Archive for August, 2010

Zara takes the plunge into crowded online market (AFP)

Saturday, August 28th, 2010 | Finance News

MADRID (AFP) – Europe's largest clothing retailer, Spain's Inditex, is taking its flagship Zara brand online, but it can expect stiff competition from other giants of high-street fashion already well-established in cyberspace.

Zara's virtual boutique will be available on Thursday in selected European markets: Spain, Germany, France, Italy, Portugal and Britain.

From 2011, it will be expanded to the United States, Japan and South Korea.

But it will enter an already crowded sector, where its main rivals in low-cost fashion have been operating for years.

US retailer Gap, which has been online in the US since 1997, expanded the service to 55 countries on August 16.

Sweden's H&M, Europe?s second-largest clothing retailer, has been selling online since 1998 in seven countries, including Germany, and plans to move into another major market, Britain, on September 16.

Zara's late entry to the market may be a surprise, but it may also have anticipated a boom in cyberspace clothes shopping.

Clothing sales represented just 2.5 percent of online commerce in Spain last year, and 5.6 percent in France, according to industry experts in these countries.

Another high-street brand, Mango, has been online since 2009, but receives only about 1.0 percent of its revenues in this way.

Gap has performed better, pulling in 1.1 billion dollars in online sales last year, or 7.7 percent of its total.

But a recent poll by the Nielsen institute in 55 countries showed that clothes are now the second most popular products online, after airline tickets but before books.

Mango's aim of multiplying its online sales seven-fold in three years is one indication that the market may be about to take off.

Zara's arrival "is eagerly awaited, as we are in the middle of boom in Internet clothing sales," said Nathalie Gennerat, a consultant at the French Fashion Institute.

She pointed to Britain, where almost 10 percent of clothing is purchased online.

Previously people were reluctant to buy clothes online because it is impossible to try them on first.

"There was also the question of shipping costs" and the problem of returns, said Jacqueline Anderson, an analyst with Forrester Research.

But companies now pay closer attention to some of these concerns, offering to pay a certain amount of the shipping charges or making exchanges easier, she said.

Zara said it wants to "reproduce the buying experience of its boutiques on the Internet," with 100 percent of its products available at the same price of its high-street stores, and extend its website to the 77 countries where it is already present.

It has already prepared the ground.

Its Facebook page, launched last year, now has 4.4 million fans. Its IPhone application has been downloaded some two million times. And, even though you can't yet shop there, its official website received 33.5 million visits last year.

Inditex, which owns seven other brands including Massimo Dutti and Bershka, sees the move as a "major strategic step" which will boost sales rather than eating into the earnings of the shops themselves.

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BHP says timed Potash bid as rivals were weakened (Reuters)

Saturday, August 28th, 2010 | Finance News

MELBOURNE (Reuters) – Global miner BHP Billiton on Sunday played down any chance of raising its $39 billion bid for fertilizer maker Potash Corp, saying it had timed its move to catch out weakened rival bidders.

Chief Financial Officer Alex Vanselow, speaking in an Australian television interview, also said the hostile bid had been timed to ensure more ready access to credit markets.

"The opportunity in Potash is that we are now in a situation that our balance sheet allows us to raise the credit necessary to buy, the valuations match, and basically if you look at the landscape of competitors, they're not in the same position as we are," Vanselow told ABC's Inside Business show.

"So you've taken all this into consideration -- you can see this is an opportune time to make a bid."

BHP, the world's biggest miner, unveiled its biggest half-year profit in two years on Wednesday, with just $3.3 billion in net debt and gearing at a low 6 percent, putting it in a strong position to raise its offer if necessary.

Potash Corp's shares last traded 14 percent above BHP's offer price, as investors bet that BHP will have to pay more or another bidder will emerge, but Vanselow said there was no need for BHP to raise its offer of $130 a share.

"There is only one offer on the table, so why would we compete against ourselves?"

Rival miner Rio Tinto is considered unlikely to make a counterbid as it has only just recovered from a mountain of debt it took on for its $38 billion takeover of Alcan three years ago. Rio Tinto has since said that it would only consider smaller acquisitions.

Brazil's Vale, which is building a potash business, has said it is not looking at Potash Corp.

That has stoked speculation that the only potential counterbidders would include a player from China, the world's biggest importer of potash, a key nutrient needed to boost crop yields as food consumption soars.

China's largest fertilizer distributor, Sinofert Holdings Ltd, said on Thursday it was worried a BHP takeover of Potash Corp would have a big impact on the company but would not say if its parent, Sinochem, was planning a rival offer.

BHP CEO Marius Kloppers is in North America, set to meet with BHP shareholders to discuss the bid and the group's results. He is expected to start wooing Potash Corp shareholders, many of whom are also BHP stakeholders.

A Reuters survey indicated Potash shareholders would accept $162 a share.

Under UK listing rules, the $39 billion offer does not need a BHP shareholder vote as it is worth less than 25 percent of BHP's market value of $188 billion the day before the bid was launched.

But if the bid were sweetened, the 25 percent threshold would apply to BHP's market value on the day before the announcement of the higher offer. Based on BHP's market value on August 27, an increase of just over 10 percent in the bid to $43 billion would be enough to trigger a BHP shareholder vote.

Vanselow said BHP would also look into what happened at Santander, the euro zone's largest bank and an adviser on BHP's bid, after one of the bank's employees was charged by the U.S. Securities and Exchange Commission with insider trading in Potash Corp securities ahead of the bid.

Asked if BHP would hesitate to use Santander again, he said: "I think we will investigate what happened, we'll get the feedback from Santander and then we'll decide on that."

(Reporting by Sonali Paul; Editing by Mark Bendeich)

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Chevron: Most oil removed from Utah leak site (AP)

Saturday, August 28th, 2010 | Finance News

SALT LAKE CITY – A Chevron spokesman says very little of the 33,000 gallons of oil that spilled into a Salt Lake City creek in June remains in the area.

Spokesman Dan Johnson tells the Desert News for a story published Saturday that crews have identified and removed most of the visible oil at Red Butte Creek, and "hand-washing" operations have ceased.

Johnson says the bulk of the cleanup effort has focused on the actual spill site, where 1,250 tons of oil-stained soil have been removed.

Plans also call for re-contouring the ground where the oil seeped from a 10-inch diameter pipe on June 11 spill.


Information from: Deseret News,

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