Luxury Shoppers Shut Their Purses

(Businessweek) - Purveyors of luxury goods are finding that even their well-cushioned customers are feeling the economic pinch and putting their credit cards away

 

Luxury stores have finally caught the economy's cold.

For months, high-end retailers posted healthy sales increases, thumbing their noses at dismal reports of slumping home sales, risky mortgages, and rising energy prices. But now it looks as though even well-heeled consumers are pulling back. On Jan. 10, the upscale department store Nordstrom ( JWN) said that December sales at stores open at least a year fell 4% from last year, compared with an 8.7% increase in November. Saks (SKS), New York's Fifth Avenue luxury mainstay, also reported that its same-store sales were up a mere 0.8%, compared with a 25.7% increase in the previous month. And blue-blood retailer Neiman Marcus eked out a tepid 2.9% sales increase, vs. 5.8% in November and 8.5% in October.

"Everyone's shopping for the bare necessities, and people have stopped treating themselves," says Patricia Pao, founder of the Pao Principle, a New York retail consultant.

 

Read more at Businessweek

India sweetens Ethopian sugar

(Fin24) - India has agreed to give Ethiopia a $640m credit out of a total $1.3bn needed to boost Ethiopia's sugar production, say officials from the two countries.

Late last year Ethiopia announced plans to increase its annual sugar production to 1.3 million tons by 2011 from a current 300 000 tons.

India's Exim Bank will finance the $640m.

"It is the largest ever line of credit that India has provided to any country so far," Gurjit Singh, the country's ambassador to Ethiopia, said while signing an agreement between India and Ethiopia.

New factory

The remaining $660m will be covered by the Ethiopian government.

The money will mainly go towards erecting a new factory at Tendaho in the country's Afar region, and expansion of Finchaa, one of four existing sugar factories in Ethiopia within the next two years.

"With the completion of Tendaho... and the enhanced production of the existing four sugar factories... annual sugar production is expected reach up to 1.3 million tons within the next two years," Trade and Industry Minister Girma Birru said.

Tendaho will have an annual production capacity of 600 000 tons and will be Ethiopia's largest sugar factory. It will be located in the lower Awash Valley, in the Afar region, along the Addis Ababa-Djibouti highway and railway line.
 

Read more at Fin24

Less Moz miners in SA

(Fin24) - Fewer Mozambican workers were hired by South African mines in 2007, indicating a move away from the former
migrant labour system of old.

According to recruiting agency Teba, South Africa's mining industry recruited 44 849 Mozambican workers in 2007 - 3.6% fewer than the 46 528 recruited in 2006.

Of the total number of miners recruited last year, 36 702 were contract renewals, 7 950 were new hires with experience in the mining sector, and just 227 were cases of individuals who had never previously worked in mines.

José Carimo, regional director for Teba in Mozambique and Swaziland, this week told Mozambican newspaper Notícias, that the lower number of
Mozambicans recruited by South Africa's mines was primarily the result of South Africa's new migrant labour laws, which among other things restrict access to employment by non-qualified foreign workers.

 

Read more at Fin24

China Mobile Apple talks over

(Fin24) - China Mobile Limited says that it has discontinued talks with Apple over the launch of iPhone handsets in China.

"We have held talks with Apple to launch the iPhone device in China. However, those talks have ended," China Mobile spokesperson Rainie Lei said. She declined to say why the talks ended.

China Mobile Chairperson Wang Jianzhou said in November last year that the two companies had been unable to agree on a revenue-sharing model.

Calls to Cupertino, California-based Apple were not answered today.
 

Read more at Fin24

Metorex plunge may hurt deals

(Fin24) - The share price of Metorex is plunging inexplicably and has fallen 38% from its 12-month high at a time of bullish conditions for two of its main products - copper and gold.

The fall is particularly embarrassing in terms of Metorex's bid to minority shareholders in Copper Resources Corporation (CRC) which has just been extended for the second time to January 18.

CRC owns three copper projects in the Democratic Republic of Congo (DRC) with resources and reserves totalling up to 2.4 million tonnes of contained copper metal.

Metorex bought 38.7% of CRC in July last year plus a 5% stake in its 75% held subsidiary MMK from the Forrest group for R600m. The Metorex share price stood around 2 400c at the time and it subsequently rose to an all-time high of 2 950c.

The CRC share price at the time sat around 87p and, when Metorex pitched its equity offer to the CRC minorities, it also included an alternative cash offer of 125p per CRC share.

But Metorex shares hit 1 725c today before recovering to around 1 830c while CRC shares have risen to around 160p.

Read more at Fin24

Ford sees challenges in first half of 2008

(Reuters) - Ford Motor Co (F.N: Quote, Profile, Research) expects a challenging first half of 2008 for all automakers in the United States with a drop in industrywide retail sales, Ford's North American president said on Monday.

Mark Fields also said he hopes prior Federal Reserve rate cuts would begin to support the economy in the second half of the year, and that the U.S. government would take a look at tax rates as part of an economic stimulus package.

 

Read more at Reuters

 

 

Gulf funds eyed for further U.S. bank bailouts

(Reuters) - The sovereign funds of Kuwait and other Gulf states were in the spotlight on Monday as Citigroup sought extra emergency funding and its fellow U.S. bank Merrill Lynch was said to want more cash too.

The moves came as one newspaper report raised questions over whether previously agreed Chinese funding for Citigroup may fall through.

Citigroup, the largest U.S. bank by assets, is looking for more funds to help it through losses from the subprime crisis after securing $7.5 billion from the Abu Dhabi Investment Authority in November, a source familiar with the situation told Reuters in New York.

Merrill is seeking about $4 billion from the Kuwait Investment Authority and others as it faces as much as $15 billion in credit market losses, The Financial Times newspaper reported.

The newspaper said a Merrill deal could be announced as soon as midweek, and that other investors could come from Europe.

A public relations official for the KIA, which manages funds for Kuwait, referred calls to Managing Director Bader al-Sa'ad, who could not be reached in his office or on his mobile phone.

In December, Merrill shored up its capital base by as much as $7.5 billion after selling a stake to Singapore state fund Temasek and asset manager Davis Selected Advisers.

 

Read more at Reuters