true – we have protected schools from losing more than 3% per pupil and that protection is guaranteed for the lifetime of the formula.

“[…] Indeed, there has been a substantial increase in school funding over the years.”

Basing findings on a National Audit office report into school financial sustainability, a spokesperson writes: “The government has protected the core schools budget in real terms since 2010, with school funding at its highest level on record at more than £40 bn in 2016-17 – and that is set to rise as pupil numbers rise over the next two years.”

Prime Minister has echoed this claim several times, stating in an interview with Andrew Marr: “The level of funding going into schools is at record level.”

However, Professor Sandra McNally from the School of Economics, University of Surrey, published an article​ fact-checking this “highest level on record” claim.

She explains that only the “per pupil expenditure” (the amount spent on each pupil) is relevant, rather than the total amount of money available.

According to Professor McNally, current spending per pupil was “largely frozen in real terms” between 2010 and 2016.

And as onward spending is frozen in cash terms, this will likely lead to a “real terms reduction of around 6.5 per cent by 2019-2020”.

She explained this would, in reality, be a real-term fall in per-pupil spending – the biggest in 30 years.

“Theresa May’s claim is misleading because it omits important information,” Professor McNally concluded.

By Harriet Marsden for www.independent.co.uk

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