Online in France

According to recent article from Reuters, France still lags behind Germany and the UK when it comes to online consumer sales. Reuters quotes research from Forrester which estimates online sales in France at €25bn, in Germany at €31bn, and in the UK at €41bn. France is seen as a less mature online market than Germany or the UK partly because of its relatively slow transition over the past decade from its homegrown Minitel service to the World Wide Web. This is compounded by the fact that there are almost no online food sales in France - principally because home delivery is comparatively expensive in the more dispersed geography of France. One exception is Casino Guichard and its cdsicount site, although it mostly sells consumer electronics and entertainment products.

Kesa Down

Kesa Electricals - home to Darty, Comet and Menaje del Hogar - have published their interim statement for the six months ending 31st October 2009. Group revenues increased by 7.6% to £2.35bn. In constant currency, that equals an increase of just 0.1%. But on a like-for-like basis it equals a decrease of 2.5%. The real success story continues to be Darty where revenues increased by 12.2% and retail profit increased by 12.7%. At Comet, sales increased, but by just 3.6%, while retail losses improved from a loss of £8.1mn to a loss of £1.2mn. Nevertheless, overall group retail profits came in at £24.3, which means that Darty's profits represent over 180% of group profits.

Best Buy Europe

Carphone Warehouse has just issued its Q2 trading update. It explained that the demerger of Talk Talk and Best Buy Europe is still expected to happen by the end of March 2010. It also confirmed that Best Buy Europe remains on track to open its first Big Box stores in the Uk in Spring 2010.

Vertical Integration

Best Buy Store 291: Houston, Texas

The retail channel is usually considered to be the dominant route to market for the consumer electronics manufacturers. It's understood that they may add other products and services at the point of sale - cross-selling accessories, adding delivery and installation options, vying for post-sales warranty and service revenues. Building out the basket. Increasing their 'average transaction value'. But backward integration - competing with their suppliers - that's not generally the role of a 'channel partner'.

Best Buy is the giant of US electronics retailing. With the death of Circuit City earlier in the year, Best Buy is now far and away the largest specialist retailer in the US, with annual revenues expected to be not far short of some $50bn in its current fiscal year. But a story in the latest edition of [Bloomberg] Business Week says that:

Rather than waiting for electronics makers to ship Best Buy the same products its rivals get, [Best Buy's staff] are walking factory floors with executives from companies such as Hewlett Packard and Toshiba, influencing product development and design. [For example], the retailer is pushing suppliers to use standardised software and digital services so consumers can listen to music or watch movies on any device. And Best Buy set up its own venture fund to pour millions of dollars into start-ups from Silicon Valley to Asia. The goal is to shape development of new technologies in promising fields such as green vehicles, digital health, and home monitoring.

Needless to say, while it remains largely unspoken, the threat of significant 'channel conflict' is a serious possibility if Best Buy goes beyond the acknowledged [and generally accepted] route of supplying private label equivalents. By trying to find products which no one else stocks - either by doing deals with a few 'A Brand' manufacturers, or building its own products in untapped niches, or demanding product homogeneity to suit its own ends - Best Buy could be on a collision course with many of its key suppliers. And while Best Buy dominates the specialist retail sector for electronics, it has to be looking over its shoulder at the advances made by Wal-Mart and Amazon, both of which are making great inroads in the US consumer electronics business.

Nokia's Flagship Stores

Nokia Flagship Store: Moscow

The Nokia Flagship Store concept was launched in December 2005 with its first store in Moscow. The original plan was to create some 18 stores around the world. Yesterday there were twelve. Very soon there will be just eight. As Reuters reported earlier today, Nokia will be closing its Flagship Stores in Central London, New York, Chicago and Sao Paulo. Like several other publications, Reuters made parallels between Nokia's retail strategy and Apple's store concept. In Central London, the contrast is all too visible as an Apple Store and Nokia's store stare at each other across Regent Street. But while Apple's store in mostly full to bursting, Nokia's store is usually close to empty.

Dell's Twitter Revenues

Back in June, we reported on Dell's experiments with Twitter. Now, a new article in Fast Company says that Dell has generated $6.5mn in Twitter-driven sales. And as Dell's Twitter Follower list has grown by some 23% in the last three months alone, it's quite likely that their revenues from Twitter will increase considerably in 2010. Here's a case study on Dell Outlet written up by Twitter, and see Dell Outlet on Twitter here.

Amazon Fulfilment Centre

If you've never seen the madness that is an Amazon fulfilment centre, have a look at this two minute video from The Guardian showing the Milton Keynes centre in the UK.

Valuing El Corte Inglés

El Corte Inglés: Plaça de Catalunya, Barcelona

A report in today's Financial Times [subscription required] says that a long-running family feud at El Corte Inglés will be back in court this week, with a panel of three judges meeting to establish a method for valuing the closely-held company. Their decision is expected over the coming month or so.

The feud goes back to 2005 when one family member wanted to sell off his stake in the company. Initially, the valuation was set at the department store group's book value. Needless to say, this inadequate valuation method was challenged, with the result that two business school professors came up with a valuation of 2.3 times book value, or between €14.7bn and €16.6bn. [For more details, see this earlier article in the FT.] But their work was also challenged, and to date, there has been no agreed valuation method which has been acceptable to all parties.

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DSGi Interim Statement

Back in November, DSGi published its Interim Statement for the 24 weeks to 17th October. Group sales were down by 1% [4% on a like-for-like basis]. But sales in the Nordics were up by a remarkable 22% [although just 11% on a like-for-like basis], while everywhere else, apart from the e-commerce business, DSGi's sales were down. As the Interim Statement explains:

The Nordic business is the preferred operating model for the Group. Management continues to simplify the business, taking out costs and reducing complexity. The efficient central operating structure and strong market shares have enabled Elkjop to leverage margin and exploit its strong market positions and gain market share from distressed competitors.

In other words, DSGi's business in the Nordics has been aggressive with its discounting policy, to the detriment of some of its weaker competitors.

Non-core at PPR

It's been an open secret that PPR would dispose of its Fnac subsidiary some day. Well, last week, in an interview with the Wall Street Journal [subscription required],

Cyber Monday in the UK

A few years ago, the first Monday after Thanksgiving was called Cyber Monday because an analyst found that online orders seemed to jump on that Monday, presumably following a pattern of window shopping over the weekend. And since then, the Cyber Monday sales lift has been quite noticeable in the US. Now it's making its way over to Europe.

The UK broadsheet, The Guardian, has published an interesting article on the preparations being undertaken by Amazon in anticipation of this sales peak. It says that last year [on 8th December], Amazon sold 1.4mn items from its UK web site, over 16 items a second and the most orders it had ever received in a single 24-hour period. This year, Amazon is forecasting that sales will be between 21 - 36 per cent higher.

To demonstrate the scale of Amazon's operations in its UK Distribution Centre in Milton Keynes, The Guardian produced a short video.

RIP JSP

Jessops, the troubled UK-based photography retailer, will be de-listed from the London Stock Exchange early next year according to an interview with Chairman David Adams in Amateur Photographer magazine.

Just six weeks ago, Jessops announced that its main operating company was being sold to a newly formed company called Snap Equity Limited, of which 47% is owned by HSBC, 33% is owned by the company's pension fund, and 20% is owned by an Employee Benefit Trust. As part of the deal, HSBC withdrew its claim on a £34mn debt owed to the bank by Jessops plc.

The private equity arm of ABN Amro floated Jessops in November 2004 at £1.55 a share. Today's share price is £0.01 and the company is capitalised at just £1.14mn.

Cross Channel Nudge

Shoppers who cross channels as they work their way towards making a buying decision have been nudged by DSGi's Dixon's to visit their upscale competitors first, and then buy online at Dixons website. The campaign does not name these competitors overtly, but it is clear from the typography and the colour schemes of the posters displayed on London's Underground that they are referencing Harrods, Selfridges and John Lewis.

While this may be an unpopular approach for Dixon's targets, it's acknowledging what's really happening in the marketplace. Competition across channels is clearly part of today's competitive dynamic, and Dixon's should be applauded for tapping into this growing trend.

Microsoft Stores

Last week, Microsoft opened its first-ever retail store in Scottsdale, Arizona. This week they opened their second store in Mission Viejo, California. It is not known where and when the next stores will open.

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Amazon Q3/09

Last week, Amazon announced its results for Q3 2009. Amazon's worldwide sales increased by 28% from $4.26bn in Q3 08 to $5.45bn in Q3 09. Amazon's international sales - that's revenues from its British, French, German, Chinese and Japanese sites - increased by 33% [although with an adjustment for adverse currency movements, that would be a 35% increase] to £2.61bn. And worldwide sales of electronics [and other general merchandise - Amazon's product segmentation means that it does not report publicly on technology sales on their own] increased by 44% to $2.93bn.

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The Most Important Retail Head in Europe

Earlier this week, Best Buy announced that Scott Wheway has been named CEO of Best Buy Europe - the new company created by the JV between Best Buy and The Carphone Warehouse. Wheway will take on responsibility for all of Best Buy Europe's operations, including The Carphone Warehouse's 2,450 stores across nine European countries, plus the 'big box' stores which are scheduled to be launched in the UK next year. Mr Wheway spent some 20 years in Tesco [and not just in the UK - his last posting for Tesco was in Japan], and was most recently the Managing Director of Boots the Chemist.

Microsoft Stores

Back in February, we posted a note on the appointment of David Porter as Microsoft's Corporate VP of Retail Sales. Well, now it looks as if we're moving ever closer to the opening of Microsoft's first stores in the US.

Earlier this week, Gizmodo revealed a leaked slide deck from Lippincott - a design and brand strategy consultancy. Within the body of the deck, Lippincott explained that it has been asked to assist Microsoft and its 'approved partners' with the development of a new company owned retail store that "provides a transformative customer experience, shifts current perceptions of the brand, and supports the functional operating requirements of the business groups".

As Gizmodo explains: "Essentially, Microsoft is taking the best elements from the Apple Store, Sony Style and other 'flagship' stores." There will be a Digital Media Wall which wraps around the entire store. There will be 'stage areas' for Windows 7, Windows Media Centre, and Windows Mobile. And there will be an Answers Bar or Guru Bar or Windows Bar - well, something very similar to Apple's Genius Bar.

We now learn from CNET that two stores have already been identified - one in Scottsdale, Arizona, and the other in Mission Viejo, California. It is understood that the store in Mission Viejo will be in the same mall as the local Apple Store.

Best Buy Europe

Earlier this week, The Carphone Warehouse published its Q1 2010 trading update. The division between The Carphone Warehouse's Talk Talk business and its 50% stake in Best Buy Europe is now clearer than ever. And with the launch of Best Buy Europe's 'Big Box' strategy in 2010, the disconnect between these two businesses will become even more overt. Meanwhile, total revenues for Best Buy Europe increased 6% year-on-year to £773mn, although on a constant currency basis, this increase was just 0.7%. On a like-for-like basis, revenues grew 5.4%, or just 0.2% on a constant currency basis.

Amazon Q2/09

Amazon has just published its results for Q2 2009. Overall, revenues increased by 14% year-on-year, while operating income decreased by 27%, and net income decreased by 10%. Excluding adverse exchange rates, Amazon's international segment - that's operating companies in China, France, Germany, Japan and the UK - grew revenues by 28%. At constant currency, this growth was just 16% year-on-year.

For worldwide electronics [which includes other 'general merchandise' not included elsewhere], revenues grew by 35% to $2.07bn at constant currency. Without the adverse impact of unfavourable exchange rates, this would have represented growth of 41%. This result compares very favourably with Amazon's 'traditional' media segment [books, DVDs and such like] which grew by a mere 1% year-on-year.

Logitech Q1/10

Logitech has announced its results for Q1 FY2010, and revenues are down once again, this time by 36% year-on-year [although when adjusted for constant currency, by 33%]. Logitech has continued to say that revenues have been adversely affected by de-stocking in the channel. Gerald Quindlen, CEO, said: "During Q1 we made substantial progress in helping our channel partners reset their new, lower levels of weeks of supply. While there is more progress to be made, we continue to expect this reset to be completed by the end of Q2".

Apple Brighton

This Saturday, Apple opens its 21st Apple Store in the UK. It's located in Churchill Square, Brighton on England's south coast. The store opens at 10.00, and as usual, the first 1,000 visitors will receive a free Apple T-shirt.

Elsewhere in Europe there are just 6 Apple Stores - that's 1 in Italy [Rome], 3 in Switzerland [2 in Zurich, and 1 in Geneva], and 1 in Germany [Munich]. There are rumours of further openings in Europe later this year.

Apple Q3/09

Earlier this week, Apple posted its Q3 09 results. Sales at Apple Stores increased by some 4% year-on-year, mostly due to increased iPhone revenues, and partially offset by a decrease in revenues from iPods and Macs. Apple ended the quarter with 258 stores compared with 216 stores at the end of Q3 08. Average Q3 revenues per store declined from $6.8mn in 2008 to $5.9mn in 2009. And Apple ended the current quarter with approximately 15,600 full-time equivalent employees working in their retail segment.

Multichannel Staples

Just a little over one year ago, Staples acquired Corporate Express, creating a global office products giant. Now, we learn that Staples in the UK has kicked-off a pan-European re-branding exercise, relabelling the Corporate Express business 'Staples Advantage'. So, the 'Delivery' part of Staples now has Staples Advantage for contract sales, principally to large and mid-sized corporates, and Staples Catalogue for SME/SMB customers. Then there is Staples Retail for SME/SMB customers, plus consumers.

Within Europe, Staples has a retail business in Belgium, Germany, the Netherlands, Portugal and the UK. There are two distinct retail concepts in Europe - the Staples format in the UK, Germany and Portugal; and Office Centre, a cash-and-carry membership warehouse format, in Belgium, Germany [just 2 outlets] and the Netherlands.

DSGi Verdict

Verdict Research is probably the leading firm of retail analysts in the UK, publishing numerous studies throughout the year. Verdict also produces a weekly synopsis of retail news and opinion called Retail FreeView. This week's edition includes a story centred on DSG's results which were published last week.

Verdict says that DSGi's response to continuing declines in revenues is to: "Focus on its longer-term viability by offering better service, overhauling its store portfolio, growing online sales and reducing costs". But, Verdict says that in spite of these actions, it believes that: "The Group's future looks bleak".

For PC World, Verdict explains that the company is placing more emphasis on: "Service, connectivity, delivery, installation and repair, as well as on educating its customers about converging technology". In addition, Verdict says that the Group is offering: "More technical and after sales services, such as its TechGuys proposition, and placing more emphasis on sales of subscription products, warranties and guarantees which accompany the product".

None of this is really new. For some years now, DSGi has been trying to position itself as a specialist provider, but the world has moved on. In so many ways, DSGi's competitors - be they the major grocers, other players with simpler propositions [especially John Lewis in the UK], and the pure play online retailers - offer what the consumer wants, in a format they understand, and at a price point [and margin] which is does not need to be propped up with accessories and service add-ons.

Verdict concludes its analysis by saying that: "If the retailer does not not take more decisive, aggressive and appropriate action now, it risks slipping into terminal decline, with a confused, irrelevant offer, a forever shrinking store portfolio, and customers flocking to its rivals". Ouch!

DSGi Q4/09

After yesterday's results from Kesa, today it's the turn of DSGi.

DSGi's sales for the year ending 2nd May 2009 were down 1% to £8.2bn, although like-for-like sales were down 9%. In the UK and Ireland, where DSGi makes over half of its annual turnover, sales were down by 11%. But, the eCommerce division - that's dixons.co.uk and PIXmania - increased sales from £652.3mn to £807.4mn [dixons.co.uk will transition onto the PIXmania e-merchant platform in the current fiscal year, and this is expected to help grow the business further].

Private Equity Stakes

Yesterday, Office Depot announced that BC Partners, a leading private equity firm, has invested $350mn in the business. Over time, this could give the private equity firm a stake of roughly 20% in Office Depot.

In a similar deal earlier in the week, Bain Capital agreed to take a stake of up to 23% in China's GOME Electrical Appliance Holdings.

Reuters explained that private equity firms typically seek to take majority control of the firms they invest in, but as leverage has been scarce, minority stake deals have become increasingly common.

Kesa Slumps

Two of the top three electricals retailers in Europe deliver their results this week. Today it was the turn of Kesa Electricals. Tomorrow it will be DSGi.

At the top line, Kesa's revenues increased by 9.8% to £4.95bn, but in constant currency revenues declined by 1.2%, while on a like-for-like basis, revenues declined by 6.2%. Retail profit for the group was £77mn, down from £141mn for the previous 12 months. This decline was principally due to a significant decline in profits at Comet [down from £43mn to £10mn], and at Menaje del Hogar [down from a loss of £1.8mn to a loss of £23mn].

Thierry Falque-Pierrotin, CEO at Kesa, said that: "Darty France, and our established businesses in The Netherlands, Belgium and the Czech Republic, all maintained their market positions and improved gross margins". But in the UK, he said that actions have been taken, "to mitigate the impact of market conditions".

Netbook or Notebook

We've been hearing about the high number of retail returns from Netbooks or Mini-Notebooks for some time now. So, a study published yesterday by The NPD Group is welcome evidence of the misunderstanding between what consumers expect and what they actually get.

NPD's Netbooks II: A Closer Look study found that some 60% of consumers who purchased a Netbook instead of a Notebook thought that their Netbooks would have the same functionality as a Notebook - a fundamental error. Moreover, only 58% of consumers who bought a Netbook after originally considering a Notebook were satisfied with their purchase. But, for those consumers who bought a Netbook, when they considered buying a Netbook right from the outset, some 70% said that they were satisfied.

Despite this level of misunderstanding, and the resulting hit to satisfaction, the threat of cannibalisation across the form factors is very real. IDC's latest note on this shows that Netbook shipments in Q1 09 of 5.7mn units contributed, in some way, to a decline in Notebook sales of around 3.1mn units. As such, the industry needs to find a way of explaining that Netbooks are not the smaller and lighter Notebooks many clearly think they are. In fact, the NPD report found that around 60% of consumers said they bought a Netbook because of the enhanced portability factor, while a majority of those who bought a Netbook never take their Netbooks out of the house! Marketing - looks like it's over to you...

Tesco Q1

Tesco has just published its results for Q1 2010. Revenues increased by 9.7%, although excluding petrol, the increase was 12.6%. Much of this growth came from outside the UK - 11.4% at constant currency, but a whopping 20.1% using 'actual' exchange rates. The non-food side of the business 'resumed modest like-for-like growth', and this includes electricals.

Kesa Exits Switzerland

Kesa Electricals announced earlier today that it hopes to sell its Swiss operations to the electrical retail chain FUST for CHF20mn. Reuters said that analysts see this move as an early indication of things to come from the new CEO, Thierry Falque-Pierrotin. More will be announced when Kesa publishes its full year results on 24th June.

Selling via Twitter

Since 2007, Dell has generated some $2mn revenues at Dell Outlet which can be attributed directly to Twitter activity. An additional $1 in revenue can be indirectly attributed to Dell's Twitter initiative as some customers go on to buy a new system elsewhere on Dell.com.

Dell Outlet sells three types of product:

• Product Returns which have been refurbished to meet all original factory specifications;
• Previously Ordered New systems which were subsequently cancelled, or returned with the packaging intact and unopened; and
• Scratch and Dent products with 'cosmetic' blemishes, but which don't affect performance.

For Dell Outlet in the US, go here. For Dell Outlet in Europe [UK], go here.

Arcandor Bankruptcy

After several weeks of unfruitful negotiations - with potential suitors, and also with the German government - Arcandor has today filed with the Essen District Court to open insolvency proceedings. Principal subsidiaries, Karstadt, Warenhaus, Primondo and Quelle, have also applied for protection from their creditors. Thomas Cook, which is majority owned by Arcandor, is operationally and financially distinct from the other parts of Arcandor, and is therefore unaffected by the insolvency proceedings. Overall, this procedure affects some 43,000 employees, although their salaries are protected until August as part of the insolvency allowance.

Reports have suggested that Metro is still interested in buying some 60 Karstadt stores, and Otto - which is considered to be the world's largest mail order firm - might be interested in parts of Primondo.

Staples

Metro not merging with Arcandor

In the past few weeks, Metro has been linked with stricken Arcandor as a possible buyer of the Kardstadt department store chain. In a recent press release, Metro explained that there were no merger negotiations with Arcandor. Metro already owns the Galeria Kaufhof department store chain.

DSGi

Dell Q1/10

Dell's results for Q1 2010 show revenues down by 23% to $12.3bn, operating income down 54% to $0.41bn, and net income down 63% to $0.29bn. The consumer side of the business was down 16% to $2.8bn, with operating income at 'break-even'. Unit shipments, however, were up by 12%. Dell now claims to have its product on sale in some 30,000 retail outlets worldwide.

Apple Remodels Stores

Ron Johnson, Apple's SVP of Retail, has been talking to USA Today. He says that Apple will be opening 25 stores this year. This is down a little from the forecast of 35 - 40 given by CFO Oppenheimer at Apple's Q1 conference call. We are told that three of these store openings are to be in Europe - one in France, one in Italy, and one in Germany.

Johnson also explained that Apple plans to remodel some 100 of its stores this year, to make room for more customer training and more display space. The Genius Bar space is going to be increased by some 50%, and new display tables will enable 'twice the amount' of Macs and other products to be on display.

Despite this on-going investment in remodelling their stores, Johnson acknowledged that the recession has affected Apple's retail footfall. He says that while it is still strong, traffic is certainly down on last year.

HP Nosedive

Hewlett Packard's 09Q2 numbers tell a very mixed story, and the supporting slide deck tells this story the best through its tables and charts. Overall sales are down by just over 3% compared with the same quarter one year ago [although at constant currency they were up by almost 3%]. But, PSG's [the Personal Systems Group] sales were down 19%, while IPG's [the Imaging and Printing Group] sales were down 23%.

PSG's desktop revenues fell by 24%, with notebook revenues falling by 13% year-on-year. But when measured by units, desktop sales were down 13%, while notebook sales were up by 14%.

IPG's hardware units were down 27% year-on-year, with consumer segment [principally ink jet printers] sales down by 23%, and the commercial segment [principally laser printers] sales down by a whopping 36%. Supplies revenues - for many years, the major contributor to HP's profits - were down 14%.

Overall, HP's figures are a better indication of the current state of the market than Intel's recent pronouncement that we've reached the bottom of the market. HP is principally a channel-centric company, using a two-tier distribution model in EMEA. That may mean that these numbers have, in some ways, been distorted by de-stocking activity at their wholesalers and also at the resellers and retailers. But that, should only be a one-time activity, and we saw evidence of de-stocking last quarter. So we must presume that HP's figures represent the reality of the marketplace, and that it is the on-going twin perils of price deflation and shrinking demand.

DSGi Sells

Wal-Mart's Electronics

Commission Ends

Carphone Warehouse has announced that 

Differentiation

While price points will always be one element in the war for market share, PCs aren't all the same, and so price can't be the only differentiator. In a recent article - Decoding the Hype on Gadgets - David Pogue, the personal technology columnist for The New York Times, says that: "The cheapness of a computer is certainly an important factor. In fact, to some people, it's the single most important factor."

But, Pogue goes on to say that: "When something is made exclusively to be cheap, there's a price to be paid somewhere else. You may love your PC's cheapo price, but you may not love the manufacturer's low-rated, outsourced customer support. Or the ugly patchwork of stickers, logos and panels underneath. Or the huge, ungainly power brick. Or the obnoxious pre-installed junk-ware that drags the thing to a crawl from the first time you power it up. Or the annual antivirus-software subscription that you'll need for Windows. Or the time you'll lose trying to learn the potluck programs on your new PC from different companies, each with a different interface and conventions."

That's quite some rant from - it's clear to see - an avid Apple fan. But it could just as easily be about the differences between different PC brands - or, indeed, almost any core technology product. So why is it that so many retailers simply line up products, irrespective of brand or functionality, in a linear sequence based solely on price? That's just lazy retailing, and as a result, it's no surprise that consumers - especially those who aren't natural propeller heads - have precious little idea about how to choose the right product for their needs.

Attach

IDC in the US has just released some headline data from its Beyond-the-Box survey. This survey tries to assess the size of the PC 'basket', while making a distinction between consumers and small businesses.

Within the first 12 months of buying a PC, a US consumer will spend an average of $0.87 on additional PC-related purchases for every $1.00 spent on a PC. More than 50% of the survey respondents buy these accessories in retail stores at the time of purchase, while a further 20% or so will buy from retailers' online web-shops.

For small businesses, more than 50% of their accessories budget is spent at the time of purchasing a PC, while a further 26% of their budget is spent within the next three months. Small businesses [defined by IDC as those with less than 100 employees] spend an average of $284 on accessories and such like for each PC they buy.

Simon Herrick

Simon Herrick, CFO at Kesa, was one of the attendees at last week's World Retail Congress in Barcelona. According the The Observer, Herrick's hopes for his firm is today's tough climate were taken from a quote by Emmanuel-Joseph Sieyes who, when asked what he had done during the French Revolution, answered 'Survived'".

Best Buy: Private Label

Fnac Q1/09

PPR has just released its results for Q109. Fnac saw year-on-year sales decline by a little over 4%, with the best results coming from Belgium and Brazil, and the worst results coming from Spain. In France - its biggest market - Fnac's sales were down by 4.5%, despite a 10%+ rise in online sales.

Logitech Q4/09

Logitech has just announced its Q409 results, with overall year-on-year sales down by 32% - 36% in EMEA, 33% in the Americas, and 14% in Asia. While it's clear that the economic downturn is the principal cause of this decline, Logitech say that de-stocking in the channel has been a significant contributor. This trend has been affecting pretty much all hardware suppliers in recent months, but presumably at some point equilibrium will be reached and the sell-in and sell-out numbers will once again become aligned. Only at that point will we really be able to see the true impact of the recession on demand.

Lexmark Q1/09

Lexmark has reported Q1 revenues down by some 20% compared to the same period last year. According to segment information recorded in Lexmark's Form 8K, revenues in the US were down 14%, in Europe they were down 23%, and elsewhere in the world, they were down 26%. Overall, hardware revenues declined by 30%, while supplies revenues declined by 16%.

Tesco 2008

Arcandor Restructures

Best Buy Reorganisation

In its latest press release, Best Buy describes itself as a 'people powered organisation'. It says that: "The company's Blue Shirt employees are the core of Best Buy. As a people-powered organisation, Best Buy invests heavily in discovering and training employees in customer service, product knowledge and financial acumen. As the store employees are closest to the customers, the company relies on them for their innovative ideas and feedback to enhance customers' shopping experiences".

But in a recent Associated Press piece that quotes Bernstein analyst Colin McGranahan's latest note on Best Buy, we learn that a new reorganisation program will lead to job cuts and lower pay for thousands of Best Buy's Blue Shirts. McGranahan estimates that some 1,000 salaried assistant store managers could be cut, and around 8,000 senior associates could receive pay cuts as they are demoted to more junior sales associate roles.

If we go back to March 2007, this type of action may seem all too familiar. Back then, Circuit City laid off some 3,400 of its highest paid sales associates, replacing them with lower paid - and lower skilled - employees. And we all know what happened to Circuit City.

Electro World

Electro World is DSGi's chain of some 36 superstores in Czech Republic, Hungary, Poland, Greece and Turkey. Last November, it was reported that the Eastern European stores were to be put up for sale. Now, there are suggestions in the local media that Slovak company Nay Elektrodom wants to buy these stores. Enterprise Investors took at 48% stake in Nay back in 2005, so presumably the funds can be made available if the business case looks good.

Bottomed Out?

Intel published its Q1 results yesterday. Year-on-year comparisons make for uncomfortable reading - revenues down by 26% and net income down by 55%. But, Intel's CEO, Paul Otellini, said: "We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns". Nevertheless, Intel declined to issue a formal revenue projection for Q2. 

Stalking Horse

Systemax has announced that it has signed a 'stalking horse' agreement to purchase various assets of Circuit City's eCommerce business for $6.5mn, plus a share of the revenues generated from the utilisation of those assets over a 30 month period. The 'stalking horse' process is, in principle at least, relatively simple, but it can be a legal minefield. What it does mean is that we will have to wait awhile to see if the sale goes through.

Systemax did something similar with CompUSA in early 2008.

CompUSA 2.0

Some 15 months ago, Systemax agreed to buy the CompUSA brand, trademarks, eCommerce business, and a handful of stores. This followed CompUSA's earlier acquisition by Gordon Brothers Group, a specialist 'restructuring' firm, back in December 2007.

Now, Wired blogger Priya Ganapati has posted a lengthy article about the resurrection of CompUSA stores. It seems as if there is an attempt to build a seamless multi-channel approach by the 'soft integration' of CompUSA's stores  with Systemax's Tiger Direct online business. What's not clear, though, is whether the physical stores act more as a showroom for product which is eventually bought online - whether that be from Tiger Direct or elsewhere.

Systemax trades as Misco in Europe.

Dark Forces

Today's FT reports on a recent circular by Redburn Partners' analyst Robert Miller. Miller says that: "We have long felt that two dark forces of the electricals industry - deflation and online attrition - made the off-line electricals leaders in the UK and France [DSGi and Kesa's Darty] uninvestable... there are fledgling signs that both of these dark forces may be neutralising". If Miller is correct, then this is very good news for European electricals specialists.

DSGi Nordic Closures

DSGi has announced that it will be closing 27 stores in Sweden and Finland. In Sweden it will shut all 8 PC City stores. In Finland, 19 of the Markantalo stores will be closed, with the remaining 4 stores converted into DSGi's other Finnish brand, Gigantti. Markantalo and Gigantti are part of Elkjop, the leading electrical retailer in the Nordics. DSGi acquired Elkjop in 1999.

Surcouf

Surcouf is a small outpost of the PPR empire. It's been up for sale for over a year, and now it appears to have found a buyer - Hughes Mulliez, a scion of the retailing family which owns majority stakes in Auchan, Boulanger and many other chains. Hughes Mulliez founded the electronics chain Youg's about 10 years ago. The holding company - L'Association Familiale Mulliez - makes the extended Mulliez family one of the richest in France.

Best Buy 2008

Metro 2008

Best Buy Remix

Best Buy Remix is an API [Application Programming Interface] Project based on Best Buy's product catalog data. It was founded by Kevin Matheny, Best Buy's senior eBusiness architect, in September 2008.

According to Internet Retailer, Best Buy is currently demonstrating ConsumersPrice.com - a site where consumers can request alerts of future Best Buy product pricing, and subsequently record voice reviews of products. ConsumersPrice.com is run by Ribbit, a company acquired by BT last Summer.

As Internet Retailer explains, a shopper looking for a product will be able to enter a preferred price on a specific product configuration and request an SMS or email alert whenever the product becomes available at or below the preferred price. Various social media like Twitter, Flickr and others are also available on this site.

ConsumersPrice.com is still in its beta test period.

Lexmark's ISD

Lexmark is changing the name of its Consumer Printer Division [CPD] to Imaging Solutions Division [ISD] because it is primarily targeting the SoHO and SMB segments via the retail channel. In the US, it has just announced its latest printer line-up which will be stocked at Fry's, InkStop, MicroCenter, Office Depot, OfficeMax and Staples. This seems like yet another aspect of Lexmark's previously announced shift in direction for its consumer business from selling units to selling pages. Lexmark is attracted by the lower end of the business market, which behaves in a similar fashion to the consumer segment, because it prints far more pages, and hence consumes much more ink and toner per unit.

Staples 2008

Carrefour 2008

Circuit City RIP

This Sunday, Circuit City will finally shut its doors in the US. While in Canada, Circuit City's chain of more than 750 'The Source' electronics stores are being bought by Bell Canada.

The process of liquidating Circuit City's $1.7bn inventory has been undertaken by four firms in the US - Great American Group, Hudson Capital Partners, SB Capital Group and Tiger Capital Group. Firms like these have been dubbed the undertakers of the retail business by Time magazine. These four liquidators paid some $800mn for Circuit City's merchandise, less than 50% of their supposed value.

DSGi Renewal and Transformation

DSGi

Department Stores

Urbis is an Australian-based property consultancy, with a particular interest in the retail sector. Its markets are principally in the Middle East, SE Asia and Australia. Michael Baker, a consultant at Urbis, writes a bi-monthly newsletter called Retail Perspectives. He also writes occasional articles for the Sydney Morning Herald.

A few weeks ago, Baker wrote an article on the Spanish retail market, using Barcelona as his reference point. He makes good work of describing the Inditex phenomenon [this is the group that owns Zara, and several other fashion formats]. But it's his contrast with the fortunes of El Corte Ingles which makes entertaining reading.

He describes El Corte Inglés' flagship store on the east of side of the Placa de Catalunya as: "a hulking, white and almost windowless" department store, which "resembles a huge motionless iceberg, as though waiting to be towed to a warmer place so it can melt".

Baker goes on to say that "inside El Corte Inglés the scene is reminiscent of department stores the world over - a once dominant retail format that is now just going through the motions. Its customer base is ageing, along with its fit-out. Customers rummage quietly among discounted items. There are no queues at the register".

Over the years, many commentators have forecast the demise of the department store, but it's still a format that can surprise. Take one modest example - John Lewis, a department store chain that is often described as the bellwether of middle class spending in the UK. In recent years, John Lewis has significantly increased its capabilities in consumer electronics. For example, its latest weekly sales figures [they publish these numbers every week] show that its electricals and home technology buying directorate is currently being boosted by strong sales of televisions, set-top boxes, satnavs, camcorders and cameras. There won't be many stores, of any colour, saying that right now...

Office Depot Liquidity

Office Depot has just announced its Q4 2008 results. Overall, revenues were down by 15% compared with same period in the previous year, and while the decline was exactly the same in the International Division [meaning all business outside North America], in local currency sales declined by a far more manageable 4%. Office Depot reports on three segments in its International Division - the Direct Channel, where sales were down by 7% in local currencies; the Contract Channel, where sales were down 2%; and the Retail Channel, where sales were up by 1%.

As Reuters later reported, Office Depot's shares took a hammering as a consequence of these results, falling by some 26%, principally because the company said that it would be seeking new liquidity sources in 2009 - a combination of sale and leaseback deals on its US and European properties, and factoring its receivables in Europe. It was only back in September last year when the company announced that it had entered into a $1.25bn asset-based credit facility - secured by their inventory, receivables, and cash and depository accounts.

Belkin Blooper

Back in January, The Daily Background, Arlen Parsa's blog, revealed that a Business Development Rep at Belkin had been offering to pay for positive reviews of an otherwise poorly regarded Belkin USB Hub. As David Pogue explained in the New York Times, "There's no grey area here, no possible room for doubt: manipulating online reviews is contemptible. It violates our trust in the web's ability to harness the wisdom of the masses."

As a result of this 'discovery', Mark Reynoso, President of Belkin, posted a letter on his firm's website to apologise, saying: "We know that people look to online user reviews for unbiased opinions from fellow users and instances like this challenge the implicit trust that is placed in this interaction. We regard our responsibility to our user community as sacred, and we are extremely sorry that this happened".

Global 100 law firm Pinsent Masons explains, " In Europe it is illegal for a company to commission glowing reviews for its own products if they create the false impression that they were written by consumers. In the UK, the rule is found in the Consumer Protection from Unfair Trading Regulations. Company directors face a maximum penalty of two years in prison if convicted of breaching the regulations which came into force in May 2008".

PointMobl

Friday's Dallas News tells us that RadioShack has soft launched a new concept store in the Dallas area. The reporter, Maria Halkias, tells us that the PointMobl store "sells portable devices in an upscale decor of white fixtures and clean glass" with absolutely no sign of the store's owners, RadioShack. In fact, if you look at the PointMobl website, the only reference to RadioShack is the contact address for any queries regarding their privacy policy - and that happens to be RadioShack's corporate headquarters in Fort Worth, Texas. These concept stores - and there appear to be three right now, all in Texas -  were originally described in a report by Deutsche Bank analyst, Mike Baker, back in July 2008.

Working Capital

Booz & Co, the recently re-named consulting firm, has a new Working Capital Profiler on its web site. It comes pre-loaded with company data for the most recently reported four quarters [those ending up to 29th November 2008]. At present, the Profiler only covers US-based companies. In the retail sector, that amounts to a little under 100 organisations, including the leading US retailers of consumer electronics: Amazon, Best Buy, Costco, Office Depot, OfficeMax, Radioshack, Staples and Wal-Mart.

The tool does not explain exactly how the calculations for Receivables Days, Payables Days and Inventory Days are calculated. As there is certainly more than one way to make these calculations, a little more transparency would be good. Nevertheless, as Booz applies the same formula to each company, the real benefit of the tool is comparing individual companies with their peer group.

As an example, the numbers for Best Buy show that compared to its retail peers [and that's not just those in the consumer electronics business, it's in comparison with the whole retail segment], it could improve Receivables Days by 8, when compared with the performance of the top quartile and Inventory Days by 12, whereas Best Buy's Payables Days are already well within the top quartile. Overall, Best Buy's Working Capital Days, or Cash Conversion Cycle, if it were based on average top quartile numbers, could improve from a positive 13 Days to negative 7 days. According to the Booz Working Profile Calculator, that would be the equivalent of reducing Best Buy's working capital needs by over $2bn...

Experience Store

When is a store not a store? When it's an 'Experience Store'. Microsoft's announcement that it will start opening its own retail stores begs the question - are these going to be commercial retail stores which trade to make a buck, or are they going to be more like the Retail Experience Centre in Redmond? Perhaps it will be like the occasion when Nokia opened its first Experience Centre in Moscow, and one journalist described it as more like a "mini-science museum that a high street mobile phone store".

Maybe Microsoft will try to emulate Hewlett Packard? HP has opened three Concept or Experience Stores in EMEA. It opened its first in Johannesburg, South Africa in April 2008. This was designed by US-based agency, Polychrome, as was a concept store in Harrods, the upscale department store in London. The latest HP Experience store opened in Lagos, Nigeria in December 2008. It's not at all clear whether these are just high profile presentation suites or demonstration centres, or whether they mostly serve as experiments in retail design which may be used subsequently in HP's program of store-in-store sites. HP's Store-in Store openings have been announced all across EMEA - in Dubai, in The Netherlands, in Norway, in Portugal, in Saudi Arabia, in Sweden, in Turkey, and several other countries.

Microsoft!

Monday 16th February 2009 marks the first day at Microsoft for David Porter. It's also the first day in the office for Porter's title - Corporate VP of Retail Stores. The company's announcement says that Porter will: "Lead Microsoft's efforts to create a better PC and Microsoft retail purchase experience for consumers worldwide through the development of the company's own retail stores". It goes on to say that: "Defining the timeframe, locations and specifics for planned Microsoft-branded retail stores will be Porter's first order of business. The purpose of opening these stores is to create deeper engagement with consumers and continue to learn firsthand about what they want and how they buy".

Porter is currently Head of Worldwide Product Distribution at DreamWorks Animation SKG, but his real value lies in a 25 year tenure at Wal-Mart. This all sounds uncannily like Apple's appointment of Retail SVP Ron Johnson from Target back in January 2000. But that's probably the only similarity between the way these two companies can approach running their own retail stores. 

Best Buy's Wall Numbers

Three years ago, Cabel Sasser, founder of shareware company Panic, wrote about a set of numbers posted on the wall of Best Buy stores. At that time, this post drew a lot of attention, and something over 100 comments. It turns out that each of these numbers is a store performance metric - related to either shrink performance or attach rates. 

Working from right to left, and top to bottom, these numbers report on the following:

[1] 469 - this is a shrink metric, possibly connected with a bonus pay-out;

[2] .23 - this is also a shrink metric, probably expressed as a percentage;

[3] 77 - this is an attach metric related to Best Buy's PRP or 'Product Replacement Plan';

[4] 7 - this is also an attach metric, bizarrely related to magazine subscriptions;

[5] 2.22 - this is also an attach metric related PRP attach performance;

[6] 100 - this is a measure of MasterCard applications [related to the metric below];

[7] 3 - this a measure of Best Buy card applications; and

[8] 100 - this is an attach metric for Account Shield.

Trade-in Program #3

For those of us with a hoard of out-of-date electronics which is not going to attract a decent trade-in allowance, and if you're based in the US, try Best Buy's US-wide recycling program which is being launched in two weeks time.

Starting on 15th February, consumers will be able to take up to two units per day per household to any Best Buy store in the US. They will be charged a $10 recycling fee for products with a screen, but for other products, it would seem that it's fee-free. In exchange for these unwanted products they will receive a $10 Best Buy gift card straight away.

Best Buy already operates recycling kiosks for used toner and ink cartridges and other types of consumable. It also offers a 'haul away' service for old TVs when when replaced with new one installed by Best Buy's Geek Squad or home delivery facility.

Trade-in Program #2

In an earlier post we described how RadioShack works with CExchange to run its trade-in program. But CExchange isn't the only game in town. Best Buy runs a similar operation for what it calls 'gently used electronics', but powered by Dealtree.

Another, US-based, trade-in merchant, but seemingly without major retail affiliates, is Gazelle. And specialising in the mobile phone category there are ReCellular and Cell for Cash.

Elsewhere, there are other trade-in operators making inroads into this 'credit crunch friendly' business. In the UK, SpeedSell was set up about one year ago, and currently works independently, without retail affiliates, and just in the games category. And in Germany, there's Trade-a-Game, which seems to operate a slightly different business model to SpeedSell, but competes in the same category.

Cash Conversion Cycle

Working Capital is raising its profile more than ever thanks to the diminishing availability of cash from the markets, but it has been a noteworthy element of Amazon's business for some time. Amazon focuses on three financial measures - maximising profit dollars [not margin, which is usually expressed as a percentage], optimising free cash flow [at Amazon, expressed as free cash flow per share], and increasing ROIC [Return on Invested Capital].

During his presentation at Barclays Capital Global Technology Conference in San Francisco back in December 2008, Tom Szkutak, Amazon's CFO, put up a Cash Conversion Cycle chart. This is sometimes known as a measure of the Days of Working Capital, while Amazon calls it the Operating Cycle. It is calculated by adding together inventory days and receivables days, and then deducting payables days. For Amazon, as of 30th September 2008, the results were as follows: Inventory Days - 29, Receivables Days - 5, and Payables Days - 55. Roll the numbers and you get a positive cash conversion cycle of 21 days - that means, in an average cycle, cash comes in three weeks before it has to go out.

Amazon Shines

Amazon has just released its Q4 FY08 results. Net sales increased 18% to $6.7bn from Q4 FY07. Excluding adverse exchange rate adjustments, sales would have grown by 24%. Operating income was flat at $272mn, compared with $272mn in the comparable period in FY07. For the full fiscal year, net sales climbed 29% to $19.17bn, and operating income grew by 28% to $842mn.

International sales, that's sales from Amazon's sites in the UK, Germany, France, Japan and China, now represent 46.6% of the firm's overall sales. That's up by just 1.2% from 2007. But, operating income from international sales generated 59.3% of the total in 2008. That's up from 52.9% in 2007.

Trade-in Program #1

Back at the end of October, RadioShack launched an online electronics trade-in program in collaboration with CExchange. The principle is pretty simple. You first go to the Trade-in Program page of RadioShack's website and register or log-on. You then select the product that you want to trade-in. You are asked whether the machine is 'fully functional' and whether or not you will also be trading-in the charger. You then have to rate the condition of the machine - is it broken, is there evidence of heavy wear, is there evidence of light wear, or is it 'cosmetically excellent'. Once you've answered these questions, CExchange quotes you a price. If you're happy, you get to print off a pre-paid shipping label, box-up the product, and send it off [only in the US, as you would expect]. Then, some two weeks later you receive a voucher which can be redeemed either online or in a RadioShack store. It's not an altogether new idea, but sounds simple and efficient. More like this please.

Logitech Q3/09

Just a few days ago, Logitech explained that it would withdraw its growth targets for FY09. Well, no wonder. Logotech has just announced its Q3 FY09 results, and it's not looking good at all. Gerald Quindlen, Logitech's CEO, said: "All indications point to an even weaker retail environment in the coming months. Consequently, our plans assume that in Q4 we will see year-over-year declines in sales, operating income... and gross margin that are similar or worse than the year-over-year declines we experienced in Q3". In Q3, Logitech's sales were 16% down on the same period in FY08. Gross Profit was down 32%, with Gross Margins declining from 36.9% to 29.9%. Operating Income was down 63%. And Net Income was down 70%...

Apple Retail Update

Apple announced its Q1 2009 numbers yesterday. During the subsequent conference call, Apple expanded on some of its activities in the retail channel.

Tim Cook, Apple's COO, explained that there are currently 286 Apple store-in-store sites in Best Buy stores in the US, but this is going to more than double to around 600 in the next six months.

Peter Oppenheimer, Apple's CFO, said that Apple expects to open between 35 -  40 of its own stores in the current fiscal year. The majority will be outside the US, including a first Apple Store in China.

Kesa Down Again

Kesa Electricals, home to Comet, Darty, Menaje Del Hogar and others, has announced its results for the trading period from 1st November 2008 to 8th January 2009. While the results look good in Sterling, with an 11.0% increase, they declined by 2.2% in local currency, and by 5.5% on a like for like basis.

In France, Darty's like for like revenues declined by 6.2%, while in the UK, Comet's like for like revenues declined by 2.5%. There was 'another significant fall in revenues at Menaje Del Hogar', but the numbers from their Spanish subsidiary have not been published as a separate line item.

DSGi Down

Circuit City Auctions

Circuit City has "received expressions of interest for Going Concern Transactions and continues to explore various financing alternatives". As such, the date for Circuit City's three inter-connected auctions have been moved.

A 'Miscellaneous Asset' auction will now take place on 13th January, starting at 12.00 EST. A 'Store Closing' auction will take place on 14th January starting at 12.00 EST. And, a 'Going Concern' auction will start of 15.00 on 14th January, or following on from the conclusion of the 'Store Closing' auction.

Circuit City's local newspaper - the Richmond Times-Dispatch - suggests that the 'expressions' of interest have come from Ricardo Salinas [who owns Grupo Elektra, which, amongst other things, runs Latin America's largest chain of consumer electronics stores] and Mark Wattles [who owns the Ultimate Electronics chain]. Both of these investors are significant shareholders in Circuit City.

SWOT Analysis

Best Buy's current CMO is Barry Judge and his blog can make interesting reading for those of us at the interface between technology suppliers and their retail channel partners. Back in October, Barry invited the readers of his blog to contribute towards the SWOT that he and his colleagues were developing as part of their annual planning process. Judge got over 30 responses, some of which added real insight to the initial skeleton framework that he posted on his blog. An utterly fascinating use of social media.

Bleak Outlook

The British Retail Consortium and KPMG have worked together for several years to produce a monthly Retail Sales Monitor for the UK. The latest edition, published earlier today, carries the title: 'Worst December in Survey's History'.

Helen Dickinson, Head of Retail at KPMG, said: "December's performance has historically set the scene for the year ahead, so the outlook is indeed bleak. In a business where cash is even more important than ever, due to the impact of the credit crunch, retailers did all they could in December to keep the money coming in, raising discounts across the month to unprecedented levels. That this was the worst December sales performance since the survey began 14 years ago is testament to the severity of the shift in mentality of the consumer."

Dixon's Downtime

"To ensure we continue to improve your shopping experience with PC World we are upgrading our website. Unfortunately this means that the website is currently unavailable." It says something similar over at www.dixons.co.uk. A spokesman for DSGi told Channel Register that they: "Had some routine maintenance last night which has caused problems". To happen in the week when DSGi will be publishing its hugely disappointing results from the Christmas period can't be a good omen.

Apple Store Openings

Reliable AppleStore blogger, Gary Allen, predicts the opening of four new Apple Stores in Europe in the first half of 2009 - Brighton [UK], Paris [France], Reading [UK] and Zurich [Switzerland]. There are currently 20 Apple Stores in the UK, 1 in Germany [Munich], 1 in Italy [Rome], and 1 in Switzerland [Geneva].

DSGi Drop

The UK's Sunday Times says that over the next few days, DSGi will "unveil its worst Christmas trading performance since the recession of the early 1990s, with a savage double-digit drop in like-for-like sales". Reports elsewhere suggest analysts believe that DSGi's sales drop was around 10% over the 12-week Christmas period. DSGi's share price has fallen by more than 70% over the past 12 months.

Comps Lesson

Best Buy has just reported a 6.5% reduction in comparable store sales for Fiscal December 2008 [which ended on 3rd January 2009]. Comps, Same Store Sales, Like-for-Like Sales - these all mean roughly the same thing - they exclude sales from new store openings, new store acquisitions, and such like. But Comps is not a standard term with a standard definition. It certainly doesn't conform to GAAP. Unlike many others, Best Buy makes a good job of trying to explain how it determines Comps.

Best Buy's press release says that Comps are: "Comprised of revenue at stores, call centres and web sites operating for at least 14 full months, as well as remodeled and expanded locations. Relocated stores are excluded from the comparable store sales calculation until at least 14 full months after reopening. Acquired stores are included in the comparable stores calculation beginning with the first full quarter following the first anniversary of the date of the acquisition." Exchange rate fluctuations are ignored as far as Best Buy's Comps calculation is concerned.

Best Buy goes on to explain that: "The method of calculating comparable store sales varies across the retail industry. As a result, Best Buy's method of calculating comparable store sales may not be the same as other retailer's methods."

Resource Redeployment

Lenovo has announced a 'resource redeployment' plan - or, in more prosaic terms, a massive layoff of 2,500 employees [that's around 11% of its global workforce]. This type of language has been ridiculed quite recently by FT columnist, Lucy Kellaway. She awarded a 'prize' for the Best Term For Sacking People - one of her favourites was 'Dynamic Rightsizing', which means regular sackings, only more exciting and souped-up. But her winner, was to 'Upgrade', a term apparently used by a firm in the US which said to its sacked employees: "We are going to upgrade you with immediate effect. We are going to allow you to move on in order that you can use your talents and skills more effectively and thus upgrade your career and opportunities".

Intel Downgrade

Intel has announced preliminary Q4 results with revenues down 23% year-on-year to approximately USD8.2bn. Back on 12th November, a mere 8 weeks ago, Intel had already reduced its forecast Q4 revenues from USD10.1 - 10.9bn to around USD9bn.

As reported in the San Francisco Chronicle, the fact that Intel has had to revise its Q4 numbers twice "indicates how deeply the economic meltdown has damaged the semiconductor industry". "Consumers, singed by layoffs and falling home prices and stock portfolios, have scaled back their spending as well." More details will be available when Intel reports formally on 15th January.

Logitech Slowdown

Just one month after celebrating the shipment of its billionth mouse, Logitech has announced that it has withdrawn its growth targets for FY09. The explanation given by CEO Gerald Quindlen is a combination of reductions in customers' inventory levels plus an expectation that the economic environment will worsen in the coming months.

Logitech will be reporting its Q3 results on 20th January.

Media Markt at 30

Europe's largest specialist electronics retailer - Media Markt - will be 30 years old in November this year. To celebrate this anniversary, the company is planning a series of initiatives over a 30 week period, starting this month with a zero per cent financing offer. All products with a sales price of €300 or more can be financed free of charge for 30 months.

Media Markt is currently present in some 15 European countries, operating some 540 stores. With very few exceptions [Portugal, for example], when Media Markt opens its first store in a new country, it isn't too long before it becomes the No.1 specialist electronics retailer in that country.