Are these early signs of green shoots? Excuse the pun, but Philip Green is involved, so that may well be the case.
Apparently Green is a secret backer to buy the O2 shpping centre in London's Finchley Road for 92m pounds. If he's involved, he may well have seen now as being an ideal time to buy and that the collapse in commercial real estate is nearing an ebb.
It seems that Green is closely monitoring the property market for opportunistic raids. Once suggestion is that he may be looking for departement store-style shops to showcase his brands.
Only this month Green decided to integrate BHS and the Arcadia brands, including Top Shop, Burton and Miss Selfridge, in addition to announcing a roll our of Top Shop in the US.
A real entrepreneur
Monday, 9 March 2009
Friday, 6 March 2009
Quantitative Easing - do you get that from Boots...?
Quantitative Easing - sounds like some deadly remedy from childhood days. A lethal cough linctus or on similar lines to 'milk of magnesia'... It congures up images of Victorian institutions ...
But in fact, as we all now know, it's a fancy way of saying Gordy is printing money. It feels a bit like joining the ranks of Zimbabwe or being in the Weimar Republic in the 1930's - but what are the implications for us all and what is likely to happen? It didn't work for Japan in the late 90's so why take this big last gamble?
Reading the press on this, my conclusion is that we don't have much choice. We're damned if we do nothing and seem to be critisicised if we don't do anything. But 75 billion pounds of new money - it's mind boggling.
A month ago I wrote about business needing a kick start instead of another rate drop. Yesterday the Bank of England dropped the rate to 0.5% - a new unknown territory. Now 'quantative easing' can begin apparently, as all the other firepower has been used.
What will happen is that the BOE will create 'virtual money' (not actually print cash) and use this to buy bonds and other securities from banks in the hope that they will use the money to lend to business and consumers.
The big risk is that the banks will hoard the money and sit on their hands, and nothing will happen.
Let's hope not, as there's a lot staked on this, and not many options left.
But in fact, as we all now know, it's a fancy way of saying Gordy is printing money. It feels a bit like joining the ranks of Zimbabwe or being in the Weimar Republic in the 1930's - but what are the implications for us all and what is likely to happen? It didn't work for Japan in the late 90's so why take this big last gamble?
Reading the press on this, my conclusion is that we don't have much choice. We're damned if we do nothing and seem to be critisicised if we don't do anything. But 75 billion pounds of new money - it's mind boggling.
A month ago I wrote about business needing a kick start instead of another rate drop. Yesterday the Bank of England dropped the rate to 0.5% - a new unknown territory. Now 'quantative easing' can begin apparently, as all the other firepower has been used.
What will happen is that the BOE will create 'virtual money' (not actually print cash) and use this to buy bonds and other securities from banks in the hope that they will use the money to lend to business and consumers.
The big risk is that the banks will hoard the money and sit on their hands, and nothing will happen.
Let's hope not, as there's a lot staked on this, and not many options left.
Tuesday, 3 March 2009
Who has been swimming naked....?
As you will read from previous posts, I am determined to hunt out and highlight, wherever possible, the upside of the current downturn.
It was Warren Buffet who made the memorable comment in 2007 'When the tide goes out, you learn who's been swimming naked'. This has been particulartly the case in the US with Maddof (pronounced apparently as 'made-off' as in 'made off with your money'), and more recently Sanford, but I wanted to turn this analogy another way.
Now the economic tide is out, we can see who has been swimming naked. There were no great shocks when Woolies went down - we all knew it had been on the cards for years, and that the business had survived due to the boom years. Just as a below-average employee can survive in a large corporate environment when they should have been fired years before, so too poorly performing businesses seemed to get swept up in the frenzy.
The difference in performance between mediocre and great business in economic boom time is far smaller that you might think; in difficult times this difference can become a chasm. Therefore businesses that offer genuine value to customers will out-perform the rest - and dramatically so. So what differentiates the well dressed swimmers from the embarassed?
Some are well-placed because of the demise of their competition. Take for example Mothercare - a strong International business which is capitalising on the demise of Woolworths and Adams. Trusted brands that have been doing the right thing for a long time are also cleaning up - Pizza Express and McDonalds for example, are benefitting from those customers who believe they offer real value for money.
Niche players are thriving too. You wouldn't have thought of Whitbread as niche, but they have focussed on 3 core areas and have businesses that are performing well in the current environment - Premier Inn, Costa and Beefeater.
It was Warren Buffet who made the memorable comment in 2007 'When the tide goes out, you learn who's been swimming naked'. This has been particulartly the case in the US with Maddof (pronounced apparently as 'made-off' as in 'made off with your money'), and more recently Sanford, but I wanted to turn this analogy another way.
Now the economic tide is out, we can see who has been swimming naked. There were no great shocks when Woolies went down - we all knew it had been on the cards for years, and that the business had survived due to the boom years. Just as a below-average employee can survive in a large corporate environment when they should have been fired years before, so too poorly performing businesses seemed to get swept up in the frenzy.
The difference in performance between mediocre and great business in economic boom time is far smaller that you might think; in difficult times this difference can become a chasm. Therefore businesses that offer genuine value to customers will out-perform the rest - and dramatically so. So what differentiates the well dressed swimmers from the embarassed?
Some are well-placed because of the demise of their competition. Take for example Mothercare - a strong International business which is capitalising on the demise of Woolworths and Adams. Trusted brands that have been doing the right thing for a long time are also cleaning up - Pizza Express and McDonalds for example, are benefitting from those customers who believe they offer real value for money.
Niche players are thriving too. You wouldn't have thought of Whitbread as niche, but they have focussed on 3 core areas and have businesses that are performing well in the current environment - Premier Inn, Costa and Beefeater.
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