Partner Article

Zolfo Cooper analyses this week’s significant results

Dan Coen, director at advisory and restructuring firm Zolfo Cooper, comments on the retail industry and some recent high profile retail results:

Amazon

“While Amazon’s results are superficially disappointing, we believe they reflect the effects of its long term growth strategy. Amazon’s revenue growth has slowed in the first quarter, but the internet giant’s move into areas beyond retail has helped increase profitability.

Its margins jumped on lower shipping expenses and the expansion of more profitable new businesses. Also, increasing sales of digital content helped boost the retailer’s revenue in the first three months of the year. With its new TV venture, Amazon is clearly not afraid to step outside its comfort zone and be more than just an online retailer.“

Sports Direct

“Sports Direct is going from strength to strength with today’s results setting a shining example for others to follow.

Having recently acquired Republic, and rumours circulating on other high profile acquisitions, the retailer certainly understands the importance of diversifying its business. Strategic acquisitions like these have transformed Sports Direct from a sportswear retailer into a strong multi-brand group.

Sports Direct knows when to take action against poorly performing stores – shown by its recent decision to shut down some Republic and JJB shops. Whilst these are difficult decisions to make, the retailers who are prepared to take decisive action to deal with underperforming stores will ultimately come out on top.“

Primark

“Primark’s stellar success flies in the face of conventional wisdom. Whilst the rest of the retail world is obsessing over online selling and multichannel strategies, Primark is powering ahead despite it having no online business at all.

The retailer’s success is a refreshing change from the rest of the retail world. At a time where the cold weather has put a strain on the high street, Primark is going from strength to strength bringing in cash-strapped customers looking for discounts.

Primark has become far more fashion-orientated, with fast-turning stock and reflecting the latest fashion trends. The retailer has therefore been able to provide low-cost fast fashion at a time when most consumers are keeping a watchful eye on their spending.“

This was posted in Bdaily's Members' News section by Zolfo Cooper .