Latest news with #Bain
Daily Maverick
6 hours ago
- Business
- Daily Maverick
Government guilty of double standards when it comes to banning corrupt companies
The government has an inconsistent and deeply troubling approach when it comes to sanctioning companies that betray the public trust through corruption and poor standards of service delivery. One need only look at the Bain & Company debacle to see this in stark relief. Bain's role in the hollowing out of the SA Revenue Service (SARS) under Tom Moyane's leadership during the State Capture years is now well documented. For a long time, nothing was done locally. It took the actions of the UK government, driven by Lord Peter Hain, to finally impose real consequences. Under that international pressure, the SA Treasury decided to place Bain & Co on the government's Database of Restricted Suppliers, which essentially banned Bain & Co from doing business with any level of the state, including local government. This ultimately gave rise to Bain closing its local advisory practice in South Africa in July. Bain paid the ultimate price for its outrageous and unacceptable conduct during the height of the State Capture years, and it was a long-overdue outcome. But let's be clear: this decision to ban Bain didn't come from decisive action by our authorities. It came under pressure from the UK government, which banned Bain in August 2022 from doing business with it (the UK government) for three years, on account of its actions in South Africa. Yet Bain was not alone in its misconduct. Other global giants like SAP, ABB, McKinsey & Co, and KPMG also acted out of line, aiding and abetting the siphoning of billions of rands from Eskom, Transnet, SARS and other state entities. Their transgressions were no less damaging. Like Bain, they apologised. Like Bain, they paid back some of their ill-gotten gains. But unlike Bain, not one of them was barred from doing business with the government. Why the double standard? South Africa has a powerful accountability tool at its disposal: the Database of Restricted Suppliers, managed by the National Treasury. Any company or its directors placed on this list is prohibited from doing business with the state. This sanction can have serious consequences — as Bain's closure demonstrates — but it is not used to the extent that it should be applied. The Treasury will say it only maintains the database, relying on government departments and municipalities to submit the names of companies and their directors that have wronged the state. But this is a weak excuse. If those responsible for reporting misconduct fail to act, the Treasury has a duty to step in, tighten the rules and hold those departments and municipalities accountable for their lack of duty and responsibilities to the country. The reality is that government departments and municipal authorities that collude with dodgy service providers are hardly going to report their partners-in-crime. The question which then arises is: should civil society organisations be allowed to make submissions for blacklisting on behalf of the state, if indeed it has accurate facts and can substantiate its reasons for the listing? Otherwise, the Database of Restricted Suppliers remains a blunt instrument, serving a very limited purpose, while essentially allowing billions to be stolen by repeat offenders. The truth is, the reluctance to use this tool is part of a bigger pattern. It suits those in power to keep the gates open. Real enforcement, whether it's efficient procurement blacklisting or an independent and highly effective criminal justice system, would disrupt the flow of crooked contracts that fund party coffers, line the pockets of connected elites, and feed the political patronage machine. Bain deserved to be banned. But so do SAP, ABB, McKinsey & Co, KPMG and every other company that colluded with state actors to rob South Africans blind. Until there is consistency, political will and decisive leadership, the plunder will continue, and the Database of Restricted Suppliers will remain a powerful but underutilised weapon gathering dust in Treasury's arsenal. It is time for Treasury to show that this country is serious about accountability. Until then, civil society will keep asking: why Bain and no one else? DM
Yahoo
13 hours ago
- Business
- Yahoo
Canada Goose Sees 22.5% Summer Sales Gain
Canada Goose Holdings continued up the steep part of its growth curve in the first quarter — although the double-digit top-line increase was muddied somewhat by summertime losses that were worse than expected. Revenues for the quarter ended June 29 jumped 22.5 percent to 107.8 million Canadian dollars. More from WWD Bain Considers Selling Off Canada Goose Haider Ackermann Dials Up the Heat for His Second Snow Goose Collection Canada Goose Expects Only 'Minimal Impact' From Tariffs - and Stock Jumps Most of that came from the brand's direct-to-consumer business, which rose 23.8 percent to 78.1 million Canadian dollars. Canada Goose converted two temporary stores into permanent locations during the quarter, bringing the brand's door count to 76. Comparable sales gained 14.8 percent. And wholesale revenues rose by 11.9 percent. Dani Reiss, chairman and chief executive officer, told WWD that the company came into the quarter with some momentum and has been growing stronger in summer categories. 'We showed up with the season with fresh product, new marketing, a clear point of view — direct-to-consumer is really the driving engine,' Reiss said. 'We've now seen seven straight months of positive comp sales, which speaks well to both our brand and our execution.' And while many higher-end brands are struggling for purchase with the luxury consumer, Reiss said Canada Goose still has a hold on its consumers. 'We have some visibility into July and it's looking really good as well,' he said. 'The momentum is not slowing down and we're really happy to be somewhat of an outlier actually.' Operating losses expanded to 158.7 million Canadian dollars for the first quarter from 96.9 million Canadian dollars a year earlier. That loss was driven by a one-time arbitration award to a former supplier totaling 43.8 million Canadian dollars, as well as costs to expand the company's retail network and increased marketing spend behind the spring-summer and Snow Goose campaigns. Adjusted net losses expanded to 91 cents a share — steeper than the 62 cent deficit analysts projected, according to Yahoo Finance. Shares of Canada Goose slipped 6.3 percent to $11.95 in premarket trading. But Reiss is one of the fashion CEOs least likely to be swayed by the minute-to-minute changes in the stock market. His approach to growing the business has been very methodical, from expanding in newer categories like apparel and footwear to opening stores in China to launching the Snow Goose by Canada Goose collection with creative director Haider Ackermann. The designer has helped keep the brand front of mind. 'We're very much in that pop culture conversation now,' Reiss said. 'That drives sales across all categories. His capsules are our cutting edge and are pushing the limits in some ways. I think that's really good because I think that brings us into the conversation and they sell well.' Overall inventories were down 9 percent from a year earlier. And net debt shrunk 29.3 percent to 541.7 million Canadian dollars, which the company attributed to 'higher cash balances and lower borrowings from our credit facilities compared to the previous year.' There could be some big changes ahead for Canada Goose. Sources say Bain Capital, which controls the voting rights at the company, is considering selling its stake. Reiss did not confirm that, but said: 'Bain Capital have been tremendous partners to me and we've had a great partnership and we continue to have a great partnership and I have absolutely every expectation that they will continue to be great stewards of the brand and they will act responsibly if and when they ever do anything. I'm not worried at all.' Chalk that up as more potential change in an ever-changing world. At least, Canada Goose doesn't have to worry too much about President Donald Trump's trade war for now. Most of its goods are made in Canada and are eligible for duty-free treatment under the United States-Mexico-Canada trade agreement. Best of WWD Harvey Nichols Sees Sales Dip, Losses Widen in Year Marred by Closures Nike Logs $1.3 Billion Profit, But Supply Chain Issues Persist Zegna Shares Start Trading on New York Stock Exchange Sign in to access your portfolio
Otago Daily Times
14 hours ago
- General
- Otago Daily Times
Fodder competition raises funds, improves crop yields
Quentin Pringle of Ettrick receives the Roxburgh and Districts Lions Club Wattlebank Cup for the best fodder crop from RAGT New Zealand's Charlotte Jones as McKenzie Frear from Ballance watches on. PHOTO: SUPPLIED Almost $10,000 was raised by the Roxburgh and Districts Lions Club after their eighth annual winter feed competition held earlier this year. Competition co-convener Bill Bain said the funds were raised by entry fees as well as auctioning off items donated for the event. The recipients of the money raised would be decided by the club at a later date, he said. Entries opened in early May and later that month the entrants' fields were judged by representatives from various seed companies. The winners were announced this month. Three types of crops were judged for the competition — feed beet, kale and swede, Mr Bain said. This year, 77 crop paddocks on 30 farms across Teviot Valley were judged for the competition. Quentin Pringle, of Ettrick, won the the heaviest fodder beet, the heaviest kale was won by Austin Garden, of Millers Flat, and Thomas Ward, also from Millers Flat, won the heaviest swede. The crops planted would be used by farmers to feed their stock during the winter. Mr Bain said there was a fair bit of competition between the farmers. "It's quite good, healthy competition." As well as bragging rights, farmers who entered the competition could learn how to improve their crops. The farmers could accompany the judges as their crop was judged, receive advice and ask questions. Mr Bain said crop yield had increased in the time that the competition had run, citing the advice from judges as the main reason. The Lions club was very appreciative of the support from seed companies and their representatives who gave their time and donated prizes to the competition. "We couldn't run it without them," Mr Bain said.
Forbes
2 days ago
- Business
- Forbes
Prices To Rise For Prestige European Consumer Products, Making U.S. Brands More Competitive
A "Made in France" label on red acrylic fabric indicating that product is manufactured in france and ... More representing a France map with tricolour flag featuring three vertical bands coloured blue, white, and red. Prices on a wide array of European consumer products are set to rise beginning Aug. 1, now that a EU-U.S. trade deal is in place, including a 15% tariff duty on EU exports to the United States. From food to fashion, watches to wine and autos to appliances, few product categories are spared. What unites them is that European brands carry old-world prestige. These heritage-rich brands have long commanded a price premium, and now that premium will come with an even a higher price tag. On the flip side, it's going to make made-in-USA brands more price competitive, all part of President Trump's America First agenda. Depending upon how much of the 15% price premium is passed along to consumers, it could reset demand for European brands, leading to slower sales in the U.S. What's for certain is that these premium Euro brands can't take their previous high status for granted and must continue to invest in their prestige value to maintain their market position. Tariff Blow To Luxury Fashion Brands Many major European luxury brands learned that lesson after boosting prices on average 33% from 2019 to 2023 with no discernible improvement in quality, according to UBS. After that, Bain reports that some 50 million luxury consumers exited the market and the personal luxury market contracted 2% in 2024. It is facing up to a 5% decline this year, as well. UBS doesn't expect luxury brands to make the same mistake twice. Luxury goods brands are expected to pass along only about a 2% price increase in the U.S. and 1% globally to avoid taking a 3% hit to earnings before interest and taxes. 'Brands are treading carefully with further price hikes to avoid alienating younger and occasional shoppers,' said Digital Luxury Group's managing director Jacques Roizen. European luxury brands hold a 70% global luxury market share and account for some 11.5% of total EU exports, according to an analysis by Bain and the European Cultural and Creative Industries Alliance. Some of the leading EU luxury brands include LVMH-owned Louis Vuitton, Dior, TAG Heuer and Fendi, Kering's Gucci and Saint Laurent, Richemont's Cartier and Van Cleef & Arpels, Swatch Group's Omega, Longines and Harry Winston, Hermès, Chanel, Prada, Moncler, Dolce & Gabbana, Valentino and Giorgio Armani. Further down the fashion food chain, Zara out of Spain, H&M from Sweden and Primark from Ireland are likely to be hit by tariff price increases, as are Germany-based sportswear brands Adidas and Puma. Rejiggering Engineered Products After pharmaceuticals, medications and other medical products, automobiles and motor vehicles are the third largest category of EU exports. And according to the latest Cars Commerce report, U.S. unit sales of new vehicles rose 3.9% from January through June as consumers picked up the pace on purchases ahead of tariff price increases. Leading luxury automobile brands are going to take a big hit as the 15% EU tariffs take hold. According to the European Automobile Manufacturers' Association, some 22% of EU vehicle exports land here. Brands in the crosshairs include BMW, Mercedes-Benz, Volkswagen, Audi, Porsche, Fiat, Volvo and Peugeot. These luxury auto leaders faced a global slowdown from 2023 to 2024, dropping a reported 5%. Automobiles are the luxury market's largest segment, totaling $668 billion last year compared to $419 billion in the personal luxury goods market. Consumer appliance brands are also facing tariff challenges. Bosch, Electrolux, Miele, Philips, Braun and De'Longi are leading brands in this sector. For example, the largest of those brands, Bosch generated some 20% of global sales in the Americas last year and it was the only market that grew, up 5%, while Asia-Pacific (31% of sales) was flat and Europe (49%) fell 5%. Beauty Makeover With $50 billion in sales last year, Paris-based L'Oréal is the world's leading beauty company with 37 brands in its portfolio under four divisions: consumer products (e.g. L'Oréal Paris, Maybelline, Garnier), luxe (Lancôme, Kiehl's, Aësop, IT Cosmetics), dermatological beauty (La Roche-Posay, CeraVe, SkinCeuticals) and professional products (Kératase, Redken, Matrix). And within the luxe division, it is also the beauty partner of numerous luxury brands, including Yves Saint Laurent, Armani, Ralph Lauren, Valentino, Prada and Mui Mui. Last year, some 27% of sales were made in North America, its second largest market after Europe at 33%. In dollar terms, the 15% tariff will hit the higher-end of its range – 36% of sales are in luxe, followed by 16% in dermatological beauty and 11% professional products. However, those brands' more affluent target market may be more willing to accept a price hike as compared to the 37% of sales in its more affordable consumer products range. Other EU beauty brands under pressure include Beiersdorf (Nivia, Eucerin and La Prairie), Clarins, Yves Roche, Chanel and Dior. Gourmands Will Pay More American consumers, who've acquired a taste for more premium European foods, wine and spirits, are likely to suffer sticker shock the most as tariffs push prices above previous levels. Statista reports high-quality, artisanal European food imports have grown from $16.5 billion in 2021 to $20 billion in 2023, a 21% increase. Popular EU brands include sparkling water (Evian Perrier, Pellegrino brands), chocolates (Ferrero Rocher, Lindt, Godiva, Toblerone, Nestlé), Lavazza coffee, Barilla pastas and sauces and Goya Foods. Specialty regional-specific olive oils, cheeses, wine and spirits brands will also take a hit. LVMH's wine and spirits segment is already 8% underwater in the first half of 2025, and it can ill afford having its brands' already premium prices go up another 15% in the U.S., the business group's largest market, accounting for 35% of revenues. The Italian Unione Italiana Vini winemaker's trade association figures the 15% tariff will cost exporters $371 million, noting that a bottle of Italian wine that previously retailed for $11.50 per bottle will cost $15 going forward. American Consumers To Reconsider Place Of Origin Whether Americans will be both willing and able to absorb the growing premium on European imports is an open question. What is likely is that consumer demand will cool, making the U.S. a less attractive trading partner for many brands. And with falling demand, the 15% tariff price hike will ultimately have less impact on inflation. At the same time, with no shortage of domestic alternatives, American-based brands are well-positioned to capitalize on the change. As shoppers prioritize price/value over prestige, it could give U.S. brands a much-welcomed competitive edge and much-needed boost. See also:
Mint
3 days ago
- Business
- Mint
Why it has never been better to be a big company
For all the unwieldiness it entails, scale has always brought enormous benefits in business. Fixed costs are set against more revenue, raising profits and supporting investment. Heft brings greater bargaining power with suppliers and financiers. From the early 2000s, the advantages of scale became even more pronounced. Intangible assets, including software and intellectual property, gave the upper hand to companies that could afford to invest in them. Globalisation provided big companies with more room to grow, as well as access to larger—and cheaper—pools of labour. In America, the gap in profitability between big and small firms widened (see chart 1). Economists began to speak of 'superstar" firms racing ahead of the competition. Now size is conferring advantages in new ways. Artificial intelligence (AI) is reinforcing the dominance of big firms over small ones. So is the presidency of Donald Trump, which has raised the importance of resilience and political sway. Yet these same disruptions could spell danger for America's corporate giants. Already companies from Apple to Walmart are discovering how their size can make them a target of Mr Trump's wrath. Start with AI. You might imagine that lumbering leviathans would be too tied up in bureaucracy to make use of the technology. In fact, their scale allows them to invest far more in it than smaller rivals. According to a survey in December by Bain, a consultancy, American companies with more than $5bn in revenue had an average annual budget for generative-AI projects of $27m, five times the level in the preceding February. Those with between $500m and $5bn in revenue, by contrast, had set aside $9m, up by two-thirds over the same period (see chart 2). JPMorgan Chase, America's biggest bank, says it has rolled out AI tools to most of its 320,000 employees. UnitedHealth, the country's biggest health insurer, claims to have 1,000 different applications for the technology. Sanjin Bicanic of Bain notes that getting AI to work well is proving more expensive than for other types of digital technology, as it requires companies to organise their data and tinker with models. Big firms have the added advantage of larger data sets that can be used to refine the AI systems they build. It is not only technology, but politics, too, that is making it even better to be big. Although many of Mr Trump's tariffs now face legal uncertainty, those that remain will hammer sales and profits for businesses. Big firms, though, tend to be more resilient to such shocks. Among listed American firms, those in the top quintile by revenue have fatter operating margins and a healthier ratio of debt to operating profits (before depreciation and amortisation) than the average, and hold a lot more cash, too. That means they are less likely to get into financial trouble during a downturn. It also allows them to bounce back more quickly, as happened following the covid-19 pandemic. We examined the profitability of listed American companies, as measured by their return on invested capital, in nine non-financial sectors before and after the pandemic. For seven of the nine, the biggest firms—those in the top quintile by revenue—were, on average, more profitable across 2023 and 2024 than they were across 2018 and 2019. The bottom quintile, by contrast, became less profitable in the same number of sectors. Bigness tends also to bring increased supply-chain resilience—just as important in a trade war as it was amid covid-19. 'During the pandemic, I kept getting calls from small and medium-sized businesses saying that they could not get shipping capacity. The big companies were, by and large, at the front of the queue," says Philip Damas of Drewry, a shipping consultancy. Such prioritisation pays when companies are rushing to import products into America before tariff deadlines. It helps, in addition, that big companies tend to have more suppliers in more places. A study by the World Economic Forum and Kearney, a consultancy, found that firms which grew their market share in the wake of the pandemic were more likely to have back-up suppliers in a variety of countries for a significant share of the products they procured. Last, with scale comes an increasingly valuable asset: political capital. We examined data from OpenSecrets, a non-profit organisation, on the lobbying activities of American firms in the S&P 500 index. The median company in the smallest half of the index by revenue spent nothing on lobbying in 2024, relying solely on groups such as the US Chamber of Commerce to champion its interests. The median firm in the top quartile, by contrast, spent $3.3m on lobbying, five times as much as for the next quartile and twice as much as a share of operating expenses (see chart 3). It also hired a greater number of lobbyists relative to its number of employees. Mr Trump likes to talk directly with the bosses of many of America's largest companies. In April those of Home Depot, Target and Walmart, three retail giants, met the president to discuss their concerns over tariffs. Smaller retailers have received no such attention. Mr Trump seems particularly receptive to firms that promise to invest large amounts in America. 'So many companies want to come to the White House...[They offer] $10bn or more and I am there," he said in a speech in February. Such direct access is even more important than usual, notes Jorge Guajardo of DGA, a political-advisory firm, because many mid-level positions in the administration have still not been filled. All this helps explain why, since Mr Trump's inauguration, the Russell 2000 index of America's smallest listed companies is down by 11%, compared with a drop of only 3% in the S&P 100 index of America's largest firms. Yet the shifting business landscape also presents dangers for corporate giants. As with all new technologies, incumbents that are too timid in using AI will be exposed to newcomers that have built themselves around it. Then there is the risk that Mr Trump's tariffs result in a lasting reversal of globalisation which limits companies' access to foreign markets. That scenario would hit big companies harder than small ones. America's top quintile of listed non-financial firms by revenue derive 23% of their combined sales abroad, compared with just 7% for the bottom quintile. More attention from politicians may not always be welcome, either. Walmart recently angered Mr Trump by suggesting on an earnings call that it would need to raise prices in response to higher tariffs. Or consider Apple. In April the iPhone-maker won a partial reprieve from tariffs on Chinese-made smartphones. Two weeks later it said that it would shift the production of its America-bound iPhones to India. Mr Trump was not pleased. On May 23rd he threatened a tariff of 'at least 25%" on iPhones sold in America but made elsewhere. Even if the courts make Mr Trump's tariff threats toothless, he has plenty of other means at his disposal to make life difficult for companies. America's corporate giants have enjoyed super-sized advantages. They should be prepared for some super-sized headaches, too. To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter.
