Luxury

Fashion victims

The high-end fashion industry continues to suffer in the economic downturn. Christian Lacroix, the French fashion house, has filed for court protection from creditors in Paris, where a commercial court will decide whether to restructure or liquidate the company. Although Lacroix’s chief executive, Nicolas Topiol, emphasised that the brand intended to continue operating during the process, the news brought an end to a luxury business model. Meanwhile Kim Winser, CEO of British heritage brand Aquascutum, resigned after the management buyout she had put together was rejected by her Japanese parent company Renown, which put the brand up for sale last year.There was some cheering news though: Diego Della Valle, the Italian entrepreneur who made the footwear giant Tod’s a global brand, has taken a 6% stake in Saks Fifth Avenue, saying that he hopes this initiative will inspire others to invest at “a difficult moment.”

Agriculture

Bean counting

Cadbury, the UK-based confectionary manufacturer, is looking to build on its dominant position in India’s chocolate market by turning the country into a regional centre for cocoa production. Cadbury has been forced to become more self-sufficient in cocoa beans in India because of a 30% import duty on the commodity, but hopes to source all of its beans domestically by 2015. Cadbury believes that if it can persuade 20% of Indian coconut farmers to plant cocoa trees too it could increase national production of the beans from 10,000 tonnes to 150,000 tonnes a year — or 3% of world production — by 2020. India is proving to be one of Cadbury’s most resilient markets, with profits continuing to grow at about 20% a year, and sales at 30%.


Hospitality

Competition brewing

McDonald’s, the US fast-food giant, is aiming to overtake Starbucks to become the largest coffee house chain in Europe, hoping to increase its network of McCafés to at least 1,200 by the end of 2009. Seattle-based Starbucks currently operates some 1,300 shops in Europe, but recently posted a 77% slide in profits during the first quarter of 2009 to €18m and is to close stores having admitted to expanding too quickly. By contrast, McDonald’s saw like-for-like sales increase by 4.3% in the first quarter, while earnings increased by 4% to $980m (€690).


Of its 14,000 US restaurants, 80% have McCafés, and research by Stifel Nicolaus has found 60% of Americans would be willing to “trade down” to McDonald’s coffee if it was cheaper and made more quickly than Starbucks. Half of its German stores and a fifth of its Russian and Italian outlets house McCafés. Alongside these countries, France and Austria are among the markets that will see heightened penetration.


Media

Industry gets the hump

The UK film and TV industry is calling on the government to introduce online “speed humps” to slow or restrict the broadband access of people who illegally share copyrighted material, and display pop-up warnings on websites to stem the rising tide of internet piracy. The industry claims that, with an estimated six million people in Britain illegally sharing files, pursuing all pirates through the courts is unworkable. Some internet service providers have sent warning letters to persistent illegal file-sharers and will continue to do so as part of the government’s drive to reduce online piracy by 70%—80%, but legal action by the content industry would only be used as a last resort.


Telecoms

Patent improvement

In an effort to boost the local Finnish economy, Nokia is throwing open its thousands of unused patents so that any company in Finland can pursue ideas that it has abandoned. The innovations include ideas for energy, location-based services, healthcare applications and internet services, among others. It’s not simply a matter of Nokia giving out its worst ideas for free — it, along with many big, innovative companies, frequently patents ideas that they ultimately decide not to pursue. Called the Nokia Technopolis Innovation Mill, it is a partnership with Technopolis, a European chain of office parks, Tekes, a Finnish tech funding agency, and several Finnish cities. Nokia acknowledges that promising ideas might blossom if pursued by smaller, more focused firms. In support, €8m in venture funding will pour in; €4.5m of which will be publicly provided. 


Automotive


Magma force

Fewer jobs cuts than feared are expected following the deal by Canadian-Austrian auto parts giant Magna International to buy General Motors’ European units. GM Europe employs around 54,500 workers in factories in Germany, Britain, Poland, and other countries. While rival bidder Fiat would likely have cut more jobs in the immediate future, the Italian automaker offered what many felt was a more plausible long-term rescue plan for Opel (see analysis, p22).

E-Commerce

Brand value

Some 9% of search terms entered by consumers shopping on the internet in Europe are related to particular brands, a study by Bigmouthmedia across eight major markets has found. Based on an analysis of 600,000 online searches conducted in Denmark, France, Germany, Italy, Norway, Spain, Sweden and the UK, the company reports that the average number of brand-specific searches in these countries reached 9.4%. Germany posted the highest number of brand-based enquiries, 13%, compared with 12% in the UK, 9% in France and Italy, and 8% in the other countries assessed. The company also found that consumers are increasingly using longer search terms as they seek to track down relevant information. Entries with one key word accounted for just under 22% of all enquiries, reaching a high of 24% in Denmark, compared with a low of 19% in Italy. Two-word searches took a similar share, a total that fell slightly, to 19%, for three-word searches, and to 13% for information requests with four keywords. Italians were most likely to use four-word search terms, doing so 16% of the time, compared with just 10% in Spain.

Number cruncher

$10bn
The amount Facebook is valued at after a Russian group paid $200m for a stake of nearly 2%. In October 2007 Microsoft bought a 1.6% stake, which valued the social network at $15bn.

35,000
The number of new cars bought within the first two weeks of 
the UK government’s £2,000 scrappage scheme for 
vehicles over 10 years old. 


$1bn
The cost of Turkey’s Mardan Palace hotel as Azerbaijan owner Telman Ismailov 
attempts to turn Antalya into Dubai.


€70bn
The increased loan target for this year by the European Investment Bank, the EU’s long-term lending bank in an effort to stimulate the 
27-country bloc’s economy.


700,000
The number of receipts and their 
accompanying claims examined by the Daily Telegraph in its investigation into the British MPs’ expenses scandal.