Daily News Digest- 18th Aug'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Mahindra Retail gets a new CEO: Mahindra and Mahindra Ltd has changed the chief executive of Mahindra Retail Pvt. Ltd, which runs the Mom and Me and Beanstalk chain stores, after the kids wear retailer went on an expansion spree for several years that led to hundreds of crore in losses. Mahindra has brought in Prakash Wakankar from its private equity arm Mahindra Partners to replace K. Venkataraman as CEO at Mahindra Retail. Wakankar is a former CEO of the Indian business of confectionery maker Perfetti Van Melle and also headed Mahindra Holidays and Resorts in a brief stint more than a decade ago. Venkataraman, who started the Mahindra Retail business more than five years ago, will take on a role at Mahindra Partners, said Mahindra Retail chairman Zhooben Bhiwandiwala.

• Jabong Sips Coffee to Fuel Reach: In dozens of small towns, online retailers can't deliver customers' goods at their doorstep because of challenges ranging from poor road connectivity to fear of robbery. Jabong, one of India's biggest fashion retailers, is doing the next best thing with its `NextDoor' service where customers can pick up their order at the nearest coffee shop, petrol station or tour operator. “We are sitting on supply chain opportunity,“ said Praveen Sinha, cofounder and managing director of the Delhi-based online fashion retailer which is piloting the most extensive initiative of its kind by an Indian company. The trial for the pickup service will start this week in 39 towns, among them Murshidabad in West Bengal, Chandausi in UP, Dahod in Gujarat and Udhampur in Jammu & Kashmir. “Our hypothesis is that if we can provide convenient delivery support then there is potential to get 70% of our demand from nonmetros,“ said Sinha, whose company is the second-largest online fashion retailer after Myntra, which was acquired by Flipkart earlier this year.

• Online Retailers Rope in Foreign Designers: Online fashion retailers Myntra.com and Jabong.com are increasingly working with international designers to create global standard private brands of fashion apparels and accessories. Myntra.com has tied up with Italian designer Vanni Lenci to create a special line for its Rodster private brand while Jabong.com is setting up a design-cum-branding office in London to take its private brands to the next level. The two premier Indian fashion e-commerce portals first sold their own locally created brands. Then they went heavy on global brands such as Mango, Dorothy Perkins and Steve Maddens. Now, they are trying to create global standard lines of fashion and accessories to tap the growing market for such products in the country.

• Ikea Locks Horns Over Brand Name with Varanasi-based Fabric Maker: Swedish retailer Ikea has objected to a Varanasi-based fabric maker's brand name Ekaya on the grounds that it can create confusion among its customers as it sounds pretty similar to its own and urged the Registrar of Trademarks to strike it down. The $35-billion furniture and home furnishings company , the world's largest single-brand retailer, is readying to start its operations in India after it got approval from the Foreign Investment Promotion Board (FIPB) last year to invest about . 10,500 crore to build a chain of ` stores in the country . Ikea had challenged the brand name in April last year, saying that its trademark and goods had a strong presence in India and the company enjoyed an international reputation. Hearings are yet to begin in the case. “The impugned trademark (Ekaya) applied for is in all essential respects identical with and deceptively similar to the opponent (Ikea)'s said trademark name,“ Ikea said in its notice of opposition. “Even impugned goods specified for in the application are the same description to the same goods and business of the opponent (Ikea).“

• Sparks Fly between Offline & Online Stores for Diwali: Ahead of Diwali, there's a battle brewing between online and offline. Brick-andmortar retailers, backed by makers of electronic devices and phones, are resolved to meet the virtual challenge head-on with the economy showing signs of a recovery after years of sluggish growth and Indians feeling confident enough to start loosening their purse strings again. On Saturday, Essar Group-owned The Mobile Store launched a broadside against e-commerce sites with newspaper jacket ads offering various goodies -free accessories, cash back, etc -for purchases made from the country's largest cellphone retail chain. More such offers from leading retailers are in the offing. Electronic and cellphone brands are eager to stop online discounting and boost the morale of physical stores battling sluggish sales, helping chains such as Croma, Reliance Digital, UniverCell and Future Group woo paying customers. Brands such as Samsung and Sony are also planning to pitch in with money for joint advertisement campaigns and offline deals. To be sure, brands such as Motorola and Xiaomi have successfully adopted an Internet-only strategy . Both the companies have successfully sold their phones through Flipkart, eschewing the brick-and-mortar route. But while online sales still constitute a small part of overall sales in India, real-world retailers are hoping that they can stave off the kind of shift to online that has taken place in developed markets.

• Jet, Vistara Plot the Second Coming of Full-service Airlines: Jet Airways and the yet-to-be launched Vistara are poised to offer more full-service options to Indian airline passengers who are used to budget options, although analysts point out the move may be expensive and take time. Before Kingfisher Airlines wound up services in 2012, full-service carriers, including Jet Airways and Air India, used to fly over 50% of the passengers. Currently, low-fare carriers such as IndiGo, SpiceJet and GoAir rule the skies, offering about 80% of the nation’s airline capacity and carrying over 65% of the fliers. They have also started offering premium services, which will make the shift to full-service even more competitive. Air India offers a large part of its capacity in the full-service space. Jet Airways has announced the dissolution of the JetKonnect brand and will offer only fullservice capacity to Indian consumers. Vistara, a joint venture between Tata Sons and Singapore Airlines, plans to launch premium full-service capacity in the country towards the end of this year. While Indian consumers are set to get a large number of full-service options, getting price-sensitive passengers to pay for premium services may be a daunting task.

• Cleartrip Hopes to Break Even in FY15: Travel portal Cleartrip is hoping to break even this financial year and make a net profit in the next year, backed by its large scale innovation on its products, a tight leash on costs, growth in hotel room sales and air ticket sales from flash sales, said its chief operating officer recently. Freshly capitalised from a $5.4 billion investment from its investor Concur Technologies, the portal is in no hurry go for another round of fund-raising nor are there any immediate plans for an IPO, Stuart Crighton told ET in an interview. “I think the important thing for us right now is to focus on the opportunities and not get too distracted with the exits,” said Crighton.

• Diageo CEO takes pay cut in FY14, no hike this year: Top spirits maker Diageo’s Indian-origin CEO, Ivan Menezes, has seen his pay package decline in his first year at the top post and would not get any salary hike in the second year as well. The UK-based company cited sluggish financial performance in some key markets. CEO, Ivan Menezes, has seen his pay package decline in his first year at the top post and would not get any salary hike in the second year as well. The ond year as well. The UK-based company cited sluggish financial performance in some key markets. Menezes was paid nearly 7.8 million pounds (Rs 80 crore) in the fiscal ended June 30, 2014.

International:

• Coca-Cola buys 16.7% stake in Monster Beverage: US drinks giant Coca-Cola has bought a 16.7% stake in Monster Beverage in a cash deal, as it looks for growth away from fizzy drinks. In the $2.15bn (£1.3bn) deal, Coca-Cola will transfer its worldwide energy business to Monster. In exchange, Monster will transfer its non-energy business, which includes Peace Tea and Hansen's Natural Sodas, to Coca-Cola. The deal gives Monster access to Coca-Cola's global distribution system. For Coca-Cola, the partnership will give it the opportunity to increase its market share in the fast-growing energy drinks market.

• Signa Assumes Full Control of Karstadt: Signa Retail GmbH, a subsidiary of Signa Holdings, is fully taking over the German Karstadt department store group from Nicolas Berggruen, the Austrian real estate group said Friday. The deal, which comes into effect next week, involves no financial reimbursement to Berggruen Holdings. Signa Holdings already owns a 75.1 percent stake in the three Karstadt luxury department stores — KaDeWe in Berlin, Öberpollinger in Munich and Alsterhaus in Hamburg — the 28 Karstadt Sport stores and numerous Karstadt retail properties. In contrast to Signa’s previous call option on the remaining 83 Karstadt department stores, the new deal will give Signa 100 percent ownership of the 83-door chain as well as full ownership of the Karstadt Premium department stores and Karstadt Sport stores. The takeover must be approved by the antitrust commission.

• Barbie-Inspired Line to Launch This Fall: Mattel Inc. will launch a wave of Barbie-inspired apparel and accessories collections this fall as part of collaborations with Lord & Taylor, Forever 21 and Los Angeles-based contemporary label Wildfox. The partnerships, led by Jessica Dunne, Mattel’s general manager and senior vice president, consumer products, signify an effort to reestablish Barbie as a fashion icon to today’s consumer. “I think what people pay attention to is Barbie the toy, and what we’re trying to focus on is that Barbie is a brand much bigger than an 11-inch fashion doll,” Dunne explained. “This fall really is the start of what is a multiyear focus and priority for us.” 

• Retailers Struggle With Consumer Caution: Will the consumer ever cheer up? That seems to be the ongoing question as a quartet of retailers reported second-quarter results, providing more evidence — if any was needed — that shoppers are still cautious about their spending and stores continue to find it hard to gain any traction as they head into the second half of their fiscal years. The companies — Wal-Mart Stores Inc., Kohl’s Corp., Nordstrom Inc. and J.C. Penney Co. Inc. — reported some degree of improvement in business trends over the difficult first quarter. But, as Macy’s Inc. acknowledged on Wednesday when it reported profit improvement that fell short of Wall Street’s estimates, consumers remain uncomfortable with what they deem to be an uncertain economic environment.

• Wal-Mart Updates Made in USA Progress: Wal-Mart Stores Inc.’s second U.S. manufacturing summit in Denver on Thursday was filled with speeches from top company executives, feel-good videos of factory workers and testimonials from Wal-Mart suppliers, who spoke about their success with the retailer. American government officials were also in attendance. Maria Contreras-Sweet, administrator of the Small Business Administration, said, “There’s a renaissance in small manufacturing [in the U.S.]. Last year, more than 1,300 manufacturing companies opened their doors in the U.S. Small businesses account for 45 percent of all manufacturing jobs, or five million jobs.” “Ultimately, this business is about people,” said Doug McMillon, president and chief executive officer of Wal-Mart Stores Inc. “We’re both committed and excited about the U.S. manufacturing initiative.”

• Century 21 Senior Buyer Ernie Schimel Retires: Ernie Schimel, the senior buyer at Century 21 who pioneered the off-price chain’s European business, retires today after 52 years at the company. The 88-year-old Schimel launched Century 21’s European business in the early Eighties, which became a differentiator for the New York-based retailer. The genesis was when Schimel took a trip to Italy, where he scoured the country for great merchandise, driving coast to coast a dozen times and meeting with different designers and vendors and negotiating for discounts. “I loved every day at Century 21, but after 52 years it was time to retire. I want to focus on spending time with my family,” Schimel said. His family lives in Bradley Beach, N.J. “The most challenging part of the job was getting top designers early on in my career. What I liked most about Century 21, was that Mr. Gindi, my mentor, gave me free hand.” He was referring to the late Sonny Gindi, cofounder of the store.

• Tony Assorgi Joins Buffalo in Men's Post: Tony Assorgi has joined Buffalo David Bitton in the new post of vice president of sales for the men’s division. He reports to Todd Howard, president and co-chief executive officer of the firm. Assorgi was most recently senior vice president of sales for the men’s division of Li & Fung and of the Oxford division previously owned by Oxford Industries Inc. Earlier in his career, he held management posts at Marc Ecko Enterprises and Tommy Hilfiger. Howard called Assorgi “a smart and energetic leader with a wealth of merchandising and management experience in men’s wear” who can help foster Buffalo’s global growth and expansion.

Tech:

• World's first 'smartphone' celebrates 20 years: Never judge a phone by its cover. This chunky, black box was in fact the world's first 'smartphone'. The IBM Simon went on sale to the public on 16 August 1994 and combined mobile phone technology with a wide range of computing features. To mark the 20th anniversary, London's Science Museum is putting it on display in its new Information Age gallery. "The Simon wasn't called a smartphone back then," said curator Charlotte Connelly. "But it had a lot of the features we see today. It had a calendar, it could take notes and send emails and messages and combined all of this with a cell phone." Weighing in at 500g (1.1lb), the Simon was not exactly pocket-sized. However, Ms Connelly insisted the design was ahead of its time.

• Facebook Adds 'Satire' Tag to Fun Articles: For those who like parody news outlet The Onion and post those fun articles on Facebook, the social media website is going to add a "satire" tag to their news feed. If a user clicks through an Onion article and returns to their news feed, they will be auto tagged with "Satire", Ars Technica reported. This is how it works. If a friend posts an Onion link to his or her Facebook feed, click on it for a laugh. Once you are done at The Onion and come back to your desktop or laptop browser, Facebook will generate a box with that article's headline and the word "satire" in brackets. According to Facebook, "We are running a small test which shows the text 'Satire' in front of links to satirical articles in the related articles unit in News Feed".

• Samsung extends deal as Olympics top sponsor to 2020: South Korea’s Samsung has extended its top sponsorship contract as an Olympics worldwide partner to 2020, the International Olympic Committee (IOC) said on Sunday. Samsung, who first signed up as a top sponsor with the IOC in 1998 and was a local sponsor at the 1988 Seoul Olympics as well, will support all Games up until and including Tokyo 2020. “We are delighted to be able to continue our partnership with Samsung,” said IOC President Thomas Bach in a statement. “The funding generated by the TOP Programme directly supports the staging of every Olympic Games, as well as every one of the National Olympic Committees, enabling athletes from all over the world to prepare for and compete at each Games.” The 2016 summer Games will be held in Rio de Janeiro while the 2018 winter Olympics will be staged in South Korea’s Pyeongchang. Although it does not reveal contract details of its sponsorship agreements, the deals with its top sponsors generate an estimated 100 million per quadrennium.

• Sub-$200 Phones Help Android Grow iOS Lead: The global smartphone market reached a new milestone in the second quarter of 2014, moving past the 300 million-unit mark for the first time in its history. According to International Data Corporation (IDC), vendors shipped a total of 301.3 m smartphones in Q2, up 25.3% from the 240.5 m units shipped in the second quarter of 2013.

• Amazon's New Secret Weapon: A Credit Card Reader: Not content with dominating online retail, Amazon.com is looking to muscle its way into your local mom-and-pop shops with a new credit card reader. The company on Wednesday unveiled Local Register, which allows small merchants to swipe credit cards using a tablet or smartphone. Local Register will go head-to-head with Square and eBay's PayPal, both of which have similar devices. Unlike Square and PayPal, however, Amazon doesn't seem intent on making this payments-processing business profitable. Instead, it can undercut the competition to gain market share and gather valuable consumer data from brick-and-mortar retailers.

• Ask.fm bought by Ask.com and Tinder owner: The controversial social network Ask.fm has been bought by the owners of Tinder and Ask.com for an undisclosed fee. The site, where members answer questions posed by others, has been linked to teenage suicides in the UK and elsewhere and has been criticised for not doing enough to prevent cyberbullying. IAC, the US company behind the deal, said it would invest "millions" into improving safety on the site. Ask.fm's founders will leave the firm. The New York state attorney general, Eric Schneiderman, announced a safety agreement with the new owners.

• Reversible USB cable design finished: The design for the new reversible USB interface - the standardised connection for data transfers between electronic devices - has been finished. It means users will no longer have to worry which way round the part is facing when plugging it into a device. The new USB Type-C is small enough for mobiles but "robust enough for laptops and tablets", its designers said. But the new USB cables will not connect into the current ports that are found on millions of devices. Specifications are now finalised but the rollout will take time as matching ports are included in new devices. Pictures of renderings of the new USB were first posted online by tech websites such as Cnet. The group developing the next generation of USB cable and connector consists of Hewlett-Packard, Intel, Microsoft, Renesas, STMicroelectronics and Texas Instruments. The agreed exact specifications have been passed back to the non-profit USB Implementers Forum.