Asia luxury sales fall
Cartier watch maker Richemont SA said sales growth had ground to a halt in the Asia-Pacific region, rekindling fears about a market which has been the driving force of luxury sales in recent years. Shares in the world’s second-biggest luxury goods company fell more than 6 percent yesterday in early trading after it posted a smaller-than-expected rise in fourth-quarter sales. Other luxury stocks, which have been rallying since the start of the year on hopes that demand in China was recovering, were also dragged lower, including world No. 1 luxury firm LVMH Moet Hennessy, Louis Vuitton SA and watchmaker Swatch Group AG. “At this stage, it is unclear how business patterns may develop and how the business in the Asia-Pacific region will evolve in the near future,” Richemont said in a statement.
BASF, Petronas axe venture
BASF AG, the world’s biggest chemicals maker, and Malaysia oil and gas giant Petronas yesterday announced they were terminating plans to set up a specialty chemicals joint venture in Malaysia. The two companies had signed a proposal in March last year to develop, construct and operate production facilities for a host of specialty chemical products in Pengerang. However, “following negotiations, Petronas and BASF concluded that it would be in their mutual interest to terminate the agreement as both parties were unable to come to an agreement on the terms and conditions for the implementation of the proposed venture,” the two said in a joint statement. The statement said that both companies nevertheless remained committed to continuing their existing long-term partnership.
Zelnik mulls Virgin buyout
Patrick Zelnik, the owner of French music label Naive Records, is considering an offer to buy retailer Virgin Megastore France, which is undergoing a court-ordered restructuring, newspaper Les Echos reported yesterday. The news comes as British media are reporting that restructuring specialist Hilco is the front-runner in the battle to save music retailer HMV Group from administration, with music labels and film studios also preparing a rescue package. Zelnik, who co-founded the first books-to-music Virgin Megastore in Paris in 1988 with British entrepreneur Sir Richard Branson’s Virgin Group, told Les Echos he would submit an offer “within two to three weeks.” Zelnik hopes to get backing for his offer from the French authorities, including sovereign wealth fund FSI.
Pearson gives grim outlook
British education and media group Pearson warned it expected tough market conditions to continue this year after weak trading in its key fourth-quarter selling season hit last year’s earnings. The Financial Times newspaper and Penguin books publisher said it now expects to report on Feb. 25 adjusted earnings per share of about ￡0.84 for last year, below the ￡0.849 it had said it expected in October last year, due to restrained government funding on education in developed markets and weak advertising. The result was already expected to be down from the previous year’s earnings of ￡0.865 a share due to the sale last year of its 50 percent stake in the FTSE International market indeces business to the London Stock Exchange, which it said contributed ￡0.22 a share to earnings in 2011. Shares in the group were down 3 percent at ￡1.202 by 9:03am, back to the level they were trading at at the start of the year following a jump last week.