News As We Read - 23rd Aug'13

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India:

• Bajaj Corp Acquires Nomarks for 150 cr : Bajaj Corp, consumer goods firm of the Shishir Bajaj group, has acquired Nomarks, the country’s second largest anti-marks brand, from Delhi-based Ozone Ayurvedics to make a foray into the skin-care market. “The acquisition is a strategic move as it enhances our presence in the personal care market and gives us an entry in to the skin care category,” Kushagra Bajaj, chairman of Bajaj Corp, said in a statement. Bajaj and Ozone Ayurvedics promoter SC Sehgal would not comment on the deal size. An official involved with the developments said the deal is estimated to be close to . 150 crore.

• Coca-Cola to Invest $5 billion in India by 2020 : Beverage maker Coca-Cola will invest $5 billion (about . 32,500 crore at current rates) in India by 2020 as it had earlier planned, a top executive has said, adding that the US-based company is not too perturbed about the economic downturn in the country. In India to inaugurate one of the company’s biggest bottling plants set up by its leading franchise bottler Moon Beverages in Greater Noida just outside Delhi, Coca-Cola’s executive vice president and president of Coca-Cola International Ahmet C Bozer said on Thursday, “Our investments are on track as we build scale, manufacturing and distribution capability... This plant will help catalyse local growth and development.” Bozer said the company was confident that India would deal with the ongoing financial crisis. “We are confident India will come out of it. The world is currently undergoing an economic transition and problems faced by India are not unique to the country,” Bozer added. Moon Beverages has invested over . 140 crore ($23 million) on the plant, which has four lines for cans, aerated drinks, juices, water and sports drinks, and packaged water. The can line for sparkling beverages is the second of its kind for the company in India.

• Retailers Focus on Consumer Connect to Beat Slowdown : Top consumer product marketers and retailers believe the current slowdown in demand will ultimately help them win more loyal customers as they are working on consumer connect. “In slowdown, do what is right for the consumers. When the cycle turns, we will be a far more consumer-centric company than what we are today”, Manish Tiwari, executive director  sales & customer development at Hindustan Unilever, said at the ET International Retail Leaders Summit in Mumbai. The country’s top consumer goods firm, world’s largest coffee retail chain Starbucks of the US and India’s largest retailer Future Group all acknowledged a slowdown in their sectors, but said continuing with planned investments is important for a long-term growth. Retailers’ sales growth has slowed as rising prices and slowing economic growth are making Indians check their household shopping list and, in some cases, shift to lower-priced products. Retailers feel that if consumer companies collaborate with modern trade by clubbing products even of adjacent segments, it could help increase volume growth as well as support weaker segments in the basket.

• Bharti in Talks to Sell its Sri Lankan Ops to Etisalat : Bharti Airtel, the world’s fourth largest telecom operator by subscribers, is in advanced discussions to sell off its Sri Lankan operations to Abu Dhabi’s Etisalat, said two persons aware of the development. According to one such person, Standard Chartered Bank is advising the Indian company in the transaction. Bharti Airtel Lanka, which has a subscriber base of 1.7 million, has been valued between $110 million and $130 million. Etisalat is Sri Lanka’s third-largest operator with 4.5 million subscribers and it will move up to the second spot if the deal goes through. Responding to a questionnaire on the sale of its operations to Etisalat, Airtel said as a policy it didn’t respond to market speculations. Standard Chartered declined comment while Etisalat could not be reached for comments.

• Walmart may be exploring ways to exit Bharti JV : US retail giant Walmart is learnt to be in talks with Sunil Mittalled Bharti group to explore ways to exit the six- year- old 50: 50 joint venture in cash- and- carry (wholesale) business. This could mean an end to the talks for a possible partnership between the two firms in the multi- brand retail space — less than a year after 51 per cent foreign investment was allowed in the sector. A corporate lawyer close to the development said the American retailer was discussing the sale of its equity in the JV with Bharti. According to him, buyback of Walmart shares by Bharti was imminent. “ Walmart is not happy with the way the JV is progressing,” he said. According to a source in the know, the ongoing Enforcement Directorate ( ED) probe into Walmart’s $ 100- million March 2010 investment in buying compulsory convertible debentures (CCDs) in Cedar Support Service, acompany owned by Bharti Enterprises that controlled Bharti Retail, is seen as the biggest hurdle for the JV. Walmart’s investment in Cedar is being investigated for alleged violation of the Foreign Exchange Management Act ( Fema), as FDI in multi- brand retail was not allowed in 2010. Without getting aclean chit on the ED probe, it’s tough for the Walmart- Bharti JV to proceed, it is believed.

• Textile exports seen rising : The textile sector could see a jump of five to 10 per cent in exports this financial year on the back of a falling rupee and higher foreign demand, say exporters, who expect a turnaround after a bleak 2012- 13. Last financial year, textile exports fell five per cent to $ 31.7 billion in from $ 33.4 billion the year before. However, textile exports rose marginally in the first quarter this financial year, signalling a change in the trend. In the April- June quarter, textile exports rose 0.3 per cent to $ 7.79 million, compared with $7.76 million in the year- ago period, according to the Foreign Trade Statistics of India. “There should be a five to 10 per cent increase in overall textile export as a result of the falling rupee and also because we are becoming more competitive in this sector. Hence, there would be a turnaround after a gap of few years in the textile industry," said Amit Goyal, president, Confederation of Indian Apparel Exporters.

• Vodafone trades off F1 branding for a network among SMEs : The Formula One ( F1) India Grand Prix is still over a month away, starting in October. Brands are readying their plans to get you as close to the tarmac- burning action as possible. But if you had enterprises, and not individuals, as your audience, how would you rope them in for the carnival? Booking plum seats for clients is cliched. Vodafone India, which is a late- entrant in the enterprise solutions space as a telecom partner, is offering a slice of branding space available to it as part of its global sponsorship deal to another company, all to actually win over clients. Harnessing its global branding sponsorship of McLaren, one of the front- runner teams in the sport, it is offering small and medium enterprises (SMEs) a chance to brand McLaren’s racing cars for free. One business could see its name right under the driver’s helmet on a car, a spot where all eyes are trained during a race. Like many of its peers, Vodafone has been eyeing growth from SMEs. However, reaching out to this segment is adaunting task, as the sector is hugely unorganised and fragmented across the country. So, instead of setting off to look for its customers, it is getting them to congregate through this branding initiative.

• Internet population in India hits 74 mn, is 3rd largest in world : India with 73.9 million internet users is the world's third largest Internet population, overtaking Japan but behind China and the US, according to research firm ComScore. Rising number of mobile audience, devices and consumption habits reveal that consumers are becoming more platform agnostic in their digital media consumption and switch devices to stay up to date on email, news, social media, said ComScore's India Digital Future in Focus 2013. "Riding on a 31 per cent year-on-year increase, India's online population grew to 73.9 million. With an extended online universe in excess of 145 million the market is at a tipping point for online businesses. India is the world's third largest Internet population," the report said. The country overtook Japan by adding 17.6 million users in 2012, the ComScore report said.

International:

• Barnes & Noble Ends Breakup Push for Now for Nook Revival : Barnes & Noble Inc. (BKS)’s move to shelve a breakup plan for now steps up pressure on the biggest U.S. bookstore chain to stem losses at its e-book division and hatch a new plan for coping with the shift toward digital publications. “They are stuck,” said Michael Souers, an analyst for Standard & Poor’s in New York. While the company could become profitable by shedding the Nook business, e-books will continue to take market share from printed books. Founder Leonard Riggio, 72, who is also the chain’s chairman and largest shareholder, said yesterday in a filing that he dropped the plan he floated in February to buy Barnes & Noble’s website and almost 680 stores. The shares plunged, erasing their gain for the year, as the company also reported a fiscal first-quarter loss that was bigger than analysts estimated. Sales at the Nook unit, once the centerpiece of a plan for navigating from printed to digital books, declined 20 percent in a third straight drop. Rather than banking on a breakup, Barnes & Noble now will focus on better integrating its retail, college and Nook units, President Michael Huseby said in an interview. The company may revisit breakup prospects in the future, he said.

• ‘Yahoo! beats Google in US’ : Yahoo! Inc attracted more US visitors than Google Inc during July for the first time since May 2011, indicating that turnaround efforts by Chief Executive Officer Marissa Mayer are gaining traction. More than 196 million web users spent time on the largest US web portal’s sites during the month, up 21 per cent from a year earlier, comScore Inc said in a statement on Wednesday. That’s 4.3 million more than Google, operator of the world’s mostpopular search engine, up less than one per cent. The report doesn’t include Tumblr, which Yahoo! bought earlier this year, or mobile users, comScore said. Mayer has been pushing Yahoo!’ s developers and designers to make improvements to the Sunnyvale, California- based company’s products and services since she was hired in July of last year from Google. She revamped the home page, email and weather services with sleeker designs and other improvements. More users will lead to better financial results, she said in July. “Hire and retain a great team; build inspiring products that will attract users and increased traffic; that traffic will increase advertiser interest and ultimately translate to revenue,” Mayer said on a call with analysts. “People, then products, then traffic, then revenue.” That chain reaction hasn’t started yet. Second- quarter revenue, minus sales passed to partner sites, fell one per cent to $ 1.07 billion and also missed analysts’ estimates of $1.08 billion.

• At Apple, Tim Cook leads a quiet cultural revolution : Shortly after signing on as chief operating officer at Facebook, Sheryl Sandberg was looking to connect with people in a similar role – No. 2 to a brilliant and passionate young founder. She called Tim Cook . "He basically explained nicely that my job was to do the things that Mark (Zuckerberg) did not want to focus on as much," Sandberg said of the 2007 meeting that lasted several hours with the chief operating officer of Apple Inc. "That was his job with Steve (Jobs). And he explained that the job would change over time and I should be prepared for that." While Sandberg has enjoyed a steady run at Facebook, it is Cook's job that has changed radically since then. Now, the man who was handed one of the more daunting tasks in business – filling the shoes of the late Jobs and keeping Apple on top – may himself need a spot of advice. Two years into Cook's tenure, Apple is expected to unveil a redesigned iPhone next month. It will be a key moment for Cook. The company he inherited has become a very different creature: a mature corporate behemoth rather than a scrappy industry pioneer, with its share price down 5% this year, despite a recent rally. The S&P 500 is up about 15% this year.

• PS4 launch date announced by Sony : Sony will launch its Playstation 4 (PS4) games console on 15 November in North America and 29 November in Europe. The PS4 launch dates were announced by Sony Computing Entertainment Europe (SCEE) at the Gamescom 2013 convention in Cologne, Germany. First unveiled at the Electronic Entertainment Expo (E3) in June, the PS4 is black with an angular design, and is powered by an X86 CPU and an enhanced PC graphics processor, with 8GB of memory. It comes with a new Dual Shock 4 controller, which has a front touchpad and a motion sensor bar. The sensor bar will communicate with a motion-sensing camera on the console to identify players and use motion control. The games console will be available in 32 countries worldwide, priced at £349 in the UK and $399 in the US. The price of the previous-generation PS3 will also be cut to €199 in the European market and $199 in the US. A UK price cut was not announced.

• Gap Profits Rise 25% : Gap Inc. reported today that second quarter net earnings rose 25 percent to $303 million from $243 million. Sales were up 8 percent to $3.87 billion compared with $3.58 billion in the second quarter a year ago. The strong growth was a standout in a retail results reporting season where most companies are missing analysts' estimates and revising their forecasts downward.

• J.C. Penney Adopts Poison Pill : J.C. Penney Co. Inc.’s board adopted a shareholder rights plan for a term of one year. The plan, known as a poison pill, is an antitakeover mechanism to discourage new investors from gaining control of the company. The plan was not adopted in response to any effort from an investor to acquire control of Penney’s, the company said. By putting the plan into place, the board is taking a proactive stance as a preemptive measure to make it more difficult for someone to come in and try to take control of the retailer. That’s achieved by diluting the stake of the would-be acquirer, who can’t take part in the plan, and by raising the price of the stock. The plan will continue in effect until Aug. 20, 2014, unless the rights are redeemed or exchanged for shares of common stock by the company on an earlier date.

• Sears' Q2 Loss Widens : The second-quarter loss at Sears Holdings Corp. was wider than a year ago, but the company said its membership program gained traction in the period. For the three months ended Aug. 3, the net loss was $194 million, or $1.83 a diluted share, compared with a loss of $132 million, or $1.25, in the year ago quarter. The results included a gain on the sale of assets of $58, after tax and noncontrolling interest, in connection with certain U.S. and Canadian stores and leasehold interests. Revenues fell 6.3 percent to $8.87 billion from $9.47 billion. Same-store sales fell 2.1 percent at the Kmart nameplate, and fell 0.8 percent at Sears domestic stores. Sears Canada stores saw same-store sales fall 2.5 percent. The company said its Shop Your Way membership program gained traction in the quarter, with members generating over 65 percent of revenues at Sears domestic stores and Kmart, versus over 55 percent a year ago.

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