Forever 21 has filed for bankruptcy

By Cortney Moore for FOX Business

Forever 21 is about to start aging.

The iconic youth-focused fashion retailer announced to its customers on Monday that it indeed is filing for bankruptcy despite its attempts to quash rumors about the business development in a newsletter 10 days prior. Under the U.S. Bankruptcy Code’s chapter 11, Forever 21 will remain open while it “takes positive steps to reorganize the business.”

Up to 178 stores will close throughout the U.S.—which is sure to hurt thousands of employees who rely on the retailer for a source of income. Operations are also said to halt in 40 countries.

Forever 21 sent out a newsletter to customers on Sept. 20, telling them not to believe the “misinformed” bankruptcy rumors.

For some devoted shoppers, the announcement comes as a shock. However, a number of brick and mortar stores have struggled to keep money flowing with the rise of ecommerce juggernauts like Amazon providing the convenience of speedy shipping.

Fashion outlets that have shuttered a part of their business or have gone out of business completely include other notable mall staples like Payless, Kohl’s, Dressbarn, Topshop, Ralph Lauren, Lord & Taylor and more.

Forever 21, which was founded by Korean-born American husband and wife Do Won and Jin Sook Chang in 1981, grew to amass a network of over 800 stores while becoming multi-billion dollar company. Despite this, the trendy fashion chain that covertly imprints bible verses regarding everlasting life on its shopping bags, couldn’t be spared from what some have dubbed the “retail apocalypse.”

Here are five reasons that may have contributed to Forever 21’s downfall.

1. Rapid expansion

In Forever 21’s “About Us” section of their website, it acknowledged that it was the fifth largest specialty retailer in the U.S. and was aiming to “become an $8 billion company by 2017 and open 600 stores in the next three years.” However, just like with any other business that aggressively expands, there is sure to be a whole lot of debt that comes with it.

The company also revealed that the average size of a Forever 21 store is 38,000 square feet while the largest is 162,000 square feet. A market study that observed the average rent paid by square foot in the U.S. for industrial space found that businesses classified under “special purpose” paid $6.50 per square foot. If that figure holds true for today’s standards, a 38,000-square-foot Forever 21 would cost about $247,000 for rent alone. Similarly, a 162,000-square-foot location would cost an astounding $1,053,000.

2. Bad publicity
According to a report by the social media analysis website Sprout Social, nine out of ten customers will stop purchasing from brands that lack transparency. These findings are a detriment to Forever 21 since the company has been embroiled in back-to-back lawsuits for trademark and copyright infringement for years.

Whether from big household name designers to small indie brands, Forever 21 has made a knockoff version for customer purchase. Gucci, Adidas and Puma are just a few big dogs that have attempted a courtroom battle with Forever 21. Pop singer Ariana Grande has filed a $10 million lawsuit of her own over the value brand “stealing her” image and likeness.

3. Fast fashion and the competition
Forever 21 might be known for their quick-turning duplications, but they are not alone in the fast fashion world. Competitors such as H&M and Zara have vied for the same consumer base that wants trendy clothing at an affordable or low-cost price point. Popular London-based ecommerce brands like ASOS and Pretty Little Thing have also taken a swipe at profits with their lucrative celebrity collaborations.

The Instagram famous Los Angeles-based brand Fashion Nova has also given Forever 21 a run for its money with shameless knockoff business strategy that churns out replicated designs in less than 24 hours.

4. Shifting consumers
Conversely, there is a buying base that opposes everything fast fashion stands for. These shoppers are generally concerned for the environment, whether it be through minimizing fabric waste or not supporting an industry that has brought on harsh working conditions. This desire for sustainable fair trade has allowed the secondhand clothing market to grow to an estimated $28 billion worldwide, according to a consumer survey from analytics aggregator Statista.

The call for body positivity in the fashion industry has also impacted Forever 21 despite the store having a dedicated plus size and curvy sections in U.S. stores. Outside the small pickings these departments have, Forever 21 highlights its ultra-thin models more frequently—which may have alienated its full-figured base that is said to have a buying power of about $46.4-billion according to business management consultants at Coresight Research.

Forever 21’s shipping of free diet bars over the summer also didn’t help the brand’s image.

5. Unfocused inventory
Although majority of Forever 21 stores offer various selections, the brand appears to have extended its reach too far. With its other lines like XXI Forever, For Love 21 and Heritage 1981, the retail store has carried a mixed bag of styles that are both overwhelming and in conflict with shoppers’ inner Marie Kondo call for minimalism.

The store has also dabbled in creating a home décor, tech accessory and cosmetics line that is cheap in price but lacking in durability. Forever 21’s sister brand, Riley Rose, which sells third-party beauty products never took off the way the company hoped. Even top beauty retailer Ulta is struggling with a shifting market that prizes skincare over makeup.

A January report in Business of Fashion said Forever 21 had its sights on doubling the number of Riley Rose stores. That doesn’t appear to be happening while the business reorganises its strategy under bankruptcy.

By Stephen Collinson for CNN

The Trump administration is frenetically throwing up road blocks in a belated grasp for a strategy to slow a Democratic impeachment machine the President is now branding a “coup.”

But the intrigue that has pitched Donald Trump’s presidency into its deepest-ever crisis took a new twist after the independent inspector general from the State Department, Steve Linick, asked for an “urgent” briefing with congressional committees on Wednesday about documents related to the Ukraine scandal. A congressional aide described the request as “highly unusual and cryptically worded.”

The dramatic development came after Secretary of State Mike Pompeo attempted to prevent witnesses linked to his department from appearing on Capitol Hill in the coming days. The move appeared to be an attempt to buy time to come up with a long term blueprint to save Trump by turning the politics of impeachment.

Pompeo’s initiative was at least more substantive than Trump’s tweeting and cable news appearances from conspiracy-theory touting supporters that constituted his early defense.

But the sharp Democratic response to Pompeo’s claims of bullying against potential witnesses, and a key source’s decision to show up anyway, suggested that the added gravity of a formal impeachment process could shift Washington’s balance of power.

It is only a week since House Speaker Nancy Pelosi formally announced an impeachment probe into evidence that Trump pressured Ukraine to dig up dirt on his potential 2020 rival Joe Biden. But the drama has turned Washington on its head and comprehensively altered the dynamics of the Trump presidency.
Trump appears under siege from multiple directions. Late Tuesday, for example, The New York Times cited administration officials as saying the President previously suggested fortifying his southern border wall with a trench filled with alligators and snakes and wanted to shoot undocumented migrants in the legs.

Fast-moving developments
The latest fast-moving developments show how Democrats are using their constitutional authority to quickly build a framework for their investigation.

“This is an extraordinary crime. I suspect this is the greatest crime a president has committed in my lifetime,” Rep. Mike Quigley, a Democratic member of the House Intelligence Committee told CNN’s John Berman Tuesday.
The pace is sure to heat up Wednesday with Pelosi and House Intelligence Chairman Adam Schiff and the President himself expected to hold news conferences.

Trump offered Americans a glimpse into the state of his mind at the end of a tumultuous day with a unfounded tweet that warned illegal attempts were underway to steal the votes and constitutional rights of his supporters.
“As I learn more and more each day, I am coming to the conclusion that what is taking place is not an impeachment, it is a COUP,” Trump declared.

Aside from the inflammatory social media posts, the White House clearly understands that its best interests lie in stalling the inquiry for as long as possible, likely with legal challenges challenging subpoenas to give its surrogates time to fog the case and to build public frustration with impeachment.
A day after being subpoenaed for documents related to his role in consultations with Ukraine, Rudy Giuliani, the President’s personal lawyer, engaged his own counsel, and in an historical echo chose former Watergate prosecutor Jon Sale.

The former New York mayor has not said if he will comply with the subpoena. But he could be an early test case of the administration’s intentions to gum up the impeachment works with contentious legal challenges that could last for months.
“I really have to study it. I can’t shoot from the hip,” Sale told CNN’s Michael Warren.
“Every time I turn around, Rudy’s on another TV show,” Sale continued. “He and I could have a conversation, and then I turn on the television and he could be doing something else.”

‘Intimidation and bullying’
Pompeo, one of the President’s most valued aides, launched the most serious attempt yet by the administration to disrupt the impeachment investigation.
In a letter to House Foreign Relations Committee Chairman Eliot Engel, he said the proposed timetable for witnesses to testify in the coming days was too compressed.
In a tweet, the nation’s top diplomat warned the request could be “understood only as an attempt to intimidate, bully, & treat improperly the distinguished professionals of the Department of State, including several career (foreign service officers).”

The Democratic response was swift, reflecting an apparent belief among party leaders that they have the upper hand over the administration in the early stage of the probe.
In a letter to Pompeo, who is in Europe, the chairmen of the House Intelligence, Foreign Affairs and Oversight committees said that holding back testimony “is illegal and will constitute evidence of obstruction of the impeachment inquiry.”

In effect, the chairmen were warning that an attempt to frustrate the impeachment inquiry could eventually itself turn into a rationale for impeachment.
The administration has been largely successful in derailing previous Democratic efforts to oversee the White House by launching legal challenges and sweeping executive privilege claims. But impeachment already looks like a different animal.

The lawmakers also accused Pompeo of intimidating State Department witnesses to protect himself and the Ambassador Kurt Volker, the former special envoy to Ukraine who had been scheduled for a deposition on Thursday, has made clear he still plans to show up, despite Pompeo’s letter.

The other officials schedules to be deposed by the House Foreign Affairs Committee include former US Ambassador to Kiev Marie “Masha” Yovanovitch, Counselor T. Ulrich Brechbuhl and Ambassador Gordon Sondland — who were mentioned in the whistleblower complaint that helped trigger the impeachment push.

A fifth official — Deputy Assistant Secretary George Kent — has overseen policy on Ukraine at the State Department since September 2018 and was previously the deputy chief of mission at the US Embassy in Ukraine.
Yovanovitch, who was previously scheduled to appear Wednesday, will now do so on October 11 with the agreement of both the Committees and counsel, a congressional aide told CNN.

Democrat calls for Trump to be jailed
The President stayed out of sight at the White House on Tuesday. But he was as active as ever on Twitter, seeking to discredit the whistleblower much as he attempted to impugn the credibility of special counsel Robert Mueller.
“If the so-called ‘Whistleblower’ has all second hand information, and almost everything he has said about my ‘perfect’ call with the Ukrainian President is wrong (much to the embarrassment of Pelosi & Schiff), why aren’t we entitled to interview & learn everything about…the Whistleblower,” Trump wrote, decrying another “Democratic hoax.”

In fact, the whistleblower’s complaint was judged urgent and credible by the intelligence community’s independent, Trump-appointed inspector general for the intelligence community Michael Atkinson.
And on Monday, Atkinson issued a highly unusual statement rejecting the central plank of Trump’s argument — that the whistleblower based his complaint on hearsay.

While events seemed to be running largely in the favor of Democrats on Tuesday, there was another sign of a breach in discipline that could harm their efforts to avoid the political pitfalls of impeachment.

“I’m calling on the GOP to stop Trump’s filthy talk of whistleblowers being spies & using mob language implying they should be killed,” California Rep. Maxine Waters tweeted. “Impeachment is not good enough for Trump. He needs to be imprisoned & placed in solitary confinement.”

The tweet was a far cry from Pelosi’s request for her party to approach the impeachment process in a non-partisan and “prayerful” manner.

CNN’s Kylie Atwood and Manu Raju contributed to this story.

By Jo Francis for Printweek

Antalis has described its first half performance as “resilient” in the face of declining overall demand for paper and supply issues caused by events at the Arjowiggins paper mills. However, one-off costs have resulted in increased losses for the period.

The group is the biggest distributor of paper, packaging, and sign and display materials outside of the USA. It has been working to establish a new shareholder structure since February, and its majority shareholder Sequana went into liquidation in May.

Antalis said the search for a new shareholding structure, with support from Goldman Sachs, continued and was “proceeding in line with the plan”.

The group’s results for the six months to 30 June were in line with its preliminary figures announced in July. Turnover fell by 5.4% to €1.072bn (£950m) on a like-for-like basis, while EBITDA was down by nearly 10% at €30.1m (2018: €36m).

The Papers business suffered a sharp decline in sales of 7.6% to €714.1m, growth at its Packaging business was described as “weak” with sales nudging up 0.3% to €254.2m, while Visual Communications was “stable” with sales down 2.4% at €103.9m.

The bottom-line loss for the period increased from €16m to €27m, with one-off costs including a €10.2m asset writedown mainly related to goodwill at its Latin American business, and restructuring costs of €9.8m. The group also implemented accounting standard IFRS 16 for the first time, which resulted in a further €3m hit to the figures.

Sales in the UK and Ireland slipped by 5.6% to €282m, with Antalis describing market conditions as “difficult… notably due to Brexit” although the UK did better than the general market contraction.

Chief executive Hervé Poncin said: “In H1 2019, the group’s operating performance was impacted by the decline in volumes of Papers in a market that contracted by around 7%, and by the bankruptcy of one of our graphic and recycled papers suppliers.

“Against this backdrop, we have continued to adapt our structure to changing patterns of demand and we have significantly reduced our overheads, particularly our logistics and marketing costs.”

Arjowiggins Graphic had supplied around 4% of the group’s purchases, in value terms.

Antalis stated that it had complied with its banking covenants and had strengthened its liquidity with an amended factoring agreement. This has increased its facility from €215m to €290m through the inclusion of an additional finance partner.

Net debt fell by 4.1% to €318m, although under IFRS 16 the net debt figure increases to €434m.

Sales at the group’s Papers division are expected to continue to decline, although it expected a better second half now the situation at Arjowiggins Creative Papers in the UK had been successfully resolved.

“In H2 2019, Antalis should benefit from the launch of new ranges of recycled products and the relaunch of Arjowiggins Creative Papers ranges following its management buyout. Packaging and Visual Communication should show resilience over the coming months and continue to grow their contribution to the Group’s consolidated gross margin,” the group stated.

It anticipates that full year sales will be down by between 6%-7%, with EBITDA margin of 2.7%-2.9%.

Antalis shares fell by 14% to €0.90 after the announcement.

Saudi oil attacks cause price wobble

Source: CNN

Investigators from Saudi Arabia and the United States of America have determined “with very high probability” that the weekend attack on the Saudi oil industry was launched from an Iranian base in Iran close to the border with Iraq.

What happened?
Ten drones performed co-ordinated strikes on key Saudi Arabian oil facilities knocked out half of the country’s oil capacity — more than 5-million barrels a day. This amounts to about 5% of the world’s supply. Saudi and US investigators have determined “with very high probability” that the attack came from an Iranian base, according to a source.

Who’s behind this?
Yemen’s Houthi rebels said they’re responsible for the attacks, but a spokesperson for the Saudi-led coalition in Yemen said that Iranian weapons were used in the oil field attack.

Where the US stands
President Trump said it looks like Iran was behind the attack but suggested it was too early to say for sure. Trump also insisted that he does not want war with Iran.

How it’s affecting oil
On Monday, US oil prices spiked by more than 14%. It was the biggest spike since January 2009.
Oil prices dropped sharply Tuesday, following Monday’s surge that sent shock waves around the world.

US oil futures dropped 4.6% to $59.98 per barrel, following a Reuters report that Saudi Arabian oil production would return to normal within two to three weeks. Investors took that as a positive sign about the impact of the weekend’s attacks on global oil supply.

Brent crude, the international benchmark, is down 5.8% at $64.99 a barrel.

How it could affect South Africans
According to Fin24, a strong rand rally over the past week put the petrol price on track for a cut in the first week of October. This would mean petrol price cuts of between 11c an 24c a litre.

The Automobile Association spokesperson Layton Beard says the massive increase in the global oil price will likely cancel out the forecast price cut.

By Eddie Spence for Bloomberg

President Donald Trump’s tariffs on Chinese imports are getting a lot of blame for slowing the global economy, but it’s all the uncertainty from his Twitter habit and trade policy more broadly that could be even more harmful.

According to a report by Bloomberg Economics’ Dan Hanson, Jamie Rush and Tom Orlik, uncertainty over trade could lower world gross domestic product by 0.6% in 2021, relative to a scenario with no trade war. That’s double the direct impact of the tariffs themselves and the equivalent of $585 billion off the International Monetary Fund’s estimated world GDP of $97 trillion in 2021.

China would be hit harder by the uncertainty factor, with its GDP lower by 1% compared with a 0.6% chunk taken out of America’s economic output, the analysis showed.

“The tweet is mightier than the tariff,” the Bloomberg economists wrote in their report.

The U.S. president’s social media posts on trade, many of which are about China, sometimes appear several times a day and other times not at all. His contradictory takes on the progress of negotiations with Beijing send a chill through businesses that are making decisions about investing and hiring.

A survey released last week by the Federal Reserve Bank of New York found a growing conviction among businesses that tariffs were hitting their bottom line.

The Fed responded to economic headwinds with a rate cut of 0.25% last month. The Bloomberg Economics report said that while monetary policy can be used to mitigate uncertainty shocks, it cannot prevent the damage entirely. If central banks respond to demand weakness, world GDP will be 0.3% lower in 2021 than it would be in a no-trade-war scenario.

By Josh Hall for Prolific London

Retail sales rose by just 0.3 per cent in July, their lowest level since records began.

The figure was down significantly on the 1.6 per cent increase seen in the same month in 2018, and follows what was also the worst June on record.

The survey, conducted by the British Retail Consortium and KPMG, are based on responses from retailers making up an estimated 40 per cent of all British retail sales. Their records began in 1995.

According to the Consortium, “the combination of slow wage growth and Brexit uncertainty” are to blame for the collapse.

But the group also said that last year’s figures had been inflated by the World Cup.

KPMG head of retail Paul Martin said: “Shoppers are notably disengaged overall. The pressure continues to build between online and physical offerings, costs continue to rise and the demands of consumers continue to grow.”

Meanwhile as we reported yesterday the UK service sector recorded a slight and unexpected growth during July.

The performance put it out of kilter with other UK sectors, in which the outlook remains gloomy.

By Deborah Williams for Retail Insight 

June 2019 UK retail sales have been the worst on record, with a 1.3% total basis decline, according to a report by the British Retail Consortium (BRC). June UK retail sales saw a 2.3% increase in 2018.

Covering the five weeks from 26 May to 29 June 2019, the report found that the decline brings the three month average into a decline of 0.1% and the 12 month average to an increase of 0.6%, the lowest since its records began in December 1995.

BRC chief executive Helen Dickinson OBE said: “June sales could not compete with last year’s scorching weather and World Cup, leading to the worst June on record. Sales of TVs, garden furniture and BBQs were all down, with fewer impulse purchases being made. Overall, the picture is bleak. Rising real wages have failed to translate into higher spending as ongoing Brexit uncertainty led consumers to put off non-essential purchases.

“Businesses and the public desperately need clarity on Britain’s future relationship with the EU. The continued risk of a No Deal Brexit is harming consumer confidence and forcing retailers to spend hundreds of millions of pounds putting in place mitigations – this represents time and resources that would be better spent improving customer experience and prices. It is vital that the next Prime Minister can find a solution that avoids a No Deal Brexit on 31st October, just before the busy Black Friday and Christmas periods.”

On a like-for-like basis, June UK retail sales decreased by 1.6% from June 2018. This is lower than the three month and 12 month averages of -0.4% and -0.1% respectively. The report stated that this represents the worst 12 month average since April 2012.

In-store sales of non-food items declined 4.3% on a total basis and 4.1% on a like-for-like basis, over the three months to June. This decline is lower than the 12 month total average decline of 2.8%.

Non-food UK retail sales declined by 2.1% on a total basis and 2% on a like-for-like basis, over the three-months to June. This is also lower than the 12 month total average decrease of 0.8%. The BRC said that this is the worst quarterly decline since February 2009.

KPMG UK head of retail Paul Martin says: “There are few places retailers can hide from the difficult trading conditions that have been hitting the industry for some time. June’s retail performance did little to ease that, with like-for-like sales falling 1.6% compared to last year.

“On the high street, consumers were eager to pull up a pew for the summer’s sporting events, with added interest in the furniture category. Otherwise, consumers largely turned a blind eye to offers in the physical retail space.”

Non-food online sales increased 4% in June 2019, against an increase of 8.5% in June 2018. The three month and 12 month average growths were 3.3% and 5% respectively. Non-food online penetration rate increased to 30.7% last month, from 28.5% in June 2018.

Martin adds: “With 4% online growth, shoppers were thankfully more engaged in this channel, making the most of the added convenience and continued aggressive pricing. Fashion performed particularly well thanks to end-of-season sales and upcoming holidays.

“Pressure on retailers continues to mount and is seemingly coming from all angles: economic, geo-political, environmental and behavioural. Consumer spend is only likely to fall further as things stand, and cost efficiency remains vital. The focus for most in the industry will be preservation and adaptation in order to see them through these tough times.”

Food sales experiences ‘above total average growth’ for June 2019 UK retail sales
Over the three months to June, food sales increased 2.4% on a total basis and 1.5% on a like-for-like basis – an increase above the 12 month total average growth of 2.2%.

IGD CEO Susan Barratt said: “A late start to the summer weather in June compared unfavourably with consistently drier and warmer conditions in 2018, so while year-on-year growth in food and grocery sales last month was small, it is still encouraging.

“If the recent pick up in temperatures is sustained, there’s hope for stronger figures in July. Shoppers feel slightly more positive at the moment, with the percentage expecting to become worse off financially in the year ahead falling from 32% in February to 27% today.”

By Andrew Liptak for The Verge

Walmart has introduced an unlimited grocery delivery service called Delivery Unlimited, as spotted by TechCrunch. The service is an expansion of the company’s existing delivery and pickup efforts, and costs $98 a year.

The company already offered a delivery service for online orders: customers could have items shipped to their nearest store for free, or to their home for a $9.95 delivery fee for each order. TechCrunch notes that this new annual subscription will cost $98 for a year, or $12.95 a month, and allows customers to skip the per-order fee. To use it, customers place their order on Walmart’s site or app, and can select a delivery window for when they want their order delivered.

This annual service comes as Walmart has introduced a number of other initiatives to try and entice online shoppers to its stores, including introducing free, one-day shipping for orders over $35, pickup towers a number of its stores, and even an in-home delivery service that will allow employees into your house to place groceries directly into your refrigerator.

Walmart has been stepping up its efforts against other online retailers in recent months, and Amazon’s Prime membership appears to be the target here. Walmart’s annual fee is lower than Amazon’s $119 annual cost, while Target’s new delivery service with Shipt costs $99 a year, as well as Instacart.

Print is still growing in Africa

GroupM, WPP’s world-leading global media investment group launched the Africa Media Index: its inaugural study on the media landscape in Africa. The study aims to provide insights on trends and knowledge of the media sector and how it affects investment, governance, local business and economies.

This study comprises data from 14 African countries, namely: Ivory Coast; Ghana; Nigeria; Kenya; South Africa; Uganda; Zambia; Namibia; Zimbabwe; Tanzania; Mozambique; Botswana; Angola and Ethiopia. It identifies trends that are relevant to industry investors looking to increase their footprint and reach multiple audiences in a meaningful way across Africa. The report focuses on five key categories which are Economy & Business; Media Landscape; Media Consumers; Technology; as well as Governance & Legislation.

Federico De Nardis, CEO at GroupM Sub-Saharan Africa (SSA), says, “Many companies – both those already on the continent and those wishing to reach consumers and businesses across Africa – often struggle to find consistent and reliable information which gives a clear understanding of the media landscape. The intention of the Africa Media Index is to bridge that gap.”

Africa’s media landscape is a whirlwind of change and growth in activity, and its power can be harnessed by knowledgeable investors. Sub-Saharan Africa hosts 17% of the world population today, but only represents 2% of world GDP, and even less when we look at advertising investment, which is USD 2.6 billion or 0.47% of global investments. However, due to mobile and Internet expansion, strong urbanisation and a booming middle class, the next 30 years should tell a very different story.

The media consumers and media landscape
While the African middle class population is growing impressively, so is their access to technology and media consumption. This is demonstrated through the rising sales of televisions, which now replace radio as a preferred purchase option in places where electricity supply is increasingly available.
Access to the internet also accounts for a large growth in the media landscape, however, internet use is restricted by high data prices in various regions. More than 83% of respondents believe online media is growing significantly, while 75% of them think radio, through internet broadcasting is on a high trajectory. However, the same respondents are also bullish on television, with nearly 62% of positive growth.
In addition, print media is experiencing positive growth, contrary to what is happening in the rest of the world. For example, in Kenya newspaper consumption has grown by 14% in 2018 versus the previous year and 12% in Nigeria according to ‘This Year Next Year’ report, by GroupM Global.

Governance and legislation
Media growth in Africa is beneficial and a contributing factor to deepening democratic processes. In recent years, political uncertainty dominated the business headlines where heightened political tensions saw a military coup in Zimbabwe, a widely disputed election in Kenya, and highly contested elections in South Africa and Nigeria. These might appear as isolated events but they are an amalgam of events that increased media interest in Africa.
Of the surveyed respondents, 49% of East Africans and over 36% Southern Africans think media corruption is “highly prevalent”, while 41% West Africans say the media is hopelessly corrupt. Corrupt state media, bribe taking journalists and self-censorship by the independent press were cited as examples of corruption.
As a result, the risk impact of changes in legislation and regulation has increased considerably as many African governments continue to implement laws governing information and ethical operations of businesses.

Economy and business
When investors seek media investment opportunities, a holistic knowledge of the investment environment is required, including the relevant forces at play in governance, local business and economies that affect the media sector. The sector is influenced by the society it services, and in turn the media influences the societies that hear, read and see its output.
Investment indicators, as opposed to business confidence, for Southern Africa are good overall. Leading in this is South Africa with an overall score of 65.97, which takes three of the top five positions in overall Economy and Business rankings. However Ghana (51.65), and Kenya (47.67), being in the top five, reflects a mixed regional picture. Meanwhile at the lowest of the spectrum on the continent is Mozambique, whose overall score is 34.89.

Technology advancements
One of the biggest challenges for African governments and media houses will be to close the media access gap between urban and rural areas. If this is left unattended, there is an increased risk of widening inequality between those who have access to a plethora of innovative and rich media options (TV and video in all forms: Linear, VOD, SVOD, OTT and all online platforms) and those who are not exposed to it.

Electricity is a necessity for new media expansion for all regions, and West Africa is seen prioritising urbanisation more than others. Southern Africa is viewed as prioritising fibre lines according to 17.66% of respondents, particularly with the South Atlantic Cable System arriving in the region. These respondents have however reported the highest data prices, with three quarters classifying prices as expensive and 33% say data is somewhat expensive, however 40% of them say it is very expensive.

“The 21st century new media wave has been driven by the African people as they are choosing preferred mediums and content. Investors in Africa’s media industries can be assured that African media consumers are the same as media consumers in other markets who are perpetually craving better media services that are interactive and advertising that is created to each market’s unique nuances,” concludes De Nardis.

By Taizo Wada for Nikkei Asian Review

Japanese stationery maker Kokuyo has indirectly taken a 37% stake in compatriot pen maker Pentel through an investment fund, the company said Friday.

Kokuyo, the country’s leading maker of stationery products with a strength in notebooks, will invest 10.1 billion yen ($92 million) in a fund operated by Mercuria Investment, which currently serves as the largest shareholder of Pentel. Kokuyo will become the fund’s, and through it, Pentel’s top shareholder.

Pentel is an unlisted company known for producing the world’s first modern mechanical pencil in 1960. More recently its colorful gel ink ballpoint pen has won a devout following around the world.

Kokuyo aims for growth in Asia, where stationery demand is expected to increase, and other markets by tapping Pentel’s overseas sales network.

Kokuyo only makes about 20% of its stationery-related sales overseas, while Pentel generates over 60% of its revenue abroad through roughly 20 foreign sites. The companies’ products are also complementary, given Kokuyo’s strength in notebooks and Pentel’s know-how in writing instruments.

The fund operated by Mercuria, a private equity company listed on the Tokyo Stock Exchange’s first section that counts the state-run Development Bank of Japan as an investor, acquired Pentel shares from the pen maker’s founding family last year.

Mercuria will continue to contribute to Pentel’s management after Kokuyo’s investment.

“We do not know any information other than what was in the disclosure. We will explore a response going forward,” Pentel said.

Pentel booked sales of 40.9 billion yen in the year ended March 2018. Kokuyo has sales of 315.1 billion yen.

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