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Brand CEO Alan Green with Zak Mir on TipTV – Prospects for 2017 – Reasons to be Cheerful
Brand CEO Alan Green with Zak Mir on TipTV – Prospects for 2017 – Reasons to be Cheerful, plus stocks including Marks & Spencer (MKS) and IG Group (IGG). Link here
Brand CEO Alan Green discusses a range of topics MKS, ASOS & TYM with Zak Mir on TipTV
The opening segment of today’s London open show has Alan Green, CEO of Brand Communications and Tip TV’s Zak Mir discuss broad range of topics, from risk-on appetite in the markets to UK politics, Japanese stimulus talk and its implications on the financial markets. Green also discusses his stock picks – ASOS (ASC), Marks & Spencer (MKS) and Tertiary Minerals (TYM) – and presents technical and fundamental rationale for the same. The show concludes with a look at Broker forecasts.
Warmest For Over 350 Years and Bonmarche Blames The Cold
Bonmarche BON. Lame excuses from the CEO of Bonmarche as he blames the cold winter weather for a poor 4th quarter performance. Figures released today show that the winter of 2016 will have been the warmest for over 350 years, so pull the other one Mr. Butterwick.
The year got off to a good start with the January sales but then February and March became challenging because of this alleged cold winter, which the company says was unhelpful in kick starting real demand for its spring products.
Winters should be cold. We wrap up for them. They occur in January, February and the first 3 weeks of March – every year.
Like for like sales rose by 0.5% in quarter 4 (i.e. to the 26th March) and by 1% for the full year, whilst total sales for the year were up by 5.3%.
Lack of consumer confidence also affected the company’s performance and profits are expected to be at the lower end of guidance. It is not going to get any better either, with 2017 looking to be challenging and the outlook cautious. One wonders, if they are reduced to making excuses which just don’t wash, should they not be taking a look at their product range or their management.
Marks & Spencer MKS is at last going back to its roots and waking up to the fact that the number crunchers who run great swathes of British industry and commerce are not really fit for purpose. If we had relied on the number crunchers there would never have been an M&S, a Morrisons, Tesco, BHS, Premier Foods or a Sainsbury. Most of the High street was created by men with their feet on the ground and fire in their bellies, men who understood what the public wanted and gave it to them at prices they could afford.
The number crunchers have ensured that we do not have a single supermarket which can compete with Lidl or Aldi because not one of them has ever had to sell, sew or bake anything to earn a living.
The first sign of rebellion has come from Marks, whose new chief Exec. started with the company as a Saturday boy and has been with it ever since.
He has not only thought the unthinkable but has actually had the courage to say it – Marks performance in clothing is unacceptable – and he is going to do something about it.
Marks decline started with the introduction of food departments, many, many years ago but it was and always has been primarily a clothing store, where quality and price and the customer came first. It looks like Marks may once again and at long last be being run by a shopkeeper. Long may he reign.
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Retailers Part 2 – Shedding A Little Light on M&S
It is on the borders that the first signs usually appear of an empire starting to collapse. Thus Nero’s fiddling and pyromanics were the forerunners of Goths,Visigoths and other alien tribes hacking away at the denuded borders of the once great Roman empire. The same applies to giant supermarkets. Once head office has lost the plot it shows on the peripheries of the business, which brings us to Marks & Spencer.
M&S has had an on and off presence in Greece for more than 20 years, sometimes with a food department, sometimes without. It was once one of the few establishments where ex pats could buy a taste of home. But what was its main product on display. Shelf after shelf of bottled water. Greece is awash with numerous brands of bottled water and here is M&S bringing it all the way from England to take up valuable shelf space, on which items with a far greater profit could be displayed. Not surprisingly M&S suddenly closed its food departments, virtually overnight.
On the basis of once bitten it wont hurt as much the second time, they eventually decided to reopen food sections and to do so in time for Xmas. The fitting out took place, the shelves were stocked and the areas were roped off pending the big opening day. They remained roped off, potential customers came in droves believing that they must have opened but they hadn’t and didn’t. Eventually it was admitted that they had forgotten to apply for any of the licences required for a food shop. The ropes remained, the stock and the shelving and the displays were removed and the fish and chips, steak pies and cumberland sausage were quickly replaced with fancy ladies underwear. The expats were the same but with a slightly different leer.
Now they have done it again, for a third time, about two years ago or so. One of the new foodstores was a closed down former BHS store, which should have been warning enough to the ivory towers of head office. New freezer cabinets were installed, all very posh with bow fronts, but there was one big difficulty. The only place to display price labels was underneath the bow fronts, facing the floor, instead of the customer. If you wanted to know the price of anything in the stores main freezer display you had either to bend down and peer up at the bottom of the bow front or for comfort, actually kneel down on the floor which would bring your head to just about the right height for reading the label.
A small thing you may say but it is not. It is a sign of a company with a big problem because M&S would have paid out a fortune in consultants and designers fees to create a useless freezer display. What is more, the management of M&S were so divorced from reality and their customers needs, that the displays are still being used. Presumably management could not be bothered to check the store after or before it opened. After all you cant expect a head office man to go down on his hands and knees. That sort of thing is for customers only.
At the same store the staffing arrangements are that one man covers the little coffee bar next to the check out counter and makes the coffees and in between doing that, when he has time, he operates the till and serves the customers. The rest of the staff are engaged to talk to each other and supervise the stock on the shelves. Occasionally they put these onerous duties on one side and start operating a check out The store is not busy. Presumably M&S will be wondering why. The customers know why.
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Who Bemoans The So Called Strength Of Sterling
Well Marc Bolland CEO of Marks & Spencer MKS does
In fact, he was forced in yesterdays half year results to go for every excuse in the desperate CEO’s Excuses Handbook.Group half year sales were up by a miserable 1.4%. Like for like food sales were down. Like for like general merchandise sales were even more down. The first response was to dole out sweeties to the shareholders – in this case a dividend increase of 6.3%
The strength of sterling is of course the favourite for all those CEOs who have no shame and dare not admit the real reasons for their company’s poor performance.
What else does Bolland go for – he tritely trips out a list of what impacted his company;
Unseasonable conditions impacted performance. “The wrong leaves” attitude
Performance was significantly impacted by adverse movements in the Euro exchange rate..
Macro economic conditions continued to impact performance in the Middle East
No mention is made of Bolland or the directors impacting the company.
“The strength of sterling” is not only a platitude it is completely untrue. In 1992 the pound stood at 2.81 to the Euro so in 23 years it has halved in value. Even over the last nine years it is down by 6%. And Bolland sees these as signs of strength. That explains a lot as to why Marks and many other British companies have been knocked off their pedastals.
Against the US dollar the fall has been even more devastating. Some 70 years ago the pound was worth $4. Today it now worth $1.53. That is 70 years of unremitting decline, decade after decade.
The truth is that a strong currency is the result of a strong economy, created by a country’s strong industry and commerce.
In the decades when the Deutschmark ruled the world and was the worlds strongest currency, did German industrialists ever bemoan the impact it was having on the German economy. Of course not. They were proud of the strength of the Deutschmark because they recognised it as the product of a strong German economy.
What is it with Bolland and his ilk that they seem to be incapable of recognising the truth about sterling and its long term weakness. If more British CEOs and company directors knew their job, they too could be proud of a strong pound.
And its not just Bolland making these fatuous excuses. They are trotted out everyday. Today it is the turn of Shanks SKS. Tomorrow it will be another household name trying to shift the blame for its poor performance, away from its Board and its CEO.
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