LVMH seeks to exit Tiffany deal
French luxury goods group LVMH has dropped its plan to take over Tiffany & Co, as the iconic New York jeweller’s share price has dropped significantly below the agreed price.
Tiffany & Co, however, is said to be filing a lawsuit with the Delaware Court of Chancery seeking to force LVMH to close the transaction by the November deadline, the Financial Timesreports.
LVMH is using geopolitical and taxation factors rather than price to defend its position, with the board issuing a brief statement confirming it would not be able to complete the acquisition due to “the threat of taxes on French products by the US”.
Tiffany & Co meanwhile, is alleging that LVMH has deliberately stalled the takeover to force a renegotiation of the price.
Reuters earlier reported that LVMH CEO Bernard Arnault was exploring ways to reopen negotiations in an attempt to reduce the price as he still believes in the deal’s “strategic rationale”.
According to Reuters, Tiffany will give LVMH a bigger share of the lucrative US market and expand its offerings in jewellery, the fastest-growing sector in the luxury goods industry.
Vietnamese, Argentinean designers celebrated
The Redress Design Award 2020 Grand Final saw awards presented to menswear designer Le Ngoc Ha Thu from Vietnam and women’s wear designer Juliana Garcia Bello of Argentina, who won design collaboration prizes with VF Corporation’s Timberland and upcycling brand The R Collective, respectively.
A runner-up award was given to Sri Lankan designer Ruth Weerasinghe and the award for best Hong Kong designer went to Grace Lant. Redress is an environmental charity with a mission to prevent and transform textile waste to catalyse a circular economy and reduce fashion’s water, chemical and carbon footprints. It was founded in Hong Kong in 2007 by Christina Dean.
The competition cycle was sponsored by local government body Create Hong Kong. The issue of waste in the fashion industry has intensified under the impact of the coronavirus pandemic as retail and supply chain disruptions have stranded materials in warehouses, factories and stores globally, Dean said.
White knights to rescue JC Penney
US mall owners Simon Property Group and Brookfield Property Partners have stepped in with a US$800 million ($1.1 billion) deal to rescue the embattled department store chain JC Penney from bankruptcy, CNBC reports.
The deal would allow the retailer to avoid total liquidation and would save about 70,000 jobs and 650 stores. It is subject to the approval of the bankruptcy court and any competing bids.
Hit hard by the coronavirus pandemic and burdened by debt, Penney filed for Chapter 11 bankruptcy protection in May. It had nearly 850 locations at the time.
As part of the pending deal, Wells Fargo has agreed to give Penney US$2 billion in revolving credit once the transaction is completed, leaving the retailer with US$1 billion in cash. Penney plans to seek approval from the bankruptcy judge for this rescue deal early next month.
Meanwhile, the hedge funds and private equity firms that have financed Penney’s bankruptcy are set to take ownership of some stores and the retailer’s distribution centres in exchange for forgiving some of its US$5 billion debt load.
Burger King to go ‘touchless’
In response to the challenges of the pandemic and in anticipation of a “new normal”, US hamburger chain Burger King has unveiled a new “touchless” concept store.
Designed in-house, the store is expected to provide multiple ordering and delivery modes and have a physical footprint 60 per cent smaller than a traditional Burger King restaurant.
To reduce its physical footprint, the store features a “suspended” kitchen and dining room located above the drive-through lanes. Orders will be delivered from the suspended kitchen by a conveyor belt system, and each lane has its own pick-up spot.
“The designs we’ve created completely integrate restaurant functionality and technology,” said Rapha Abreu, global head of design at Restaurant Brands International. “We designed the interior and exterior spaces like we had a blank sheet of paper, designing without preconceived notions of how a Burger King restaurant should look.”
Burger King’s first new design stores will be built next year in Miami, Latin America and the Caribbean.
H&M unit moves into sustainability
Swedish multinational fast fashion retailer H&M has announced that its subsidiary Cos have taken a step towards greater sustainability, launching a pre-owned fashion platform called Resell, which allows customers to buy and sell their used Cos pieces.
“Resell reinforces Cos’s ambition and journey to becoming fully circular and renewable, developing innovative ways to continue the brand’s commitment to quality and longevity by reimaging the lifecycle of each pre-loved piece,” H&M said.
The digital platform is now available in the UK and Germany and will go global this northern autumn.
This story appears in the August 16, 2020, issue of Inside Retail Weekly.