News As We Read - 4 sep'13

Thought of the Day:

Did you know?

India:

• No Windows Shopping, Nokia’s Set to Cost Less : Microsoft Corp’s dramatic acquisition of Nokia's global cellphone business will result in a reduction in prices of Lumia handsets in most markets, including India, next year, possibly altering the dynamics of the country’s fast-growing smartphone segment, say analysts. Microsoft early Tuesday morning (India time) said it would buy Finland-based Nokia's phone business and license its patents for over $7 billion, in a last-ditch attempt to compete in the mobile handset market dominated globally by Apple and Samsung. The deal will make Microsoft a hardware-software-services player and better position it to take on its aggressive global and local rivals, say analysts and industry executives. 

• Renault India Sales Down 4% in August : Renault India reported a 4.6% decline in August sales at 3,733 units as compared with 3,916 units in the year-ago period. Renault achieved sales of 45,986 units during January-August 2013, growing over four-fold YoY. “Factors such as inflation, rising interest rates, high fuel prices, and the devaluation of the rupee have been keenly felt in the automobile industry, resulting in an overall de-growth of 9% so far this year,” Renault India ED (marketing & sales) Sumit Sawhney said.

• Kingfisher CEO Gets 4-Cr Pay Package : The company has disclosed that at least five of its employees got an annual pay package of . 1 crore or more in the last fiscal, while as many as 44 staff members got a monthly salary of . 5 lakh and more. Grounded for almost a year now, Kingfisher Airlines has given its CEO Sanjay Aggarwal a pay package of nearly . 4 crore for the last fiscal, during which its headcount nearly halved to 2,851 employees. Aggarwal was paid total remuneration of . 3.99 crore for the fiscal 2012-13, largely unchanged from about . 4.01 crore in the previous year.

• Jet-Etihad Deal to Be Sealed by September 20 : Etihad is likely to complete its purchase of a 24% stake in Jet Airways by September 20 as all regulatory clearances are expected to be in place by then, according to a Jet Airways official who has interacted with government agencies involving in clearing the deal. The deal, once consummated, will see an inflow of $379 million (. 2,500 crore), bolstering India’s capital account. India’s Cabinet Committee on Economic Affairs (CCEA) on late Tuesday cleared a proposal for additional air services between India and Abu Dhabi. On April 24, the day that Jet announced its deal with Etihad, the government had announced the signing of an MoU with the government of UAE, more than tripling the weekly number of seats allocated to carriers flying between India and Abu Dhabi to above 50,000. 

• Bulgari Gets Ready for Second Innings in India : talian luxury goods firm Bulgari has sought the government’s permission to set up exclusive retail stores in India that will sell high-end jewellery, watches and accessories under its ‘Bvlgari’ brand. Bulgari, part of the French luxury behemoth LVMH Group, has made an application to the Foreign Investment Promotion Board (FIPB) for its investment under the single-brand route, according to the commerce ministry’s website. Although details of the proposal are not yet available, Bulgari has finalised a silent partner, a person familiar with the matter said. The other LVMH Group brands, including Louis Vuitton and Christian Dior, also operate independently in the country. 

• BMW Drives into Luxury Compact Segment : German carmaker BMW on Tuesday forayed into the luxury compact segment in India with the launch of a new series priced between Rs 20.90-29.90 lakh. The all-new BMW 1 Series is available in petrol (BMW 116i) and diesel variants (BMW 118d, BMW 118d Sport and BMW 118d Sport Plus). The new offering, manufactured at BMW's plant at Chennai, was unveiled by cricket icon Sachin Tendulkar here. The company will increase investment in its Chennai facility to Rs 390 crore by this yearend from Rs 180 crore announced earlier, a BMW official said after the launch. “We are increasing investment in Chennai plant to Rs 3.9 billion from Rs 1.80 billion. We have also ramped up the capacity at the plant to 14,000 units per annum from 11,000 units,” BMW Group India President Phillip Von Sahr said. 

• Warburg set to buy 350cr stake in Biba : Global private equity fund Warburg Pincus is set to buy a Rs 350-crore minority stake in Indian ethnic wear brand Biba, including purchase of the stake held by Kishore Biyani’s Future Ventures, said people directly familiar with the matter. The deal in which Warburg would be joined by Fearing Capital, a PE firm promoted by Aditya Parekh, son of HDFC chairman Deepak Parekh values Biba at around Rs 1,200 crore. Future Ventures, formerly an investment arm of Biyani’s Future group, had put its 28% stake in Biba along with its 22% stake in designer Anita Dongre’s AND on sale. Sources said Warburg plans to mop up the Future Ventures stake, and an additional 3-4% stake will come from the promoter and issuance of new shares. General Atlantic is likely to pick up Future Ventures’s stake in AND, sources added. 

• M&S can retail sub-brands if parent’s on logo : The government, which had given single-brand retailers an in-principle approval to sell sub-brands, has now come up with clear guidelines on how the companies doing so can go about it. Companies such as Marks and Spencer (M&S), which has sub-brands like Autograph, Blue Harbour, North Coast and Indigo Collection, can sell these in India if they mention both the sub-brand and the parent on the logo of the apparel. At present, either of the two can be seen on the logo.This relaxation is significant as the company came under the government's scanner for a possible violation of the foreign direct investment (FDI) policy in single-brand retail, which barred companies from selling multiple brands from one store. Marks & Spencer India is a 51:49 joint venture between the British retailer and Mukesh Ambani-led Reliance Retail, and it has more than 30 stores in the country.

International:

• Android KitKat unveiled in Google surprise move : The news comes as a surprise as the firm had previously indicated version 4.4 of the OS would be Key Lime Pie. The decision to brand the software with the name of Nestle's chocolate bar is likely to be seen as a marketing coup for the Swiss food and beverage maker. However, Google told the BBC that it had come up with the idea and that neither side was paying the other. "This is not a money-changing-hands kind of deal," John Lagerling, director of Android global partnerships, told the BBC. Instead, he said, the idea was to do something "fun and unexpected". However, one branding expert warned there were potential pitfalls to such a deal. "If your brand is hooked up with another, you inevitably become associated with that other brand, for good or ill," said Simon Myers, a partner at the consultancy Prophet. "If that brand or business has some reputational issues that emerge, it would be naive to think as a brand owner that your good name, your brand equity, would not be affected."

• Saks to Fete Dior With Store Windows : If the Dior windows that just went up at the Saks Fifth Avenue flagship were a René Magritte painting, the winking title might be “This Is Not Surrealism.” The French fashion house’s latest takeover of a major department store incorporates invisible mannequins and warped French moldings across 17 windows lining Fifth Avenue plus 49th and 50th Streets. They dovetail with the surrealist touches in the fall women’s ready-to-wear collection by Raf Simons. All other categories of Dior products from men’s wear to fine jewelry are also showcased.

• Japan Retailers' Sales Rise in August : Japanese retailers' sales increased in August, as sweltering temperatures drew customers inside air-conditioned stores in search of cool, lightweight clothing and other products.Fast Retailing said Tuesday that Uniqlo's August same-store sales increased 28.9 percent, with customer numbers rising 33.4 percent. "Same-store sales generated another strong performance in August, with the hot weather continuing throughout the month, and our advertised product ranges and other summer items selling well," the company said.

• Bargain Booze owner Conviviality takes steps to move upmarket : Conviviality Retail, the company behind the Bargain Booze chain of cut-price off-licences and Thorougoods convenience stores, has taken an initial step towards upmarket wine retailing in its first deal since its Aim debut at the end of July. The company has bought Wine Rack, the chain of 22 off-licences based in Greater London, for £1.65m in cash.Conviviality raised £66m when it floated shares at £1 each a little over a month ago in one of the Alternative Investment Market’s biggest initial public offerings this year. It said the money would be used to pay off debt, buy out its private equity backers, incentivise its 461 franchisees, and provide the capital for expansion.

• LinkedIn plans to sell $1bn in stock : LinkedIn plans to sell $1bn worth of stock in a secondary offering, two years after one of the most successful social-media initial public offerings to date and having seen its valuation more than double so far in 2013. LinkedIn said proceeds would increase its financial flexibility and fuel expansion, including potential acquisitions.The company’s net cash stood at $873m at the end of June, so the move to raise more cash prompted speculation that it might be gearing up for substantial acquisitions. The company previously acquired Pulse, a mobile newsreader, and SlideShare, an online presentations site, and is investing heavily behind a new content strategy to improve engagement on the site.