Daily New Digest- 4th Sept'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• CBI Chief Admits Meeting Execs, Denies any Favours: CBI Director Ranjit Sinha has admitted meeting two senior Reliance Anil Dhirubhai Ambani Group (ADAG) officials at his residence but claimed he had done them no favours. The CBI director, who is in the eye of a storm after activist-lawyer Prashant Bhushan alleged that Sinha had met persons linked to those accused in the 2G and coal scams, claimed a “deep-rooted“ conspiracy was being hatched against him and expressed apprehension that he was under surveillance. The Supreme Court will examine Bhushan's allegations on Thursday. The lawyer has alleged that according to a diary recording the particulars of visitors at Sinha's 2, Janpath residence, he met the two ADAG executives frequently. “Yes, I have met the two ADAG officials. So what? I know them for the past 30 years. It is my duty to meet people who have a grievance against my officers. The question is whether I favoured them. Meet ing anyone is not banned,“ the CBI chief said. Sources in the government said a “close watch“ was being kept on the proceedings in the Supreme Court. Bhushan has asked the apex court to direct Sinha to recuse himself from the 2G case. He has further alleged that Sinha has also met those accused in the coal scam. “It is a very serious matter. If there is an adverse ruling or observation against the CBI director by SC, his position may be untenable. The Modi regime has put a high premium on probity and propriety in public life,“ a senior government functionary told ET. Three ADAG officials are among those accused in the 2G case. Sinha also alleged he was being subjected to snooping as the two diaries maintained at his residence never recorded visitors' details. “I don't know from where this third diary (mentioned by Bhushan) has emerged. Somebody is keeping a watch on me,“ he said. Asked who could be behind this, Sinha said: “I don't know. If this is corporate warfare and someone has personal enmity against me, I don't know. What are these people planning to do? This is character assassination, a deep-rooted conspiracy against me.“ Defending his decision to meet officials of companies whose actions are being probed by CBI, Sinha asserted it was not wrong to meet those close to the accused or even the accused themselves since the head of CBI could not live in isolation. “Where else will those with complaints go? They come and tell me that there has been injustice, please do something. I look into the matter, speak to the investigating officer or joint director to know the progress of the case. Are they terrorists? Do you want me to isolate myself from everybody and live in my ivory tower?“ Sinha said on Wednesday.

• Mallya may Face More Bank Heat: The pressure on Vijay Mallya is likely to intensify as private sector lenders Axis Bank and Federal Bank may begin the process of declaring him a `willful defaulter', putting them in a position to seize assets pledged as collateral and invoking personal guarantees. This comes after state-owned United Bank of India declared Mallya and three directors of Kingfisher Airlines as willful defaulters on Monday following a Calcutta High Court order. The company owes banks Rs 7,000 crore. Other public sector banks that are owed money have already begun the exercise. “We are also in the process of declaring him as a willful defaulter,“ said a Federal Bank executive, who didn't want to be named. “He is a willful defaulter for United Bank of India. Others will follow suit. We are putting out our demand for them to come and explain their stance. We will have to follow a process.“ Federal Bank has an exposure of around Rs 90 crore to the airline company while Axis Bank has an exposure of around Rs 50 crore. “As a matter of policy, the bank doesn't speak about specific client transactions. We therefore regret our inability to comment on the referred matter,“ an Axis Bank spokesperson said. The lender is said to be considering such a move.

• Cosmetics Tested on Animals to Face Ban Soon: Almost six months after India first banned testing of cosmetics on animals, the government is now all but set to prohibit even the import of such products. Speaking to ET, Union Health Minister Harsh Vardhan said the ban would soon be notified as a new rule under the Drug and Cosmetics Act, 1945, in the Gazette. The impending move, which would apply to shampoos, makeup, fragrances, hair, nail and skin-care products, concedes to the long-standing concerns raised by animal welfare organisations, but could face stiff opposition from cos metics brands. “The proposal just needs minister's nod. The file is with him and could be approved any day,“ said a senior health ministry official. The CEO of a top cosmetics firm said, “The impact will be huge since many firms will need to alter countries from where they import. IBHA is engaged in hectic lobbying with the ministry concerned.“ The proposed ban drew a guarded response from the industry. An official at IBHA, the industry body representing 32 firms including Chanel, Unilever, P&G, L'Oreal, Oriflame and Avon, told ET, “We will comment only once the final notification comes. Right now, there's nothing to say.“ “P&G does not test its products or ingredients on animals anywhere in the world unless required by law. We will continue to work with outside scientists, governments including India, policy makers and the industry to develop alternatives to animal research, which we believe is the only way to overcome the need for animal testing globally,“ a P&G spokesperson said. According to industry estimates, the Indian cosmetics industry , currently valued at $950 million, is likely to treble to $2.68 billion by 2020, clocking an annual growth rate of 15 to 20%, twice as fast as that of the US and European markets. There are no official statistics on the import and sale of animal-tested cosmetics here. Cosmetics testing is carried out from anything between six months to two years to see if there are any health risks involved. Animals are usually killed after the procedure. All 28 countries under EU have banned import and sale of such products.

• Retailers Explore Options in Truncated AP: Several large global and domestic retailers including WalMart Stores, Future Group, Reliance Retail and Aditya Birla Group have begun exploring business opportunities in the cities and towns of the truncated Andhra Pradesh state. According to industry executives and property consultants, global single-brand players like Nike and Adidas were also enquiring availability of commercial real estate, looking at expanding their footprint in AP. The state, which got condensed to 13 districts after the creation of the new state of Telangna with 10 districts including Hyderabad in June, is preparing to build a large new capital city and several smart cities. The big retail players now have most of their outlets in and around Hyderabad, which is part of Telangana though would remain the joint capital of both states for a decade. Walmart India, which operates 20 cash-and-carry stores under the Best Price Modern Wholesale brand, is upbeat on the emerging business opportunities in truncated AP with a new capital and cities, said Rajneesh Kumar, its vice president for corporate affairs. “We plan to open 50 more cash-and-carry stores in India in the next four to five years,“ said Kumar, while refusing to divulge details on the exact number of stories being planned for AP. Walmart currently has one store in Hyderabad, which is part of Telangana, and three in Andhra Pradesh, at Vijayawada, Guntur and Rajahmundry. A senior executive of Kishore Biyani-owned Future Group said notwithstanding business potential, political uncertainty and regional agitations in undivided Andhra Pradesh over the past few years had dissuaded them from expanding its base there. “As against 21 stores in Karnataka and 17 in Tamil Nadu, we have only nine stories in the undivided AP state, of which seven are located in Hyderabad itself. We are now going to cities in AP aggressively and have planned six big-format stores for immediate future,“ said the executive, asking not to be named. “Apart from signing agreement for store at Guntur, we are on the verge of signing agreement for Rajahmundry and are looking for suitable property in Kurnool.“ Each big format store would typically cost Rs 7-10 crore.

• Deloitte to Advise on Barista Business: Carnation Hospitality, which acquired coffee chain Barista last month, has hired consulting firm Deloitte to advise on absorbing the business. “Deloitte will help us in our foods business,“ said Sanjay Chhabra, director of Carnation Hospitality. “We work with many other consulting firms for other projects.“ Carnation Hospitality is a unit of Rollatainers, which has interests in consumer packaging, restaurants and food services. It's planning a joint venture with IMM to set up Jamie's Italian Restaurants in the country. Barista, the second largest coffee chain in the country, was acquired by Carnation Hospitality for Rs 70 crore. Having changed ownership at least four times, Barista has been struggling to keep up with rival chains such as Starbucks, Café Coffee Day and Costa Coffee.

• Sotheby's Eyes £10, 00,000: While giving the finishing touches to one of his paintings in 1982, Indian artist Tyeb Mehta may not have imagined the fate of his creation a few decades hence. The work titled 'Blue Painting' found its way to a museum in Japan through a collector who had an eye for several of Mehta's works. Years later, the painting -a woman's body in overlapping planes of blues -is going to London for an auction shortly after being showcased in India and New York. The work's tour is being managed by auction house Sotheby's. It’s been priced at £600,000 to £800,000 (5.97-7.97 crore) ahead of the auction next month. “We see a lot of business opportunity and it is the right time to market Indian art to buyers worldwide,” said Yamini Mehta, international director for Indian and South Asian Art at Sotheby's. Close to 300 artworks from a wide range of artists from India and the region will go under the hammer for which Sotheby's expects to raise around £10 million in total. The India Week auction, to be held in London, will feature art from India spanning 1500 to the present. The auction comprises paintings by modern masters including Maqbool Fida Husain, Syed Haider Raza, Francis Newton Souza and Akbar Padamsee to name a few. There are also works by contemporary artists from India and Pakistan such as Rashid Rana, Bharti Kher and Subodh Gupta. “Many works will come into the market for the first time,” said Mehta, adding that the works had been sourced from across the world. For example, the works by Rabindra Nath Tagore are from the William and Mildred Archer Collection. One of Husain's works has come from the Czech Republic, while those of Padamsee were from Brazil, she said. The auction house expects a variety of buyers, including non-resident Indians and international collectors, to show interest in the auction for which 3,000 catalogues will be sent out. “Around 1,000 catalogues will be circulated in India,” said Mehta, giving a sense of the number of active buyers the auction house was targeting from the country. Sotheby's has been actively engaging with Indian artists, buyers and sellers and continuously looks at opportunities to conduct auctions in India. “India is an interesting market with a lot of potential and we keep exploring the opportunities to conduct auctions here,” said Edward Gibbs, chairman, Middle East and India.

• India's Domestic Air Traffic Grew 6% in July: IATA Report: India's domestic air passenger traffic grew by a “solid“ six per cent in July, 2014, over the same month last year though the strongest growth in this area was witnessed in Russia and China, IATA said on Wednesday. “This could be an early sign of the success of the new (Indian) government's business-friendly stance. However, the government's July budget announcement showed little spending stimulus, which could keep India's growth trend below the pace of other emerging markets,“ global airlines' body International Air Transport Association (IATA) said while announcing global passenger traffic results for July.

• Birla shortlists PEs for Rs 2.4k cr retail co stake: Aditya Birla Group has short-listed French tycoon Bernard Arnault’s investment company L Capital, General Atlantic Partners, Singapore sovereign fund GIC and Standard Chartered Private Equity to raise $400 million (Rs 2,400 crore) for its consolidated retailing business unit, two people directly familiar with the matter said. Birla will raise $200 million each from two investors in the coming weeks, which values the new retail company at $2.2 billion (Rs 13,000 crore) in enterprise valuation, they added. TOI in July reported that Birla had mandated Standard Chartered Bank to sell stake in the unit that’s being created through a merger of Madura Fashion & Lifestyle, department store chain Pantaloons and More supermarkets. The four investors are completing due diligence process before Birla decides on the eventual picks. The chosen investors and their investment plan will be built into the scheme of merger being prepared for the three group companies. Madura is part of the listed Aditya Birla Nuvo, while Pantaloons is a listed company. More supermarkets are parked under Aditya Birla Retail, which is privately owned by group chairman Kumar Mangalam Birla. As part of the plan, Madura will be subsidiarized with public shareholding. Pantaloons and More will be merged with the demerged Madura subsequently. Birla is expected to infuse another $100 million into the new company, possibly through a rights issue or other instruments, sources said. Several foreign investors had looked at the stake-buy opportunity but the aforesaid four names remain in the process. A source said one more sovereign wealth fund might still be in the fray. This could not be confirmed independently. Some global investors exited the process as the stake-buy did not guarantee them board seats, a second source said. An Aditya Birla spokesperson said the group doesn’t comment on market speculation. L Capital, owned by Louis Vuitton Moet Hennessy chief Bernard Arnault, General Atlantic and GIC (formerly Government of Singapore Investment Corp) have been bullish on the Indian consumer story. The Birla deal is seen an opportunity to buy into an asset of scale with good governance standards, which has been a broad sectoral concern for most foreign investors. General Atlantic and L Capital declined to comment, while GIC couldn’t be reached for comments. The bleeding supermarket operations under More has dragged the overall valuation but sources claimed that there has been significant reduction of losses.

• 60% affluent consumers plan to increase discretionary spending: More than half of the affluent population of the country plans to set aside higher amounts for discretionary spending in 2015, according to a survey report released here today. "As many as 60 per cent of affluent consumers in the country plan to increase their discretionary spending in the coming year, second only to China," a VISA survey conducted from September 2013 to December 2013 said. However, VISA did not disclose how many people were contacted for the survey. The study said that on an average, around nine among 10 affluent Indians set aside Rs 25,000 monthly for discretionary spending on dining, night-outs, holidays and purchasing designer goods. Among them, a whopping 92 per cent spend on fine dining, 80 per cent spend on designer clothes, 79 per cent spent on family holidays and 68 per cent spend on jewellery, it said. Among the 60 per cent who expect discretionary spending to increase, 49 per cent are likely to increase the budget on family holidays while 45 per cent intend to increase spending on fine dining. Commenting on the survey, VISA's Global Head of Emerging Markets Digital and Group Country Manager for India and South Asia Uttam Nayak said, "The survey results show that affluent people continue to be optimistic about plans to spend more on discretionary items in the year ahead". The survey reveals that seven out of ten expect to save more in 2015, which demonstrates a good balance between spending and a commitment to growing and maintaining their wealth. At the same time, they also plan to spend 60 per cent of their household income and save or invest the rest.

• Indian Institute of Management - Calcutta to incubate 40 startups over 5 years: The Indian Institute of Management (IIM) Calcutta has launched a new startup incubator as it looks to tap into India's burgeoning start-up eco-system. The incubator, IIMCalcutta Innovation Park (IIP), which has been registered as a Section 8 company under the new Companies Act, plans to host about 40 startups over five years. It will focus on five key sectors-healthcare, education, clean technology, lifestyle and analytics. "The incubator will focus on entrepreneurial ventures developing product as well as delivery of services," said Ashok Banerjee, dean, new initiatives and external relations, at IIM Calcutta. Energy solutions venture ONergy, Doctors For You and primary education-focused company Edwell will be among the first batch of incubated start-ups, while two more ventures are expected to join over the next two months. IIP, which will provide seed funding of 5- 50 lakh for an undisclosed stake in the ventures, will receive about 7 crore in funding from the Department of Science and Technology, which will be allocated over the same period. It also plans to raise up to 20 crore from its alumni. The management institute counts notable entrepreneurs such as TutorVista founder Krishnan Ganesh, Rediff's Ajit Balakrishnan and Rocket Internet-backed Jabong's Praveen Sinha among its alumni. IIP will also look to develop start-up enterprises from the eastern part of the country, a region not traditionally known for emerging enterprises. "The east is still a virgin territory in terms of entrepreneur development, and where we hope to foster change," said Banerjee. The development comes at a time when private sector incubators and accelerators have taken the lead in building the country's still-nascent startup eco-system.

• Court orders cancellation of land allotted to DLF: In yet another setback to DLF Ltd, the country’s largest property developer by market value, the Punjab and Haryana high court on Wednesday ordered the cancellation of a 350-acre land allotment in Gurgaon authorized by the Bhupender Singh Hooda government in 2009. This follows a Supreme Court order in August asking DLF to pay a Rs630 crore fine imposed on it by the antitrust regulator for unfair business practices. DLF said it would pay the fine, pending a final decision by the apex court on an appeal filed by the realtor against the penalty. In a statement on Wednesday, the developer said, “DLF won this land in an international competitive bid conducted twice by the government of Haryana in 2009-10. As a copy of the order is awaited, we wish to clarify that it will have no bearing on any of our completed or ongoing projects. This land was to be developed in the future. After reading the order and taking legal advice, we will take appropriate steps.” Property analysts said DLF had to make a payment of Rs1,700 crore to the Haryana government, of which the company has paid up around Rs1,100 crore so far. The valuation of the land today would be far higher—as much as Rs4,000-4,500 crore, they said, requesting anonymity.

International:

• Malaysia Airlines tweaks its ‘My Ultimate Bucket List’ sales campaign: Malaysia Airlines has changed the wording of an online contest called “My Ultimate Bucket List” after Internet users derided the campaign as insensitive following two disasters suffered by the airline this year that claimed 537 lives. A bucket list commonly refers to things one wants to do or see before dying. Nearing six months since the unexplained loss of flight MH370, the carrier launched the campaign asking Australian and New Zealand customers to describe in 500 words or less, “What and where would you like to tick off on your bucket list, and explain why?”. The prize for 16 winners was an iPad or return tickets to Malaysia. Hit by plunging ticket sales after the 8 March disaster and the 17 July shooting down of another passenger jet over Ukraine, Malaysia Airlines (MAS) has slapped discounts on some routes and launched special offers to revive its business. It has almost doubled its commission payments to Australia-based travel agents to revive sales there, according to Australian media reports. By Wednesday, the original link to the “Bucket List” contest had been removed from the airline’s website. The contest was still being offered, with less fanfare, asking contestants to describe destinations and activities on their “to-do” list. The carrier confirmed to Reuters that it has “withdrawn the title” of the contest since it was “found to be inappropriate”. “The competition had been earlier approved as it was themed around a common phrase that is used in both countries,” Malaysia Airlines said in a statement. It also added that it did not seek to intentionally offend any parties.

• Ex-New York mayor back at Bloomberg: Former New York Mayor Michael Bloomberg has returned to the helm of Bloomberg, the data and financial news company he founded more than three decades ago. Mr Bloomberg still owns 88% of the company, and is taking up the role less than a year after leaving City Hall. He will be replacing Daniel Doctoroff, who steps aside as president and chief executive at the end of the year. Both men indicated the decision was mutual after realising there was no room at the top for both of them. "I never intended to come back to Bloomberg LP after twelve years as Mayor," Mr. Bloomberg said in a statement. "However, the more time I spent reacquainting myself with the company, the more exciting and interesting I found it - in large part, due to Dan's efforts. "I have gotten very involved in the company again and that led to Dan coming to me recently to say he thought it would be best for him to turn the leadership of the company back to me. "It was a gracious and thoughtful offer and one that I finally accepted after significant pushback and great reluctance." Mr Bloomberg added that Mr Doctoroff "expertly guided Bloomberg LP through the worst financial crisis of our generation." Mr Doctoroff has led Bloomberg for the past seven years, first as president and then as chief executive in 2011. Prior to joining Bloomberg, Mr Doctoroff worked as New York City's Deputy Mayor for Economic Development and Rebuilding for six years. Mr. Doctoroff said "I love the company and have deep respect and affection for Mike, so leaving is not an easy decision, but it is the right one for the company, for Mike and for me at this stage of my life. "It is and has always been Mike's company and given his renewed interest and energy, it only makes sense for him to retake the helm."

• Mayor de Blasio Backs N.Y. Fashion Industry: While Mayor de Blasio's daughter Chiara won over the designer crowd at Gracie Mansion's first fashion week bash Wednesday with her self-made blue lipstick, the city's new leader proved he too is true blue about the fashion industry. After announcing three new initiatives to bolster New York manufacturing, de Blasio fielded a few questions about his commitment to the 900–plus fashion businesses in the city. Emphasizing how the garment center has been and continues to be the lifeblood for generations of Americans, de Blasio spoke earnestly about how his own maternal grandmother made her way in this country with her embroidery skills. Asked what has been most challenging about executing his new initiatives, the mayor said, "I don't find this particularly challenging because there is tremendous enthusiasm in the industry. And we know that it's a growth industry for the city. As I mentioned in there, I'm looking very carefully at the future of the city. I think it's fashion. I think it's film and TV, it's tech — it's areas where we are really stronger than ever. It's our interest to invest in them and support them. I think the industry's response is enthusiastic so I think it's a pretty straightforward equation." As for whether the ongoing issue of diversity on the runways is something that needs to be improved upon, de Blasio said, "Yup. Sure. Look, I think in all sectors of what we do [it needs to be.] This is something that is very, very important to this administration and we're going to work with everyone productively but I will certainly bring my values to the process. And it's very important that Diane [von Furstenberg] mentioned tonight what a mandate this has to be for the industry," referring to how she reminded guests about the importance of using runway models of all different types of ethnicities.

• Costco to Pay $335k Penalty for Clean Air Act Violations: Costco Wholesale Corp. has agreed to cut emissions of ozone-depleting and greenhouse gases from leaking refrigeration equipment at more than half of its stores nationwide. In the settlement announced Wednesday by the U.S. Environmental Protection Agency and U.S. Department of Justice, Costco will pay $335,000 in penalties for violations of the federal Clean Air Act and will fix refrigerant leaks and make other improvements at 274 of its stores, which EPA estimates will cost about $2 million over the next three years. The agencies said Costco violated the Clean Air Act by failing to promptly repair refrigeration equipment leaks of the refrigerant R-22, a powerful ozone-depleting hydrochlorofluorocarbon, between 2004 and 2007. Costco also failed to keep adequate records of the servicing of its refrigeration equipment to prevent harmful leaks. EPA said destroying the ozone layer results in dangerous amounts of cancer-causing ultraviolet solar radiation striking the earth, increasing skin cancers and cataracts. R-22 is also a potent greenhouse gas, with 1,800 times more global warming potential than carbon dioxide, or CO2. Sam Hirsch, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, said, “Industry needs to lead the way in abandoning harmful chemicals in favor of using and developing greener, environmentally friendly alternatives to protect our health and our climate.” The settlement requires Costco to retrofit or replace commercial refrigeration equipment at 30 of its stores to reduce ozone-depleting and greenhouse gas emissions. Costco must also implement a refrigerant management system to prevent and repair coolant leaks and reduce its corporate-wide average leak rate at least 20 percent by 2017. In addition, Costco will install and operate environmentally friendly glycol refrigeration systems and centrally monitored refrigerant leak detection systems at all new stores.

• VF Backs $10M in Loans for Bangladesh Plants: VF Corp. is collaborating with the International Finance Corp. unit of the World Bank Group to provide up to $10 million in financing for building upgrades in its vendors’ factories in Bangladesh. The program is the final and largest piece of a $17 million funding commitment, made last month by the Greensboro, N.C.-based apparel giant, to assist Bangladesh plants and workers. This commitment is in addition to the company’s activities as a founding member of the Alliance for Bangladesh Worker Safety, in which its fellow members include Wal-Mart Stores Inc., Target Corp. and Gap Inc. VF will provide a corporate guarantee for IFC remediation loans made to companies already providing production for VF’s various brands. Qualifying suppliers will have undergone structural, electrical and fire-safety assessments under the framework established by the alliance, as well as access to loans, expected to range from $100,000 to $1 million, to take any actions necessary to bring the production facilities into compliance with the alliance’s standards. “The safety of the people making our products around the world is an imperative,” said Eric Wiseman, chairman, president and chief executive officer of VF. “Our program with IFC helps to ensure that our suppliers have access to the necessary capital to complete safety-improvement plans.” Loans must be directed toward the improvement of at least one of three applicable performance criteria: assessment and management of environmental and social risks and impacts, labor and working conditions, and resource efficiency and pollution prevention. “This financing model, which we think could work well for other buyers and suppliers, will help Bangladesh’s suppliers improve work conditions and strengthen the country’s ability to attract garment manufacturers,” said Serge Devieux, IFC director for South Asia.

• LVMH and Hermès Declare a Truce: The acrimonious, four-year standoff between LVMH Moët Hennessy Louis Vuitton and Hermès International has ended in a surprise entente cordiale. The French luxury rivals, which traded barbs and lawsuits over LVMH’s creeping 23.2 percent stake in Hermès, said Wednesday they agreed to a conciliation brokered by Franck Gentin, president of the Commercial Court of Paris. According to sources, Gentin designed the scheme and, last week, organized a joint meeting between the warring companies following weeks of under-the-radar negotiations. The two parties signed an agreement that will see LVMH distribute its Hermès stake to shareholders, passing through Groupe Arnault, which controls about 70 percent of Christian Dior SA, which in turn holds a 45 percent stake in LVMH. The stake in question is worth an estimated 6.5 billion euros, or $8.53 billion at current exchange rates, and reflects a total capital gain realized by LVMH of 3.8 billion, or $4.98 billion, according to sources and analysts’ tallies. LVMH, Dior and Groupe Arnault — companies controlled by Bernard Arnault — also agreed not to acquire any shares in Hermès for the next five years, leaving the door open to potential synergies between the two companies in the future. According to a joint statement, the distribution of shares, subject to board approval at LVMH and Dior, is to be completed no later than Dec. 20, with one Hermès share offered for each 21 LVMH shares. At that time, Groupe Arnault will hold around 8.5 percent of the capital of Hermès International.

• Burberry Links With Printemps for the Holidays: Burberry is set to be the first British luxury label to partner with French department store group Printemps on its festive celebrations, when their holiday collaboration, called “The Magical Christmas Journey by Burberry,” is unveiled in Nov. 6. Burberry’s creative concept for Printemps’ holiday period will “bring together the Christmas spirit and traditions of London and Paris in a playful celebration of the season,” Burberry and Printemps said. The concept’s narrative will follow a child who travels with his teddy bear from Burberry’s London flagship at 121 Regent Street to Printemps, with the theme to showcase Burberry’s heritage, innovation — and its affinity for music and the British weather — along with Parisian elegance and creativity. The collaboration will be showcased in Printemps’ flagship Boulevard Haussmann store in Paris, along with its Printemps Louvre store, which will house a Burberry pop-up store. And in a first for Printemps’ holiday partnerships with a design house, the Burberry concept will appear across its regional stores in France, with the collaboration to be present in all Printemps’ 18 stores. In the Boulevard Haussmann store, the Burberry concept will take over the store’s atrium, its windows and the store’s facade. The windows are expected to showcase Burberry’s take on the animated puppets that are traditionally a part of Printemps’ holiday creations. And the windows will also spotlight an interactive digital experience, which will allow visitors to control elements of the windows using their smart phone. Another element of the partnership will be a limited edition Burberry collection, which will include ready-to-wear, accessories, special gifts and collectors’ items, designed around themes such as ‘The English Rose’; ‘The Punk’ and ‘The Pillar Box.’ In addition, Printemps will carry exclusive Burberry Beauty gifts, such as the new My Burberry fragrance with a red gabardine knot around its box and a “Colors of London” make-up box set. Burberry had previously partnered with Printemps in summer 2013, when the store held its “London Mania” event. At the time, Burberry opened a pop-up store dubbed “Burberry Loves Printemps,” which carried exclusive men’s and women’s products.

• Neiman Marcus Headed to New York City: Neiman Marcus is opening its first store in New York City, in Hudson Yards being developed on the west side of Manhattan. “The store is not slated to open before 2018,” Karen Katz, the president and chief executive officer of the Neiman Marcus Group, told WWD. “Demographics show that the growth and population on the west side and south west side of the city is growing much faster than other parts of the city. Our expectation is that it becomes a tourist destination. With a good mix of  West Siders, people who also live downtown and international tourists.” NMG also operates Bergdorf Goodman, but Katz said she believes the company is underserving New York City.

Tech:

• Apple Upsets Cart with Cut in Online iPhone 5S Price: Just ahead of the launch of the next iPhone, Apple is offering a price cut on its outgoing flagship device. It has tied up with online retailers Amazon, Flipkart and Snapdeal to offer discounts on the iPhone 5S in a move that's sharply contrarian to the strategy of brands such as Samsung launch. This, combined with the usual discounting by e-commerce sites, has made the 5S about 8,000 cheaper online than in brick-and-mortar stores .That's probably the widest price gap currently for any smartphone or electronic gadget, according to three of Apple's top trade partners. The 16GB iPhone 5S is available online at Rs 38,000-39,000 while it costs Rs 46,000-47,000 in stores. The idea is to clear out stocks of the 5S, which will get a substantial downward price revision when the new flagship iPhone model is launched, trade sources said. It's a strategy Apple routinely adopts in the US and Europe. Apple has scheduled a global event on September 9 in Silicon Valley that's widely expected to be the unveiling of a new largescreen iPhone and smart watch concept. Emails sent to Apple, Amazon, Flipkart and Snapdeal did not elicit any response as of press time. “Apple's sudden focus on e-commerce sites has become a nightmare for us,“ said the chief executive officer of a leading cellphone retail chain, requesting anonymity. “We have even told them that if the situation continues, we may stop picking up stocks of iPhones since our sales have suddenly taken a hit.“ While big retail chains have taken up the issue with Apple and have threatened to stop stocking its products, some have negotiated special consumer offers on the 5S, such as a free case with each purchase. Apple follows a uniform pricing strategy around the world, hence it cannot reduce prices across all sales channels in the market. A top trade executive said Apple's strategy was in stark contrast with what other consumer electronics and smartphone makers are currently trying to achieve ¬ a level-playing field between offline and online trade. “We have to see whether Apple is doing this discounting as a regular phenomenon before taking a decision on the way ahead,“ the person said. Explaining the large online-offline gap, another of the company's trade partners said, “Apple is offering 3-4% extra margin to ecommerce to be passed on to consumers as discount, apart from usual schemes such as 1-2% more margin if sales target is reached. The e-commerce firms are further doing their own discounting which has made the price difference this wide.“ Apple offers an 812% retail margin on iPhones, according to those in the trade. As per estimates, modern retail and the exclusive Apple stores contribute around 20% each to iPhone sales in India, while ecommerce and general trade accounts for the remaining 60%.

• E-Discounts Line up Wholesaler Pockets: India’s ecommerce is seeing a new group of customers who are not exactly welcome — they scour the Net for the best deals and then resell the goods either offline or on other online platforms at a higher price. The deep discounts on offer at ecommerce portals such as Amazon India and Flipkart are creating an arbitrage opportunity for such players, especially wholesalers. A recent study for an unnamed ecommerce client by consulting firm EY showed that 10% of the total client base was undetectable and is considered to comprise wholesalers. “EY did customer segmentation for a player in the market and discovered that part of customer segment consisted of wholesalers and traders,” said Milan Sheth, a partner at EY. Sheth declined to disclose the name of the client. “The study also revealed the practice of buying from one ecommerce player and acting as a stockist for another,“ said Sheth of EY. The trend is primarily prevalent in the electronics category, the biggest money-spinner for ecommerce firms. For instance, a Canon IXUS 155 camera is available on Snapdeal for Rs 6,486, Amazon India for Rs 6,699 and on Flipkart for Rs 7,996. Similarly HP 15-r007TX Notebook sells for Rs 35,374 on Amazon with a laptop bag, but is listed on Snapdeal for Rs 36,889 and on Flipkart for Rs 39,860 without the bag. E-tailers are aware of these issues. “There will always be abuses when you operate a marketplace. When we see that, we let those customers know that this is not acceptable,“ said Samir Kumar, director of category management at Amazon India. India's ecommerce market is seeing intense competition among players such as Flipkart, Snapdeal and Amazon, given the fast growth.

• Low-cost Smartphones Fuelling Staggering M-commerce Growth: The nearly-ubiquitous smartphone is emerging as an important driver of growth for India's $4-billion e-commerce sector, with proliferation of cheap handsets making it easy for people to hunt for products in online stores. Sachin Bansal-founded online retailer Flipkart said mobile phone visits jumped 200% in one year while its competitor eBay India said it receives close to 35% traffic through mobile phones. Delhi-based Snapdeal said its revenue from mobile phone users has grown to 60% from 5% in early 2013. India's e-commerce market is expected to touch $20 billion by 2020, according to a PwC-Assocham study.“With the availability of low-cost smartphones, the e-commerce opportunity will increase manifold,“ said Bikky Khosla, chairman of the Assocham National Council on e-Commerce and chief executive of B2B marketplace TradeIndia. According to a recent Accel Partners study, shopping through mobile phones, which grew 800% in 2013, is expected to clock a CAGR of 150% till 2016. Bolstering this is a recent AT Kearney and Google study which says mobile phones are the “preferred device“ of access. Khosla said the Indian Internet landscape is different from the rest of world as first-time Internet users access it mostly on smartphones. More than 30% of TradeIndia's traffic comes from mobility devices, he added. eBay India managing director Latif Nathani said mobile commerce is gaining traction in non-metros and rural areas too owning to increasing adoption of mobile devices. “Affordable device cost and data connections (such as 3G and 4G services) coupled with high-speed Internet packs and popularity of Wi-Fi are fuelling m-commerce growth,“ Nathani said. Apart from apps, eBay India has created mobile web (m.ebay.in), which is designed for any GPRS, EDGE and 3Genabled feature phones and provides an end-to-end transaction platform for consumers to shop online. The company said that on an average day, mobile phone users buy a product every 27 seconds. “Over the last six to eight months, we have seen huge growth. Customers are actually shopping on mobile. They do comparisons and transact on mobile devices,“ said Michael Adnani, vice-president for retail and head of Brand Alliances at Flipkart. “People are now moving from feature-rich phones to smartphones that actually gives them ability to transact. The m-commerce market is set to grow in tandem with rising mobile penetration in India,“ said the Flipkart executive.

• Flipkart, NIFT Sign MoU to Help Student Entrepreneurs: The National Institute of Fashion Technology (NIFT) has partnered with online marketplace Flipkart to give training to its students in areas like creating private lables and marketing of products. NIFT on Wednesday signed a memorandum of understanding (MoU) with the e-commerce giant to work together on enhancing the market-oriented learning of the students and expose them to trends from across the globe. The MoU with Flipkart will give the students access to other handloom, apparels, leather and accessory clusters. Besides, Flipkart's business model will give them access to a lot of analytical data that will bring alive consumer and business trends, he added.

• Online Ad Mkt in India to Cross Over Rs 3,500 cr by March '15: Rising marketing spend in sectors like e-commerce, telecom, FMCG and consumer durables will help the online advertising market in India, which is projected to grow at 30% to touch Rs 3,575 crore by March 2015, a IAMAI-IMRB study on Wednesday said. According to the study, the online advertising market has grown from Rs 1,140 crore in FY11 to Rs 2,260 crore in FY13 and was estimated to be worth Rs 2,750 crore in FY14. The online ad segment is expected to grow at a compounded annual growth rate of 25% between FY11 to FY13.

• Future Group's Customers to Get Better Access to Products: Future Group, one of India's largest retailers, is implementing a strategy that will allow customers to access a wider range of products both online and through stores. The company aims to boost same-store sales by close to a tenth through it. Through the omni-channel, as the strategy is known, the company will endeavor to make shopping online and from brick-and-mortar stores a seamless experience. A growing number of traditional retailers are using this strategy to compete better with online rivals. As part of the plan, Future Group will introduce `endless aisles', which will allow customers to pick from over 250,000 items available across its stores or website and have them home delivered or kept for pick up. A normal Big Bazaar outlet would have about 40,000-60,000 stock keeping units, the company said. “This will be a 100-crore investment over the next 18 months. We can use our stores to hold the goods, and as starting points for deliveries. This will help us use our existing stores more efficiently,“ Kishore Biyani, CEO, Future Group, told reporters. All the company's stores will have online presence by March, he said, adding that Future Group has tied up with Hybris, an omnichannel software specialist owned by SAP, to implement the strategy. Future Group's online offerings will not involve deep discounts, Biyani said. “The same discounts we have in our stores will be used online. We cannot compete with the purely online players on price. We cannot afford to have negative gross margins,“ he added. Future Group also plans to mine customer data to provide better shopping experience and retain customers even without deep discounts. The company said it has 30 million customers on its loyalty program and has two years' worth of purchase data, which will help it create better offerings for customers.

• Amazon says CFO Szkutak to retire next June: Amazon Inc said on Wednesday its chief financial officer, Thomas Szkutak, will retire in June 2015. Brian Olsavsky, vice president of finance for the company's global consumer business, will succeed Szkutak and report to founder and Chief Executive Jeffrey Bezos, the online retailer said. Szkutak, 53, joined the company as CFO in October 2002.

• Flipkart, Snapdeal look to beef up boards with high-profile members: India’s top e-commerce firms Flipkart and Snapdeal are looking to strengthen their boards of director with corporate executives who can help steer the fast-growing companies as the stakes get higher in the scramble for market dominance. Jasper Infotech Pvt. Ltd, which runs Snapdeal.com, has hired Bharti Enterprises Pvt. Ltd vice-chairman Akhil Gupta as an independent director, documents filed with the ministry of corporate affairs show. Gupta, a two-decade veteran at Bharti Airtel, is one of the executives who helped build the company from scratch, and is a confidant of Bharti Enterprises chairman Sunil Mittal. Gupta is also known to be a savvy deal-maker—he helped Bharti raise hundreds of millions of dollars in capital when it was a private company, and then played a key role in taking the company public. Snapdeal and Gupta confirmed he had joined Snapdeal’s board. Snapdeal’s bigger rival Flipkart is also looking to hire independent board members, a person with direct knowledge of the matter said. Gupta’s appointment as Snapdeal director is the highest-profile board hire by an e-commerce company. Until now, the boards of e-commerce firms including Flipkart and Snapdeal have been filled with their founders and private equity backers, partly because these companies were too small to be attractive to, or even need top corporate executives. In addition, corporate professionals looked at the young e-commerce business with scepticism for several years. Now, however, it’s become clear that e-commerce is here to stay. And India’s largest e-commerce firm Flipkart, which raised $1 billion (around Rs.6,000 crore) about a month ago in one of the highest-ever financing rounds globally by a start-up, and Snapdeal are attracting huge amounts of capital. They are also involved in a bruising battle with the Indian unit of the world’s largest online retailer Amazon.com Inc., which launched here in June 2013.

• Asus enters wearables market with ZenWatch: Taiwanese tech giant Asus has entered the wearables category with the launch of its smartwatch—ZenWatch. Powered by Android Wear and produced in partnership with Google, ZenWatch seamlessly pairs with Android smartphones to provide relevant and useful information, Asus said in a statement. Though the price of the device was not disclosed, reports said it would be below $199 (about Rs12,000). Powered by Qualcomm Snapdragon 400 processor with 1.2GHz CPU, the smartwatch has 512MB RAM and 4GB memory. It has a 1.63-inch AMOLED touch display and 2.5D curved Corning Gorilla Glass 3. It will also have a built-in microphone. “Asus ZenWatch is compatible with all smartphones running Android 4.3 or higher, providing users with a convenient window to view incoming calls, messages, notifications, and other important information, without having to remove their phone from their pocket or bag,” Asus Design Centre vice-president Mitch Yang said. Two additional features, Remote Camera and Presentation Control are also available by using ZenWatch with the Asus remote camera and Asus remote link smartphone apps, it added. The smartwatch comes with a ‘cover to mute’ feature, which lets users mute an incoming call and silence alarms by placing their hand over the face of the ZenWatch.

• Facebook Goes Down for Some US Users: Facebook Inc went down for an unknown number of US users on Wednesday afternoon, in what appeared to be the latest outage to affect the world's largest social network. Several users reported getting an error message, "unable to connect to the Internet" when attempting to sign in.

• Philips, Samsung and Infineon in 138m-euro cartel fine: Philips, Samsung and Infineon have been fined 138m euros (£110m; $182m) by the European Commission (EC) for fixing prices of chips in used in smartphones. The electronics giants "colluded" on pricing, contracts and capacity between 2003 and 2005, the EC said. Infineon was fined 82.8m euros, Samsung 35.1m euros, and Philips 20.2m euros. Germany's Infineon and Dutch firm Philips rejected the charge and said they would appeal. South Korea's Samsung had yet to comment. Renesas, a joint venture between Hitachi and Mitsubishi, avoided a fine for revealing the existence of the cartel, the EC said. The three fined companies "discussed and exchanged sensitive commercial information on pricing, customers, contract negotiations, production capacity and their future market conduct," said Joaquin Almunia, the EC's vice president in charge of competition pricing. Companies that "choose to collude, at the expense of both customers and end consumers, should expect sanctions", he added.

• eBay glitch blocks access for users on auction site: E-retailing giant eBay's users are reporting difficulty signing in to the site from locations in India, the US, the UK and other parts of Europe. Users say that they cannot sign into their accounts and are receiving incorrect password alerts. An eBay spokesperson, Ryan Moore, told the BBC that the technical glitch was the result of scheduled server maintenance. This is the 11th such problem that eBay has suffered this year. Mr Moore said that the sign-in issue was affecting only a small portion of users, with most remaining unaffected. "We're working to resolve this issue quickly and will continue to keep our customers updated. We apologise for any inconvenience to our users," he added. Earlier, eBay administrators had posted that the site was to undergo planned maintenance on 4 September.