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.

DEC5

DEC4

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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.