×
81 418
Fashion Jobs
MACY'S
Manager, Business Administration
Permanent · Dublin
MACY'S
Asset Protection Security Guard, Boulder Twenty Ninth Street - Full Time
Permanent · Boulder
ATHLETA
General Manager - Westfarms
Permanent · West Hartford
NEIMAN MARCUS
sr Manager Group Sales Exp
Permanent · King of Prussia
NEIMAN MARCUS
Group Manager, Store Operations - Bergdorf Goodman
Permanent · New York
L'OREAL GROUP
Manager - Global Brand Supply Chain
Permanent · Clark
BLOOMINGDALE'S
Business Manager - Dresses, Coats, Swim & Intimate Apparel
Permanent · New York
BLOOMINGDALE'S
Business Manager - Women's International Collections
Permanent · New York
BLOOMINGDALE'S
Business Manager - Fine Jewelry, Women's Shoes, Handbags
Permanent · Chevy Chase
GAP INC
Coordinator, Asset Protection
Permanent · Fishkill
GAP INC
Manager, Transportation Network Strategy
Permanent · Erlanger
GAP INC
Analyst, Finance
Permanent · Albuquerque
NIKE
Art Director, Global – Concepts, Purpose, Athlete
Permanent · Beaverton
NIKE
Global Marketplace Operations Manager
Permanent · Beaverton
GAP
Senior Manager - Digital Product Creation
Permanent · New York
ESTÉE LAUDER
Retail Beauty Business Lead - Estee Lauder - Full-Time - Burnsville, mn
Permanent · Burnsville
TAPESTRY
Product Manager Data Engineering
Permanent · New York
JOCKEY
Full-Time Associate Manager at Jockey - Eagan, mn - $18/HR
Permanent · Eagan
L'OREAL GROUP
Marketing Manager, Global Campaigns - Maybelline Global
Permanent · New York
L'OREAL GROUP
l'Oreal Assistant Vice President, Luxe D2C Media
Permanent · New York
NORDSTROM INC
Asset Protection - Security Ambassador - Manhattan Mens
Permanent · New York
KOHLS
Full-Time Loss Prevention Supervisor
Permanent · Stoughton
By
Reuters API
Published
May 13, 2019
Reading time
3 minutes
Share
Download
Download the article
Print
Click here to print
Text size
aA+ aA-

Asda to rely on Walmart largesse after Sainsbury's dream expires

By
Reuters API
Published
May 13, 2019

Asda will be scrutinised for clues on whether U.S. owner Walmart wants to line it up for sale or to compete longer term in the cut-throat British grocery market when it gives its first trading update since a planned Sainsbury's takeover collapsed.


Analysts have speculated that Walmart will try to sell Asda to private equity or consider a stock market listing for the business it acquired for 6.7 billion pounds in 1999 - Reuters


Britain's competition regulator last month ruled Sainsbury's 7.3 billion pound takeover of rival Asda cannot proceed, closing one exit route for Walmart.

Asda, which accounts for 6 percent of Walmart's turnover, is due to publish a first-quarter update on Thursday, when the world's biggest retailer posts quarterly earnings.

Analysts have speculated that Walmart will try to sell Asda to private equity or consider a stock market listing for the business it acquired for 6.7 billion pounds in 1999.

But a source with direct knowledge of the matter said Walmart is in no rush to make a decision, partly because Asda is performing relatively well under Chief Executive Roger Burnley.

Asda has reported seven consecutive quarters of like-for-like sales growth, thanks to a strategy focussed on lower prices, more innovation in own-brand products, better store standards and improvements in its e-commerce operations.

A read across from monthly industry data produced by researcher Kantar indicates that Asda will likely report an eighth straight quarter of growth.

Walmart has been focussed on turning around its international business by targeting higher growth markets such as China and India and exiting or tying up with local players elsewhere.

When the Sainsbury's deal was blocked on April 25 Judith McKenna, CEO of Walmart International, said its focus was on "continuing to position Asda as a strong UK retailer".

Walmart "will ensure Asda has the resources it needs to achieve that," McKenna added at the time.

PROFIT RELIEF

Burnley, like his predecessor Sean Clarke, has benefited from Walmart's 2016 decision to relax profit demands of around 1 billion pounds on Asda, allowing it to cut prices and stem the loss of market share to German-owned discounters Aldi and Lidl.

That strategy shift meant Asda's operating profit fell 13% to 735.4 million pounds in 2017, its latest published accounts.

"The issue for Asda is what is Walmart going to tell it what its profit target is," a senior industry executive said.

"If Walmart says 'we would like you to go back to the profitability you had three years ago', then Asda can't execute their current strategy. It's not designed to deliver that level of profit," he said.

Another source with connections to Asda said that scenario would mean Burnley having to take out unprofitable, or barely profitable, stores, and cut staff numbers.
"But I suspect they'll allow the tap to stay on ... because that makes it more attractive for (a future) sale."

While Sainsbury's CEO Mike Coupe, the main architect of the deal, has been heavily criticised for its failure, Burnley has emerged relatively unscathed.

With the exception of one bruising appearance in front of a lawmakers in June, Burnley has kept a low public profile since the deal was announced, which insiders say partly reflected his ambivalence towards it.
 

© Thomson Reuters 2021 All rights reserved.