trade M
O
N
T
H
L
Y
Trump Win ‘Good News for US-UK Traders’ Says ParcelHero
December 2016
Trump Victory Increases Mexican Economic Uncertainty
Brexit, Trump, Marine Le Pen? Matthew Phillips, wealth Management managing director at Thomas Miller Investment, comments on what to expect in a Trump era.
Also in this issue... London Remains ‘Most Popular European City’ for Institutional Real Estate Investors - Money Woes Are Keeping Half the Nation Awake at Night. Plus much more...
06
10
18
12 14
22
20 24
Trade Monthly December 2016
Contents 04
Deals
News
Retail
10
Finance
12
Finance
H&M Store Will Open in Galleria Tbilisi Mall in 2017
Retail
SPLIO Announces €10 Million Fundraising and Pursues the Development of the First SaaS-Based CEM Platform for the Retail Sector
Retail
14
The next Stage of a Global Ginza - ‘GINZA SIX’ Will Be Born in April 2017
26 18
Cass Publishes Innovative Research into Chinese M&A Market
20
Fiscal Stimulus and Inflationary Growth
Finance
22
London Remains ‘Most Popular European City’ for Institutional Real Estate Investors, but German Cities Dominate Leaderboard
Finance
24
A Note from the editor... Welcome to the very first edition of Trade Monthly, which brings you the latest news, deals, information and comment from across the global retail and wholesale market. Trade Monthly is the go-to resource for everyone working in this dynamic and innovative industry. Featuring the very latest comment and up to the minute news and deal information, this is more than just a magazine; Trade Monthly is an information platform, distributing a monthly newsletter with all the latest updates, providing a detailed and easy to navigate website as well as awards programmes designed to recognise and reward the very best businesses from across the industry. Bought to you by leading corporate publishing house AI Global Media, Trade Monthly features contributions and comment from some of the industry’s leading experts, commentators and innovators, and is read by the top CEOs, executives and professionals from across the market and around the world. Offering an unrivalled global reach, Trade Monthly provides discerning readers with the very latest up to the minute news, insight and comment on the retail and wholesale market. I trust you enjoy reading this first edition, and that you will join us for many more of the same in the future. Jonathan Miles
Money Woes Are Keeping Half the Nation Awake at Night
Page 3
News
Trenitalia Meets Travel Trade Operators This year too, for the fourth year in a row, Trenitalia has organised an event dedicated to the trade abroad at the World Trade Market in London: over 100 travel agents, tour operators, GDS and representatives of the main railway companies in Europe have joined the event in order to know more about the brand news for 2017 and the new business opportunities.
Trenitalia has also shown its new advertising spot: “Frecciarossa, when you travel well, it shows”, that clearly underlines all the strength points of its flagship product: extreme comfort, high-level services and an extensive network of fast and frequent connections. Over 90 High-Speed trains per day between Rome and Milan linking in just 2 hours and 55 minutes, at the speed of 300 km/h, Italy’s institutional capital to the economic one, and a super train, the Frecciarossa 1000, capable of reaching a top speed of 400 km/h and a commercial speed of 350 km/h. These are the main cards of Trenitalia, Ferrovie dello Stato Italiane Group’s company that manages the Italian passenger transport business. Founded in 2000, enriched by 150 year of FS’s experience, Trenitalia is one of the first rail operators in Europe: it runs every day more than 7,000 trains, carrying more than half a billion travellers each year. It also has a strong international vocation, as confirmed by the numerous trade agreements throughout Europe, the acquisition of shares of foreign operators (such as Netinera in Germany, Thello in France) and the tickets sales increase in Europe and all over the world. FS Group is also present in Greece, after the acquisition of Trainose, the leading hellenic transportation company, while Trenitalia is trying to export its know-how in HS services in other foreign markets: in UK, for instance, Trenitalia has been the first not-UKbased company to obtain the PPQ passport and it is strongly committed to take part at the future bids of Railway Franchise Programme of Department of Transport. The train, especially since the advent of High Speed, has become the main mean of transportation to move between the biggest Italian cities, surpassing even the portion of the plane on the Rome - Milan, the busiest route. Arrows (‘Frecce’ in Italian) are the flagship trains in Trenitalia’s fleet: • Frecciarossa, high-speed trains linking at 300 km/h the
www.trade-monthly.com
Trade Monthly December 2016
•
•
main cities of the country (Turin - Milan - Bologna - Florence - Rome - Naples - Salerno) with a 15 minutes’ frequency during peak hours. On Frecciarossa passengers can choose between four different levels of service, depending on their needs: the Executive level for a unique travel experience; Business, the ideal travelling for business or pleasure; Premium, for a journey full of comfort; Standard for High-Speed low cost. All Frecciarossa also have a meeting room for business meetings, a Silence Area and two sitting areas with four seats each. Aboard, a welcome drink and Wi-fi. It takes 37 minutes to get from Florence to Bologna, 70 minutes from Rome to Naples, 43 minutes between Turin and Milan, an hour and 45 minutes from Milan to Florence. Frecciargento trains run through both the High Speed/ High Capacity and conventional lines traveling up to 250 km/h, with links that shorten the distance between Rome and the biggest metropolitan cities of the North-East (Venice, Padua, Verona, Trento, Bolzano) and the south of the country (Bari, Lecce, Reggio Calabria). The Frecciargento trains, such as Frecciarossa, have a dining car accessible to all travellers and a free WiFi at the moment available on a part of the fleet. It takes 3 hours to go from Rome to Venice, 5 hours between the Capital and Reggio Calabria. Frecciabianca trains, circulating on conventional lines, outside the High-Speed network, ensure comfort and quality services. These trains link centres of medium and large size. Thus, in 4 hours you can move from Genoa to Rome, passing through the Versilia, while from Milan it takes 2 hours and 27 minutes to get to Venice and 3 hours to the Adriatic Riviera.
National connections are also ensured by Intercity, night trains and Regional trains. Among the most interesting services offered by Trenitalia is also worth mentioning Thello, that connects Milano to Nizza/ Marsiglia and, every night, Venice
and Milan with Paris, offering a wide choice of sleepers. Venice and Milan are also well connected with Switzerland: everyday there are 32 connections with major swiss cities, that will benefit a reduction of travel time due to Gotthard tunnel opening (-30 minutes Milan – Zurich, - 20 minutes Milan – Lucerne). From the commercial point of view, there are many promotions reserved for travellers Trenitalia: in addition to ordinary prices (Base, Super Economy and Economy) there are lots of discounts, for example, if you are traveling in a group, with your family or if you go and come back in the same day. Moreover, Trenitalia’s customers can enjoy an even more comfortable and easy journey thanks to a wide range of ancillary services offered by Trenitalia’s partners: door to door luggage shipping, porter service, car rental, car sharing and parking are just some of them. Trenitalia is working to make these services available for purchase in just one easy travel solution train + service.
The train, especially since the advent of High Speed, has become the main mean of transportation to move between the biggest Italian cities.
Political Issues Involving the Nickel Ore Trade Peter Modev, senior loss prevention executive at UK P&I Club, and the Club’s local correspondent (Pandiman Philippines) provide an update on the risks in transporting nickel ore from the Philippines. “Nickel ore cargo originates principally in the Southern region of the Philippines, where it is loaded at Mindanao, but loading areas are private enterprises and at present shippers/mines are not allowing any access to these facilities. “It is difficult for foreign experts to currently travel to the area, as most Embassies have strict travel warnings about going to the region. There are numerous terrorist groups operating in the area, with bombings and kidnappings and the death of one Canadian mine manager, while Philippine military forces are at war with several factions. “The Foreign and Commonwealth Office (FCO) advises against all travel to south-west Mindanao and the Sulu archipelago because of ongoing terrorist activity and clashes between the military and insurgent groups. The FCO also advises against all but essential travel to the remainder of Mindanao for the same reasons.
“As a result of this unrest, the Philippines government has declared a ‘state of national emergency on account of lawless violence in Mindanao’ so anyone who does need to visit the area should expect heightened security measures at airports and other major transport hubs, and should co-operate with the Philippine authorities and allow extra time to pass through security. “A further significant issue in the region has been Philippine Government’s decision to suspend export licences for nickel ore mines, due to environmental issues. In a recent statement, the government declared: ‘We have had mining in this country for over 100 years and until now we don’t even have one rehabilitated mine, just gaping holes, destroyed rivers and children with brain disease’.”
www.ukpandi.com www.thomasmiller.com
“A bomb attack on a market in Davao City, Mindanao, killed more than a dozen people on 2nd September 2016. The FCO already advises against all but essential travel to eastern Mindanao, including Davao City, and against all travel to the rest of Mindanao.
Page 5
News
Brexit - Trump - Marine Le Pen??? Matthew Phillips, wealth Management managing director at Thomas Miller Investment, comments on what to expect in a Trump era.
“The Trump presidency represents a further step into the unknown after the surprise of Brexit. Voters in both countries have clearly rejected the status quo to vote for change. In respect of President Elect Trump, it has to be said that he is long on rhetoric and potentially short on detail. This makes planning and positioning difficult. “In many ways Trump’s election is the second act in a piece that started with Brexit. Brexit represented a rejection of the status quo by the British electorate. Trumps ‘Brexit plus plus plus’ as he called it, is the second act. Maybe the third is Marine le Pen being elected the President of the Fifth French Republic, with obvious consequences for the remaining EU. “While Trump has not detailed exactly how he will carry out some of his pledges, he has been clear on what he believes and his general stance. From this we can infer certain things. Trump has been clear that he wants to protect American jobs and bring back manufacturing to the US. This is a challenge to the mantra of globalisation and ‘free trade’ that has held sway over global trade and economic policy makers for the last 40 years or so. “Those who champion globalisation would say this will introduce unnecessary costs into the global market, potentially stoke inflation and lead to inefficiency as capital is not deployed globally in the best manner.
www.trade-monthly.com
Trade Monthly December 2016
“However, the demographic that voted for Trump do not seem to have benefitted from globalisation. We have been talking about the ‘elephant graph’ (below) for a little while now. It shows that between 1988 and 2008, the world’s poorest remained poor. Income growth was strongest among global middle income earners, predominantly represented by the Asian and, in particular, Chinese middle class. “The globes richest have also got richer. The dip in the trunk represents working and lower middle class workers in Western economies. These people are predominantly white men. They have seen manufacturing jobs being lost to cheaper labour in the developing world. It is also likely that these positions have become more exaggerated as the financial crisis deepened after 2008. “A more robust American economic policy would target emerging markets in particular, penalising cheaper manufactured goods made outside of the US in order to encourage consumption of US made goods. Expect to see a rejection of current free trade deals and potentially other treaties such as climate change treaties, which Trump sees as ramping up costs of American goods.
“In order to boost jobs and domestic employment, Trump is going to spend on infrastructure and given what he has said in terms of foreign affairs, he is likely to spend more money on defence, the majority of which will be spent in the US.”
thomasmiller.com tminvestment.com
Brexit represented a rejection of the status quo by the British electorate. Trumps ‘Brexit plus plus plus’ as he called it, is the second act.
Trump Victory Increases Mexican Economic Uncertainty Donald Trump’s victory in the US presidential election increases economic uncertainty for Mexico and may add downside risks to economic growth, Fitch Rating says. During the campaign, President-elect Trump made statements supporting increased trade protectionism (including the potential renegotiation or termination of the North American Free Trade Agreement, or NAFTA), the blocking of workers’ remittances, and building a wall along the US-Mexico border. The likelihood and feasibility of pursuing these policies is unclear. But the advent of a Trump administration increases economic uncertainty in Mexico given its very close economic ties to the US. These ties have increased significantly since the adoption of NAFTA in 1994. Mexico sends just over 80% of its exports to the US, which is also the leading provider of foreign direct investment inflows to Mexico (FDI inflows reached 2.5% of GDP in 2015). Mexico receives around 2% of GDP in annual workers’ remittances, also predominantly from the US. Any hit to exports and remittances is likely to widen Mexico’s moderate (2.8% of GDP in 2015) current account deficit. Weakness in the US industrial sector has already been felt in Mexico this year, with non-oil manufacturing exports contracting by 2.4% during January-September. In our September global economic outlook, Fitch cut Mexico’s 2016 growth forecast to 2% from 2.4% reflecting the economic weakness in 2Q16. We forecast 2.6% growth next year, but the US election result would put this at risk if it hurt domestic confidence and delayed investment until greater clarity emerges on the new administration’s stance towards Mexico.
* Sourced from The World Bank – Global Income Distribution paper, December 2013
The election campaign caused peso volatility and this looks set to
continue. The currency has depreciated and further weakening is possible. During the year, Mexico has addressed the potential impact of financial market volatility. The Bank of Mexico has increased rates by 150bp so far this year, including a 50bp increase in September. The authorities have also increased its two-year IMF Flexible Credit Line by around $21bn to $88bn. This provides a buffer against disorderly capital outflows and severe market volatility. To support investor confidence, the government is targeting a public sector primary surplus of 0.4% of GDP for 2017, the first such surplus since 2008. Next year’s external sovereign debt repayments have also been pre-financed. We affirmed Mexico’s ‘BBB+’/Stable sovereign rating in July. As we noted at the time, deterioration in the economic, trade and financial links with the US would weigh on Mexico’s sovereign credit profile. We will monitor how these risks evolve; the effectiveness of the authorities’ policy response; and the implications for Mexico’s growth, public finances and debt trajectory, and external accounts. Weak growth performance and worsening of government debt dynamics would be negative for Mexico’s ratings. The above story originally appeared as a post on the Fitch Wire credit market commentary page. The original article can be accessed at www. fitchratings.com. All opinions expressed are those of Fitch Ratings.
Page 7
News
Close Brothers Casts a Spotlight on Late Payments to SMEs • Over a third of SMEs hit by late paying customers; • Government needs tackle UK’s late payments culture and; • SMEs urged to take back control of payments.
www.trade-monthly.com
Trade Monthly December 2016
Government efforts to tackle the UK’s late payments culture have so far failed to protect hundreds of thousands of small and medium-sized enterprises (SMEs) from exploitative customers who fail to pay their bills on time, Close Brothers Invoice Finance warned. The Close Brothers Business Barometer, the quarterly survey of SME sentiment on a broad range of issues, reveals that more than a third of firms are still suffering with a major payment delay problem.
the problem is escalating in some industries, stifling growth and even leading to business failure.
Successive governments have sought to tackle the issue through a variety of initiatives, including the Prompt Payment Code, which has seen more than 1,800 firms sign up to commitments such as a promise to pay invoices within 30 days. However, Close Brothers’ data shows 34% of all SMEs still see overdue invoices as a problem for their business – almost a fifth of these firms (17%) warn the issue is seriously affecting their ability to trade.
“SMEs need better statutory protection and an independent champion prepared to take action on their behalf,” David Thomson added. “Many SMEs feel very uncomfortable challenging larger businesses, on which they may be reliant for substantial amounts of revenue, over late payments; this is where regulatory action is essential.”
Close Brothers’ research suggests delayed payments are causing major cash flow headaches for large numbers of SMEs and adding costs to their businesses as they waste time and money chasing overdue invoices. Almost two-thirds of SMEs (60%) spend at least a day a month chasing payments that should already have been made. David Thomson, CEO of Close Brothers Invoice Finance, said SMEs needed better protection from government and regulators. “The UK’s record on late payments is very poor – while other countries have seen late payment rates come down as their economic fortunes have improved, the UK’s business culture seems to be one in which it is acceptable not to pay SMEs on time,” he said. “SMEs often lack the power to hold large organisations to account and need greater support from government to help them do so.” Close Brothers’ research mirrors other assessments of the UK’s late payments problem. A series of reports and surveys in recent months have highlighted the issue, with organisations such as the Asset Based Finance Association warning
SMEs are eagerly awaiting details of the Government proposal to set up a Small Business Commissioner, which could be given powers to intervene in disputes between SMEs and larger organisations over payments. However, it remains unclear exactly how the scheme will work and to what extent large businesses will be required to participate; the Prompt Payments Code, for example, is a voluntary standard.
Mr Thomson also urged SMEs to take action wherever possible. “It’s crucial that SMEs try to grip this issue themselves,” he said. “You need to be crystal clear about your payment terms at every stage of your dealings with customers – and to chase invoices the moment they become due; consider credit checks on new customers and don’t accept poor practices from your existing customers.” Further information on Close Brothers Invoice Finance is available at www.closeinvoice.co.uk
SMEs need better statutory protection and an independent champion prepared to take action on their behalf.
Trump Win ‘Good News for US-UK Traders’ Says ParcelHero When the music finally stops on trade negotiations, UK may well have better deal than the EU, says UKUS export specialist. ParcelHero, an international courier specialising in UK-US deliveries, says Trump’s remarkable victory could be very good news for UK businesses that trade regularly with the US. Says ParcelHero’s Head of Consumer Relations, David Jinks MILT, ‘There are two reasons Trump’s triumph is positive for UK-US traders. One is short term as the dollar wobbles; and the other long term as USEU TTIP free trade negotiations collapse and post-Brexit Britain strikes an independent deal with the US.’ David Jinks believes that in the short term: • Any immediate fall in the dollar means US-made products are a more attractive buy. • Purchases made from China through Alibaba are in US dollars. Alibaba is a key source of wholesale products for many UK importers. This means the price of Chinese imports through Alibaba will fall – just in time for the Singles Day sales (this Friday, 11/11): the biggest shopping day in the world. UK importers will be able to buy cheap and pass on savings when they resell on Black Friday/Cyber Monday. In the long term: • The proposed Transatlantic Trade and Investment Partnership (TTIP) between the US and EU, supported by Hilary Clinton initially, would have effectively been a Free Trade Agreement between the two blocs and abolished tariffs and delays at US Customs. Trump is clearly against any such free trade agreements. Instead he will look to strike separate deals with different trading blocs while protecting some US industries and businesses. • Trump has gone on record in saying the UK will certainly not be
‘at the back of the queue’ when it comes to trade deals with the US. He made these comments back in May following Obama’s threat Britain would go to the back of the trade negotiation queue if we voted to leave the EU. And Trump’s trade advisor Dan DiMicco has recently stated Britain would be a higher priority for a deal than the EU. “Why shouldn’t we be working with like-minded people before we do a deal with anybody else?” he asked. • Currently tariffs between the EU including Britain and the USA are all over the place and need sorting out. For example, we pay a 10% duty on US made cars; whereas US citizens pay 2.5% duties on EU-built cars. Imagine a situation where the UK (post Brexit) and US strike a deal that removes duties; but the US drags its heals doing the same with the EU. A US-build Jeep, for example, would be 10% cheaper here than in the EU; and a UK-built £50,000 Jaguar would be over £1000 cheaper to buy in the US than an equivalently priced EU-built Mercedes. That will boost UK exports. • ParcelHero is a member of the Government’s Exporting is GREAT initiative, and we’ve already seen a marked increase in shipments to the USA this year – probably to exploit the new US Duty threshold which increased this year from $200 to $800. Perhaps contrary to all expectations, US-UK trade could enter a new special relationship under Trump post Brexit. For more information on UK-US exports see: https://www.parcelhero.com/en-gb/international-courier-services/usa-parcel-delivery
Page 9
Retail
H&M Store Will Open in Galleria Tbilisi Mall in 2017
www.trade-monthly.com
Trade Monthly December 2016
GEORGIAN CO-INVESTMENT FUND'S SUBSIDIARY TBILISI PLAZA LLC AND H&M (HENNES & MAURITZ AB), ONE OF THE WORLD'S LARGEST FASHION RETAILERS FAMOUS FOR OFFERING FASHION-FORWARD APPAREL AT AFFORDABLE PRICES IN A SUSTAINABLE WAY, SIGNED AN AGREEMENT UNDER WHICH H&M WILL OPEN A STORE IN GALLERIA TBILISI MALL IN 2017.
Galleria Tbilisi is one of Georgian Co-Investment Fund’songoing investment projects in hospitality and real estate sector, with a total investment size of US$80M. The main construction works are underway and the grand opening of the mall is scheduled for September 2017.
The design of the project was created by leading Israeli architect firm, ‘Moshe Zur Architects’, which has completed a range of impressive architectural developments including shopping centres in Europe’s capital cities. With its blend of classic and contemporary styles and exceptional construction quality Galleria Tbilisi will become a new landmark of the city.
H&M is the first retailer with which an agreement was reached. In order to make Galleria Tbilisi the most attractive shopping destination for the visitors, GCF and Tbilisi Plaza LLC will continue working on attracting more new retailers to Georgian market, offering them an opportunity to establish presence in one of the city’s most exclusive shopping districts. With this aim, Galleria Tbilisi will be presented at the world’s most prestigious international retail property annual exhibition MAPIC 2016 in Cannes for the second consecutive year.
Galleria Tbilisi will be a distinctive shopping centre in many ways. The unique development is designed around Tbilisi’s two renowned theatres, the ‘Liberty Theater’ and ‘A. Griboedov Russian Drama Theatre’ which will be integrated within the mall structure, making the centre even more appealing destination for its visitors. The mall is also linked to the Metro Station ‘Freedom Square’ granting metro commuters direct access to the shopping centre. Galleria Tbilisi gross leasable area is 22,000m² featuring 5 levels of retail space and a food court. The building will have an underground car park area with capacity of 300 parking spaces.
About Galleria Tbilisi Galleria Tbilisi project envisages development of a modern, multifunctional shopping centre on Tbilisi’s prime high street, Rustaveli Avenue, in the heart of the capital city. Centrally located near the most important government and private institutions, museums and theatres, ‘Galleria Tbilisi’ will be the best shopping location in Georgia. The shopping centre is easily accessible for its visitors via number of public transportation and pedestrian access points. Its catchment area within 20 minutes’ drive is approximately 1,000,000 residents.
The unique development is designed around Tbilisi’s two renowned theatres, the ‘Liberty Theater’ and ‘A. Griboedov Russian Drama Theatre’
cafés, providing the widest choice of dining options in the city centre. In addition, there will be a terrace with magnificent views over Tbilisi which will also serve as a venue for organizing special events. With the unique brand mix, wide choice of dining options, event spaces, two theatres and a terrace with stunning views of historical part of the capital city, Galleria Tbilisi will be a new and exciting destination for tourists as well as for the local residents. The grand opening of Galleria Tbilisi is scheduled for September 2017.
www.gcfund.ge
The centre will offer unique shopping experience to its customers. The current design envisages thematic categorization of the shopping levels: a grocery and specialty food store will be located in the basement, a mix of mid and upper-scale fashion, footwear and accessories brands on the ground, first and second floors and children’s wear, home accessories and sporting goods on the third floor. The fourth level of the mall will feature a food court with diverse restaurants and
Page 11
Retail
SPLIO Announces â‚Ź10 Million Fundraising and Pursues the Development of the First SaaS-Based CEM Platform for the Retail Sector
www.trade-monthly.com
Trade Monthly December 2016
SPLIO, the SaaS-based customer experience software company, on 8th November announced a 10 million EUROS fundraising supported by three funds: Digital Ambition Fund (managed by Bpifrance under the Future Investment Program led by the Commissariat-General for investment (CGI), BNP Paribas Developpement and Amundi Private Equity Funds.
Leveraging its relationship with over 500 customers in the retail and luxury goods sectors, SPLIO developed SPRING, the first cloud-based CEM platform dedicated to retailers. The launch of SPRING coincides with a growing necessity for retailers to deliver improved customer experience, in response to increasingly fragmented marketplaces. In the digital era, meeting the needs of customers while the number of touchpoints is increasing and customer journeys are diversifying, has become ever more challenging for retailers. SPRING helps them to overcome these new challenges, by breaking company silos towards a ‘customer-centric’ organisation. Retailers get a holistic view of their customer journeys, in real time, whatever the point of interaction with the brand.
our ambitions and deploy our new platform.” “Obviously, SPLIO comes at the right time, in the right place, with the right offer” added Mireille Messine, CEO of SPLIO. “This increase in capital will enable us to structure SPLIO for growth, strengthen our technological edge and build awareness on our suite, SPRING. Such investments will allow us to quickly acquire a leading position in SaaS-based Customer Experience Management solutions.” “We were impressed by SPLIO’s self-financed development, and longstanding commitment to global expansion as they were able to open sales offices in five different countries, including China” said Delphine Larrandaburu, Investment
15 years of self-funded and profitable development had established SPLIO as a leading player in the field of multi-channel campaign management.
Manager at BNP Paribas Développement. “For us, this is an incredible testament of SPLIO’s quality of execution, and a very good augur for their ability to expand and industrialise their business model in the coming years.” “We are delighted to support SPLIO for the next phases of its development in this highly dynamic sector. We believe that SPLIO has reached critical mass, and that its new SaaS platform, SPRING, will reinforce its position as a key player in the consolidation of this ecosystem.” said Frédéric Lebrun, Investment Manager at Bpifrance.
www.splio.com www.bnpparibasdeveloppement.com www.bpifrance.fr www.amundi-pef.com
In 2015, SPLIO generated a turnover of €16 million. The goal of SPLIO’s new management team, put in place by the founders, will be to capitalise on the company’s existing customer base, its technological lead and excellent time-to-market, to achieve market leadership in the retail segment. Commenting on the announcement, Raphaël Jore, president and co-founder of SPLIO said, “15 years of self-funded and profitable development had established SPLIO as a leading player in the field of multi-channel campaign management. This fundraising will allow us to accelerate our growth, widen
Page 13
Retail
The next Stage of a Global Ginza - ‘GINZA SIX’ Will Be Born in April 2017
www.trade-monthly.com
Trade Monthly December 2016
The 'Ginza 6-chome District 10 Category 1 Urban Redevelopment Project,' which is currently proceeding development targeting construction completion at the end of January 2017, has decided upon the facility name of 'GINZA SIX.' Furthermore, J. Front Retailing Co. Ltd., Mori Building Co., Ltd., L Real Estate, and Sumitomo Corporation have decided upon April 20th 2017 as the grand opening date for the retail facility that will be born from this project. Epic scale and quality born from redevelopment As an area of concentrated commercial activity that incorporates cutting-edge innovation while also continuing Japan’s great tradition and history, the Ginza area is a symbol of Japan. Right in the centre of this one of a kind area, ‘GINZA SIX,’ which at approximately 47,000㎡ boasts the largest area for a retail facility in the Ginza area, will be born. This is not an isolated replacement of the Matsuzakaya Ginza department store: The epic scale produced by redeveloping two blocks, including the surrounding area, will become a world-class commercial space that brings together a wide range of 241 brands in the largest retail facility in Ginza. With a full length (frontage) of approximately 115m facing the Chuo-dori, which is a symbolic main avenue of the Ginza area, there are large 2 to 5–story flagship stores for six world-class luxury brands whose distinctive façades create a new face of the Ginza area. The brand slogan – ‘Where luxury begins, what is the luxury of tomorrow?’ The brand slogan of GINZA SIX is ‘Where Luxury Begins, What the World Wants Next.’ As Japan has developed into a mature society, the concept of luxury does not simply mean expensive or high class, but items and experiences of the highest value that enrich life. For people who want “Life at its Best,” GINZA SIX creates unique spaces and features that can be
found nowhere else in the world and epitomizes the idea of “New Luxury.” Retail Facility 241 stores will open in a 47,000㎡-retail facility, the largest of its kind in the Ginza area. We have curated a line-up of stores that include fashion brands from collections across the world, making it a place where customers can visit to understand the now of Japan and feel the latest world trends. With a full length (frontage) of approximately 115m facing the Chuo-dori, the main avenue of Ginza area, there are large 2-5 story flagship stores for six world-class luxury brands as their flagship stores Floor composition: • B2: Food items • B1: Cosmetics & Beauty • 1-5: Fashion, accessories, lifestyle goods, cafes, etc. • 6: Book store, restaurants, etc. • 13 (part): Restaurants, banquet hall, etc. A store line-up featuring flagship stores that make their presence felt GINZA SIX will have stores from 241 notable brands with the power to send their messages. More than half of these, 122 stores, are flagship stores – stores that provide service of a higher quality than anywhere else, that are faster than anywhere else, and that invest in a richer range of products than anywhere else, and thus occupy a special position with respect to a brand. This is a representation of the vitality of the Ginza area, which attracts
As Japan has developed into a mature society, the concept of luxury does not simply mean expensive or high class, but items and experiences of the highest value that enrich life.
attention from the whole world, and GINZA SIX, which is about to be born there. There are also 81 stores that will be opening in the Ginza area for the first time and 65 stores that will be developing a new business format at GINZA SIX. Precisely because this is an age where goods are bought online, we feel that the tangible space of GINZA SIX, which allows customers to experience unique spaces and services will produce value. Staking the Ginza area’s reputation and the pride of the flagship stores, they can freely display their brand philosophies and worldviews and rise with GINZA SIX to develop and meet various challenges. ‘High quality space design with a story’ by Gwenael Nicolas Interior design of common area in the retail facility is directed by Gwenael Nicolas of Curiosity Inc. To make this huge 47,000 square meter commercial space comfortable for visitors, we have created a space that prioritizes human emotion and physical experience. Inspired by the narrow alleyways that can still be found in Ginza or Kyoto, we are planning to arrange this area to be fun to stroll around. We also studied the lighting effects of shoji screens or andonan oil lampstands, which are the common features of Japanese architecture, to create lighting designed to move through the area like wind. With a priority on creating a high-quality space throughout, we have insisted on using only the finest materials.
Page 15
A Minority-Owned Asset Manager
Tradex Relative Value Fund
Market-Neutral Fixed Income Strategy
Greenwich, CT
www.thetradexgroup.com
Trade Monthly December November 2016
This high quality common area will enhance the appeal of each store. Introducing the first valet parking in the retail facilities in Ginza area For the first time in Ginza retail facilities, GINZA SIX is introducing valet parking (for a fee) which customers are familiar with from hotels and overseas luxury shopping malls. We provide refined and detailed service from the moment we greet you until the moment we see you off. Cultural centre: Kanze Noh Theatre (B3F) This 480-seat, 1,600 square meter theatre will serve as the base for the Kanze school, the largest in Japan’s Noh theatre tradition. The theatre is intended as a beacon of Japanese traditional culture that heightens Ginza’s presence as an international tourist destination. It will also be open to the local community as an event venue. In the event of a disaster, it can serve as temporary accommodation for stranded commuters.
For people who want “Life at its Best,” GINZA SIX creates unique spaces and features that can be found nowhere else in the world and epitomizes the idea of “New Luxury.”
An international hub for commerce and tourism The Tourist Service Center will act as a convenient one-stop location for travellers from Japan and abroad, supplying tourist information and ticketing, currency exchange, de-tax counter, baggage storage, parcel delivery services, and a convenience store that stocks a curated range of souvenirs. The adjoining cafe will also act as a space where travellers can mingle. In addition, a tourist bus station will face onto Mihara Street. The facility will form an international commercial and tourism hub that contributes to the whole Ginza area by offering functions that make it the “gateway to Ginza.”
GINZA SIX Garden (roof garden) Ginza’s largest rooftop garden, a 4,000 square-meter space open to the community. An urban garden that expresses a feeling of closeness to the natural environment, and acts as a haven for leisurely interaction among visitors to Ginza. Seasonal events are also planned. Offices (7-12F/part of 13F) The upper floors of the facility house seven office levels with a total office floor space of around 38,000 square meters. The single-floor rental area (standard floor) is largest in Tokyo, at around 6,100 square meters. With its view down onto Chuo Street and 100-meter-plus floor plate, this top-class office environment will accommodate around 3,000 office workers in the centre of Ginza.
http://ginza6.tokyo/
Page 17
Finance
Cass Publishes Innovative Research into Chinese M&A Market
www.trade-monthly.com
Trade Monthly December 2016
New research reveals Chinese M&A into the UK hits a record high with greater returns going to private acquisitions and smaller deals. The research focuses on cross-border acquisitions from China to the UK during the period 2012, when Chinese companies began making frequent acquisitions in the UK, to mid-2016 and is the first of its kind.
With the growth of Chinese outbound M&A activities and their foreign direct investment (FDI) becoming increasingly important to the world’s economy, the research is both timely and useful in examining whether these investments create value to shareholders of the acquiring firms and which factors will drive performance. Solid, reliable data regarding M&A deals related to China is notoriously difficult to obtain and confirm. Therefore, this research was made possible by utilising the proprietary database of Chinese deals compiled by Grisons Peak LLP where the final sample was 44 UK acquisitions by Chinese publicly-listed companies where deal sizes were greater than $5 million and the deals resulted in control (over 50% ownership) of the target companies.
•
non-financial sector deals perform better than those targeting financial sector companies based in the UK. Acquisitions between Chinese firms and private firms in the UK show superior returns to acquiring companies that are publicly listed and smaller deals contributed more to acquirer success than larger deals.
Professor Moeller said, “this research breaks new ground because it focuses on the performance of Chinese acquirers in the UK, a relatively recent phenomenon. Many studies look only at the performance of acquiring companies in developed countries and/or cross-border deals generally, but because the home location of the acquirer can be such a large influencer on the
this research breaks new ground because it focuses on the performance of Chinese acquirers in the UK, a relatively recent phenomenon.
deal, most of those studies reported mixed results. We therefore used a unique, detailed and proprietary database from Grisons Peak LLP to enable us to do detailed analysis of Chinese companies as acquirers when not lumped in with acquirers from other countries.’ You can read the full paper online - ‘An Analysis of Short-Term Performance of UK Cross-Border Mergers and Acquisitions by Chinese Listed Companies’ - https://papers.ssrn. com/sol3/papers.cfm?abstract_ id=2863247.
The results of this study show that: • Deal volume of Chinese cross-border M&A into the UK hit a record high in 2016 Q2. The aggregated deal value was at a peak in 2015 Q1. • Specifically targeted were British companies in the consumer and real estate sectors, with more recent activity in the healthcare sector. • Chinese acquiring firms gained significant positive abnormal returns on the day following the event announcement but the positive returns disappeared as the event day progressed. • Chinese acquiring firms engaged in real estate and other
Page 19
Finance
Fiscal Stimulus and Inflationary Growth Whichever way you look at it, there is a general consensus emerging that we are going to see a rise in fiscal spending around the world.
www.trade-monthly.com
Trade Monthly December 2016
Rowan Dartington Signature’s Guy Stephens ponders the central bankers’ ability to control inflation and stimulate the real economy. The jungle-drums are starting to beat in the bond markets. Last week saw some significant moves in yields which have now moved back above 1% in the case of the UK ten-year benchmark Gilt.
Janet Yellen, Fed chair, made a speech to Boston academics and policyholders and made reference to a ‘high-pressure economy’ which may be required to reverse damage from the 2008-9 crisis which risks becoming a permanent scar. This is still being analysed by many as to precisely what it means. At the very least, it infers a recognition that all the liquidity stimulus, monetary easing and QE that has been implemented over the last seven years has failed to reinvigorate the US economic machine which is, at best, sputtering in a low-growth world despite all efforts to encourage the contrary. It also suggests that the Fed is preparing to play fast and loose with the control of inflation and that a program of fiscal stimulus may be the latest tonic to hit the economy. Expectations ahead of the UK Chancellor’s Autumn Statement on 23 November are painting a similar picture. Monetary easing has run its course, saved the economic system in the West but has now reached its limits in terms of stimulating demand. It is not really a surprise that any policy stimulus that remains firmly in the wholesale money-markets has done little to spur demand, which comes from the consumer. In the process of implementing QE, all asset classes have risen, as investors have reallocated assets elsewhere, but this only serves to make investors richer and does little for the man on the street who does not feel any wealthier.
Janet Yellen’s comments are hardly supportive of a December rate rise, which is now 65% probable according to the surveys of market opinion. However, it does suggest that the Fed sees inflation on the rise and is setting their stall out ahead of that so that if they don’t act, as it rises, we have all been pre-warned not to panic. In the UK inflation rose from 0.6% to 1.0%, demonstrating the first evidence that the devaluation of Sterling is feeding through into import costs, an element of which is being passed on to the end consumer. Evidence of margin pressure abounds within the UK retailing space with cautious statements from many clothing retailers and the Unilever/ Tesco spat last week revealing much. Added to this is the oil-price effect where the price falls of 2014/15 are now dropping out of the year-onyear figures and in fact, prices are on the rise, partly due to increased import costs but also the recovery in the oil price. Psychologically, market participants are much more sensitive to upside inflation than downside, even if the same technical explanations are made as to why we shouldn’t get emotional. Additional downside inflation is a bonus and although it is a technical feature of say weak commodity prices, and artificial, it is still welcome and fortunate. Additional upside inflation, of whatever technical form it may take, is unwelcome, and if it disguises real
inflation (the bad type) then investors will get spooked. Whilst it persists, and with Central Bankers saying they are prepared to tolerate it going forward, bond markets could get the jitters as fears mount that we are behind the curve and things are about to get out of control. The actual degree of control that a Central Bank has over inflation is a moot point. Observe how difficult it has been for the Bank of Japan to keep inflation positive despite negative interest rates and huge QE. The same goes for Europe and to a lesser extent, the UK and the US. If the Central Bankers cannot successfully get inflation to rise back to their 2% target after all the extraordinary and extensive measures implemented over the last few years, then why should we have any confidence that the very same impotent tools they have been using up to now will suddenly start working if inflation starts rising? It is a very scary thought that the amount of liquidity stimulus that has been deployed in the global economy may also prevent interest rate rises from being effective in curbing inflation if it exceeds the 2% target. However, before getting hysterical, we need to take a step back and think about the drivers of this forthcoming inflation. Firstly, the oil price rise is very muted and unlikely to rise much above $55-$60 as the days of $100 oil are long gone with the rise of fracking. The US has taken over from Saudi as the world’s swing producer, not based on quota agreements but profit and loss dynamics which is far more reliable.
Secondly, the effect of the fall in Sterling only affects the UK economy and rises in import costs will be diluted down as they find their way to the consumer. Hawks will be watching the price of Marmite and many other Unilever products very closely, to see where the compromise of that particular spat has been distributed - most likely shared between all three. Whichever way you look at it, there is a general consensus emerging that we are going to see a rise in fiscal spending around the world, for similar reasons as that seen in China, which incidentally reported a 6.7% economic growth this week. They famously deployed $500bn of infrastructure spending to protect their economy from the collapse in demand for exports manufactured in China as the crisis of 2008/9 took hold. Whilst there is much talk about bad debts and misallocated resources, the principle, if deployed on commercially viable terms, could provide a welcome fillip to economic growth and confidence. However, the big issue is the funding. China was awash with cash following its export explosion and a massive trade surplus. This is not the case in the West and so it will be fascinating to see how the authorities plan to pay for any fiscal investment. Visit www.rowan-dartington.co.uk / www.signature.co.uk / www.ardan-international.com
Page 21
Finance
London Remains ‘Most Popular European City’ for Institutional Real Estate Investors, but German Cities Dominate Leaderboard
www.trade-monthly.com
Trade Monthly December 2016
• Four of the top ten European cities were German • 30% of institutional investors believe that Brexit will offer more European commercial real estate investment opportunities; • 61% do not believe that real estate investors have enough access to a secondary property investment market; • BrickVest aims to provide users with access to a secondary market in the next few months. Following the UK’s decision to leave the European Union, nearly two in five (38%) institutional real estate investors cited London as the top European city to invest in commercial real estate, ahead of Berlin (36%), Munich (31%) and Paris (22%). According to a new study by BrickVest, the real estate investment platform, one in five (21%) cited both Dublin and Hamburg and a further 16% selected Frankfurt, highlighting a clear positive trend towards German commercial real estate. Indeed 40% of the top ten European cities were German. BrickVest’s research showed that three in ten (30%) institutional investors believe Brexit will either increase or significantly increase European commercial real estate investment opportunities. A further one in four (23%) institutional investors believe that Brexit will have no impact on commercial real estate investment opportunities. The research did however highlight some concern regarding the illiquidity of commercial real estate investing. Three fifths (61%) of respondents do not believe that, in light of £1.4 billion (2) being pulled from UK property funds post Brexit, real estate investors have enough access to a secondary property investment market. BrickVest is aiming to provide access to a secondary market over the coming months that make previously illiquid real estate invest-
ments tradable, enabling users to offer properties to other investors. Emmanuel Lumineau, CEO at BrickVest, commented, “our research has identified London as the number one European city to invest in commercial real estate as investors seek to capitalise on potential price discounts and market uncertainty. However, Germany dominates across the leaderboard and we have seen plenty of appetite from investors looking to capitalise on income producing portfolios across Europe and take advantage of the Brexit vote.
our research has identified London as the number one European city to invest in commercial real estate as investors seek to capitalise on potential price discounts and market uncertainty.
“BrickVest sets itself apart by providing UK and European investors with a unique liquidity platform to a traditionally illiquid asset class. To create liquidity in the market you need to have a lot of buyers and sellers who trust that the market is far, regulated and prices are transparent. On that basis people can trade”. “Like any trading market out there, you need a critical mass but you also need standardisation, automisation and trust, as well as institutional quality to make it happen which we believe is lacking in our real estate industry.” In light of Brexit, which European cities are you currently looking at/ planning to look at for commercial real estate investment? (survey with 96 investors) London 38% Berlin 36% Munich 31% Paris 22% Dublin 21% Hamburg 21% Frankfurt 16% Barcelona 11% Zurich 11% Amsterdam 10% Brussels 10% Copenhagen 10% Warsaw 5% Milan 4% Madrid 3% Stockholm 1% Source: BrickVest (October 2016) BrickVest allows investors to invest from €1,000 in real estate that previously was only accessible to large institutions such as pension funds,
insurance companies and large family offices. BrickVest offers a range of investment opportunities allowing investors to select an opportunity based on the preferred asset class, geography and return profile. Unlike property crowdfunding platforms, which first need to raise enough financing from investors in order to acquire a property, all the investment opportunities on BrickVest’s platform to date have already been closed. This means that investors can immediately acquire their stake in the property. BrickVest has unlocked the ability to combine unparalleled ease of access and transparency while providing an institutional-level investment platform with liquidity, supported by reputable fund service providers. European investors interested in signing up and viewing BrickVest’s pan-European real estate investment offering can do so on https:// brickvest.com/en/. Investors are strongly urged to seek independent professional advice when considering an investment. Past performance is not a guide to the future performance of an investment, and investors are encouraged to take independent legal and financial advice before considering an investment. (1) Research carried out online with 96 property focussed institutional investors in October 2016 (2) Investment Association data
Page 23
Finance
Money Woes Are Keeping Half the Nation Awake at Night
www.trade-monthly.com
Trade Monthly December 2016
Seven out of ten Brits admit their finances are ‘in a mess’, recent research revealed. A detailed study of 2,000 adults found a large percentage of us have forgotten about old accounts, have no idea how much interest we are paying on credit cards and have even lost track of all our outgoings.
A quarter of adults admit to being terrible with money, while 40% say their outgoings are too high. Consequently, 53% of people are plagued with sleepless nights as they fret about their finances, and 26 % claim their relationship has suffered as a direct result of the mess they’re in. Top money worries include not being able to ‘get through’ the month, as well as being unable to afford utility bills and basic necessities such as food and drink. However, when it comes to getting financial help, only one in 10 people would consider approaching their bank. Virraj Jatania, founder and CEO of Pockit, the world’s most inclusive bank, which conducted the poll said, “sadly there are many people who struggle to make ends meet, either because they don’t earn enough money or because they have lost track of their personal finances. And in a climate where we know the value of the pound is dropping and the cost of basic living is going up, with shoppers being warned to expect price rises, this is very worrying. “Our researchers found more than a third of people are choosing to not even look at their bank account, because they’re frightened of the consequences. Often, there seems no way out for people who live on a tight budget.”
Pockit can give anyone, even those with money troubles, access to a proper account. The study found six in 10 people constantly worry about being able to afford unexpected bills such as car repairs or home maintenance. More than half panic knowing they’ll have to fork out for Christmas and Birthdays, and a quarter can’t make their wage packet last for the whole month. 22% of people say they can’t afford to go out socially, and 17% are unhappy they’re unable to treat or spoil the children. When it comes to knowledge of finances, a third of people admit they have lost track of old bank accounts such as ones they took out as a student years ago. A fifth of those surveyed think they would be shocked if they were to learn exactly how much they owed on their credit cards. 14% have no clue how deep into their overdraft they are. Only 23% of people polled know exactly how much money they have in their bank account, and only 14% could say how much they owed on store cards and loans.
Sadly, four in 10 couples regularly have arguments about their finances, and one in 10 have ended a relationship because of money. A further 13% have had to take out a second job in order to boost their financial position, but one in 20 people have actually lost a job as a direct result of their worries. Getting financial help has never been more difficult – according to a quarter of those polled. Fifteen % of those polled say there aren’t any banks which will give them a credit cards, and 13% struggle because there are no banks which will give them a personal loan. 7% of British adults – that’s just under four million people – cannot even get a current account. Additionally, 27% claim they find British banks impossible to deal with – key criticisms being the fact you always have to deal with an automated system, you are treated like another number and for some, money is lent too readily. Virraj Jatania, founder and CEO of Pockit continues, “some people, through no real fault of their own, need a little help managing their finances, enabling them to get clever with their spending. We acknowledge there are millions of people who are frustrated by or shut out from traditional retail banks and the products and services they provide. “Today this demographic face stark choices: stick to cash, which makes money management and saving all but impossible; use a friend or family member’s bank or
credit card, which can be humiliating; or turn to pre-paid cards with their impenetrable small-print and hidden fees. “However, there is light at the end of the tunnel. As a brand, Pockit can give anyone, even those with money troubles, access to a proper account, with a MasterCard and so on – without the usual credit checks and bureaucratic sign-up process. This means that on occasions when an expected bill comes in, or a birthday is around the corner, people can budget or access the cash accordingly, because they’ll know exactly how much money they have available when they log into our app or online account.” Top 10 money worries 1. Not being able to afford unexpected bills such as home repairs and car maintenance; 2. Having to fork out for events like Christmas / Birthday; 3. Being unable to make your wage packet last to the end of the month; 4. You can’t afford to go out socially; 5. Being able to afford basics such as utility bills; 6. Being able to treat or spoil the children; 7. Affording basic necessities like food and drink; 8. You know you live beyond your means; 9. You can’t afford to replace shoes and clothing and; 10. You spend your whole time in your overdraft.
Page 25
Deals
EU-Canada Summit - Newly Signed Trade Agreement Sets High Standards for Global Trade On 30th October, President of the European Commission Jean-Claude Juncker, President of the European Council Donald Tusk, Prime Minister of Slovakia Robert Fico, and Canadian Prime Minister Justin Trudeau signed the Comprehensive Economic and Trade Agreement between the EU and Canada (CETA). The deal will benefit exporters, big and small, creating opportunities for European and Canadian companies and their employees, as well as for consumers. Almost all – 99% – of import duties will be eliminated, saving European exporters of industrial goods and agricultural products more than €500 million a year. As the EU’s most advanced and progressive trade agreement to date, CETA is a landmark accord that sets the benchmark for future agreements. It includes the most ambitious chapters on sustainable development, labour and the environment ever agreed upon in bilateral trade agreements. CETA will not solely help boost trade and economic activity, but also promote and protect shared values. European Commissioner for Trade Cecilia Malmström said: “This is how we can shape globalisation – through progressive, state-of-theart trade agreements that uphold our values and set new standards for global commerce. Through our agreement with Canada, we build a bridge to one of our closest allies, making a real impact for our exporters, entrepreneurs and employees. Trade simply works, and we know it from experience. When we get rid of unnecessary costs and overlapping bureaucracy, companies will try out new markets and hire more people.” CETA will also end limitations in access to public procurement, making it possible for EU firms to bid for public contracts – at the federal level as well as in Canada’s
www.trade-monthly.com
provinces, regions and cities. CETA will open up the services market, making it easier for professionals such as engineers, accountants and architects to work in Canada. Canada also recognises the special status of the EU’s Geographical Indications, agreeing to protect a list of more than 140 European goods in Canada, such as Prosciutto di Parma and Schwarzwälder Schinken. A range of goods will have fewer administrative hurdles to jump, avoiding double-testing on both sides of the Atlantic, benefitting smaller companies in particular. What’s in the text? CETA will create new opportunities for farmers and food producers, while fully protecting the sensitivities of the EU. The EU’s openings on certain products are limited and calibrated and are balanced out by Canadian openings that satisfy important European exporting interests, such as cheese, wine and spirits, fruit and vegetables, processed products and geographical indications. It will improve European access to maritime services in Canada and it will protect unique European agricultural products, the so called Geographical Indications. The EU’s 500 million consumers will also benefit from CETA. The agreement offers greater choice while maintaining current quality standards, as only products and services that fully respect all EU regulations will be able to enter the EU market. This means that CETA will not change the way the EU regulates food safety, including
GMO products or the ban on hormone-treated beef. The current form of investor-state dispute settlement (ISDS) that exists in many bilateral trade agreements negotiated by EU governments, has been replaced with a new and improved Investment Court System. The new mechanism will be a public one and not based on ad hoc tribunals. This reform means that investors can be protected from discrimination in a narrow number of cases, but in a manner which does not leave any room for concern on the right of states to regulate in the public interest. The procedures of the Investment Court will be transparent and its judges appointed by the EU and Canada. The Commission is committed to completing and refining the reform of investment dispute resolution and the discussions of the past few weeks and days have helped shape that commitment. Member States will continue to be able to organise public services like healthcare and education as they wish. This and other issues have been further clarified in a Joint Interpretative Instrument that will have legal force and that clearly and unambiguously outlines what Canada and the European Union have agreed in a number of CETA articles. Background and next steps After signature, the European Parliament must give its consent to CETA for it to enter into force provisionally. Provisional application, once an agreement has been
approved by Member States in the Council and by the European Parliament, allows European businesses and consumers to reap the benefits of the agreement early on. Since the Investment Court System (ICS) is a new issue in trade agreements and the public debate on it is not finished in many countries, the choice of EU Member States - supported by the Commission - is that ICS will be out of the scope of the provisional application of CETA. This means that it will only be implemented once all Member States conclude their national ratification procedures. During this time, the Commission will work with Canada to further elaborate some of the parameters of the new system, like the selection of judges, the access by smaller businesses to the new system and the appeal mechanism. There is clear proof that free trade agreements spur European growth and jobs. As an example, EU exports to South Korea have increased by more than 55% since the EU-Korea trade deal entered into force in 2011. Exports of certain agricultural products increased by 70%, and EU car sales in South Korea tripled, over this five-year period. The Korea agreement was provisionally applied during its ratification process. On average, each additional €1 billion of exports supports 15.000 jobs in the EU. 31 million jobs in Europe depend on exports. More information at: http://ec.europa. eu/commission/2014-2019/malmstrom_en
Trade Monthly December 2016
Avondale Complete the Sale of Calder Foods to Flagship Food Group In 2002 Nigel Harrison and Paul Baker established Calder Foods, a specialist chilled food manufacturer, taking the business from strength to strength to a £22m turnover. Their goal was to bring another party to the business to increase the value even further. They instructed Avondale to secure an acquisition that would not only be financially rewarding but also enabled them to retain a stake and active involvement in the business. Avondale’s exceptional insight into the food industry enabled them to be extremely targeted in their approach to potential acquirers. Of the six parties Avondale brought to the table, five submitted indicative offers. Ultimately it came down to two offers; one trade and one private equity, and after much negotiation and deliberation the offer from Flagship Food Group, a US owned multi-national food service specialist, was accepted.
Commenting on the acquisition Russell Maddock, CEO of Flagship Europe said: “Calder Foods has an exceptional reputation within the foodservice sector and their products will provide the perfect complement to our own portfolio of ‘Food to Go’ products for this marketplace. We look forward to a smooth transition and to further developing both the business and the ‘Love Fresh’ brand under the Flagship Europe umbrella.”
The partnership provides a golden opportunity to develop the Calder Foods portfolio, taking advantage of Flagship’ Europe’s wider customer base in the foodservice sectors to promote sales.
www.avondale.co.uk
Founding members Paul and Nigel, who will remain in their current positions as joint MDs of Calder Foods and retain shares in the Flagship, commented “This is one of the toughest business and personal decisions we have ever had to make. Not only did Avondale bring the right acquirers to the table but they also coached us selecting the best offer and partner for the future of Calder. We are delighted to be joining the Flagship family. The partnership provides a golden opportunity to develop the Calder Foods portfolio, taking advantage of Flagship’ Europe’s wider customer base in the foodservice sectors to promote sales.”
Page 27
Deals
Business Boost for Midlands Engine in First Ever Trade Mission In the first ever Midlands Engine trade mission to China, the Department for International Trade (DIT) and the Department for Communities and Local Government (DCLG) have been helping to put the region on the world map, bringing 36 organisations to China. Delegates from a wide range of sectors and representatives from local government met with their Chinese counterparts from 31 October to 4 November, to develop trade, investment, higher education and regional relationships. The Midlands is the only part of the UK where trade with China more than doubled in 2015, compared to 2010. The recent trade mission to China provided delegates the platform to build on the Midlands thriving economy, currently worth an impressive £222 billion. The delegation visited cities in eastern China such as Changzou and Anqing, and took part in the second ever UK-China Regional Leaders Summit to promote trade and investment. It also participated in the fourth China-British Business Council (CBBC) China Outbound Conference; the largest conference in China that focuses on promoting UK inward investment projects, to build stronger working relationships. International Trade Minister Mark Garnier said, “across the world the Department for International Trade is promoting the UK as a place to
www.trade-monthly.com
do business and trade with. This mission brought the Midlands Engine to one of the world’s biggest markets. Government has been helping organisations build their relationship with China and boost their global brand. Over 5 years, exports of goods from the Midlands to China have more than doubled to £4.5 billion. “A huge range of businesses - from regional brewers Hobsons Brewery to local law firm Geldards LLP will now take advantage of our strengthened economic ties and increasing export and investment opportunities following this trade mission.” Managing director of Nottingham-based walking tours company Brackenbury’s Britain, Richard Brackenbury added, “this trade mission was a fantastic experience demonstrating how critical it is we’re perceived to be an open economy. But most importantly, DIT and CBBC had worked incredibly hard to make effective relevant introductions. One contact has already been in touch in the 3 days since my return wanting to take matters further in bringing high end Chinese tourists to the region. If that succeeds, that’s hard-foreign cash into the Midlands economy.”
The delegation to China included representatives from Smith of Derby, Brackenbury’s Britain and Lovatt Consultancy. In an effort to boost jobs and add billions to the Midlands economy, visit programmes took place in Shanghai, Ningbo, Hefei, Anqing and Changzou in eastern China.
•
The links for trade and investment with China are growing not just in the Midlands but across the UK. The Chancellor, Phillip Hammond and International Trade Secretary Liam Fox announced a portfolio of projects offering more than £5 billion investment opportunities in the Northern Powerhouse to Chinese investors.
•
This comes as part of the eighth UK-China Economic and Financial Dialogue, which involves discussions on strengthening our economic partnerships on trade, financial services, infrastructure and energy.
•
•
•
• Between 2010 and 2015, Midlands trade with China increased by £2.4 billion (118.4%) compared to the national increase of £4.2 billion (57.7%). The UK government has committed to:
Establishing a new foreign investment hub based in Birmingham to help deliver more high value investments into the Midlands Engine; A £250 million Midlands Engine investment fund to provide investment through access to finance for small and medium-sized enterprises; The development of a £60 million energy research accelerator at the University of Nottingham, as well as £2.6 million investment in the Technology Entrepreneurship Centre; £300 million investment in a High Value Manufacturing Catapult and £45 million for a new Energy Systems Catapult in Birmingham, to attract the most innovative businesses to the region; £14 million for a new creative innovation centre at Digbeth, the Birmingham STEAMhouse and; Multi-million-pound investment to ensure the Midlands makes the most of the new high speed 2 rail links, at Birmingham and at Toton in the East Midlands.
www.gov.uk
Trade Monthly December 2016
Baringa Launches Consumer Products and Retail Practice Baringa Partners, the specialist management consultancy, has announced the launch of a new consumer products and retail practice, to be led by recently appointed Partner Koen Van Bockstaele. The decision to add a new practice to the business comes at an exciting time of growth for Baringa. Managing partner Adrian Bettridge commented, “we are already active in the consumer products and retail market but are now ready to build a dedicated team specifically focused on servicing this sector. The consumer products and retail practice will operate alongside our existing practice areas of energy and resources, financial services and telecoms and media, and leverage our expertise in technological transformation, operational excellence and customer and consumer experience.” Baringa has announced that Koen Van Bockstaele will head up the new team. Koen joins Baringa following 22 years at Accenture, where he was most recently managing director, global lead for sales and marketing transformation for consumer goods. He brings to Baringa experience working with companies such as Unilever, SABMiller, rb, Nestle, Majestic Wines, Diageo, BAT, and P&G both in developed and emerging markets. Adrian Bettridge added, “I’m very excited to welcome Koen to the team. He has a wealth of hands-on
involvement in the consumer products and retail sector, with strong capabilities around customer, digital, analytics, and sales and marketing. And – importantly for us – it became clear through the recruitment process that Koen’s style and personality would make him a perfect cultural fit at Baringa.” Koen Van Bockstaele commented, “I am delighted to be joining Baringa. After more than 20 years at Accenture I knew it would take something special to convince me to leave, and Baringa was it! I am looking forward to building the new consumer products and retail team over the coming year and developing a set of strong business offerings for our clients.
Koen’s style and personality would make him a perfect cultural fit at Baringa.
“At Baringa, we will help companies meet the individual consumer expectations (B2ME) and deliver growth through new markets and omni-channel operating models. Additionally, we will support our clients to drive productivity improvements and cost reductions, enable agile operating models and implement margin protection solutions. I can’t wait to get started.”
“The launch of Baringa’s new practice comes at a time of considerable challenge for the consumer products and retail sector. The industry is facing increasingly complex consumer expectations; greater competition both from existing and new entrants; a slowdown of growth; continuous drive for cost reduction; the new norm of constant volatility and uncertainty and digital disruptors that continue to change the rules. This makes it difficult for firms to achieve sustained profitable growth.
Page 29
Deals
Albion Ventures Completes Acquisition of OLIM Albion Ventures one of the largest independent venture capital investors in the UK, announces that it has successfully completed the acquisition of OLIM Limited from Close Brothers Group. The acquisition was first announced on 27 September 2016, subject to regulatory approval. OLIM is a fund manager specialising in UK quoted equities, with around £500 million of assets under management. The completion of the acquisition further diversifies Albion’s investment management expertise into quoted equities and increases its assets under management and administration to over £950 million.
www.trade-monthly.com
Albion Ventures is a UK investment management business, with combined funds under management or administration of over £950 million, including six venture capital trusts, Albion Community Power PLC (a renewable energy generator), Albion Care Communities, the UCL Technology Fund and, following this acquisition, OLIM. Albion was founded in 1996 and became independent of Close Brothers Group in 2009. Albion Ventures LLP and OLIM Limited are both authorised and regulated by the Financial Conduct Authority.
OLIM specialises in UK quoted equities and has approximately £500 million of assets under management.
Founded in 1986, OLIM is a specialist investment management company that focuses on delivering impressive investment returns and a superior client service. OLIM specialises in UK quoted equities and has approximately £500 million of assets under management. Its particular strengths are in charities, for which it manages £240 million, and in investment and other trusts and private clients. OLIM has been part of the Close Brothers Group since 2000.
Trade Monthly December 2016
IronPlanet® and TruckPlanet® Launch Fleet Services Offerings Featuring Powerful New IronPlanet Truck Locator for Multi-Truck Purchases IronPlanet®, a leading online marketplace for selling and buying used equipment and other durable assets, in conjunction with its TruckPlanet marketplace, on 10th November launched Fleet Services featuring IronPlanet Truck Locator. With access to over $200 million in Class 8 and other trucks, “IronPlanet and its TruckPlanet marketplace have become go-to destinations for the disposition and purchase of quality used heavy equipment and trucks,” said Paul Blalock, Vice President, Truck Sales, IronPlanet. “With our new Fleet Services program, and IronPlanet Truck Locator, we are now also the destination for fleet buyers of all sizes. If you want to buy one late-model sleeper or daycab, that’s great and we have what you want, but now if you want to buy 25 matched trucks that are all tradeterm ready, IronPlanet Truck Locator will help you manage or grow your fleet quickly, easily and economically all at once.”
•
•
•
•
•
Offer buyers access to over $200 million in fleet inventory from leading truck brands; Facilitate bulk sales that leverage IronPlanet’s leading technology and marketplace advantages; Meet the needs of fleet managers who have limited time and need access to a broad multi-unit buying format they can trust; Include industry-leading customer care from IronPlanet and TruckPlanet’s Inside Sales Team; Expand to other equipment classes such as IronPlanet’s new shipping container inventory, available soon for multi-unit purchase and;
IronPlanet and its TruckPlanet marketplace have become goto destinations for the disposition and purchase of quality used heavy equipment and trucks.
•
Provide a worldwide reach to make national and international buying, selling and delivery of fleet inventory as seamless as possible.
Though commercial trucks will be of immediate focus, IronPlanet anticipates rolling out this format to other asset classes, including storage and shipping containers, in the near future. More information on IronPlanet. com and TruckPlanet.com. For more information, visit www.ironplanet.com
While all of IronPlanet’s 1.5 million registered users worldwide can participate, IronPlanet Truck Locator is tailor-made for buyers who want to buy in bulk, who are not looking to buy one at a time during on-site or online auctions, and who want to work with a dedicated sales team that knows the details and is close to the deal. IronPlanet’s Fleet Services will: • Control revenue and increase the speed of cash recovery for OEMs and other sellers;
Page 31
trade M
O
N
T
H
L
Y
Bringing you the latest news, deals, information and comment from across the global retail and wholesale market, Trade Monthly is the go-to resource for everyone working in this dynamic and innovative industry. Bought to you by leading corporate publishing house AI Global Media, Trade Monthly features contributions and comment from some of the industry’s leading experts, commentators and innovators, and is read by the top CEOs, executives and professionals from across the market and around the world.
Subscribe Today www.trade-monthly.com/subscribe