Brookstone sale to Chinese buyer approved
Merrimack, N.H. – A bankruptcy court in Wilmington, Delaware, has approved the June 4 sale of Brookstone Inc. to Hong Kong-based Sailing Innovation (US) Inc., a consortium led by Sailing Capital Overseas Investment Fund LP with a financing commitment from GE Capital. Backers of the $174 million acquisition include Chinese conglomerate Sanpower Group and Chinese government-supported Shanghai Investment Group.
The purchase, which is a key element of Brookstone’s plan to exit bankruptcy, includes $135.7 million in cash, $10 million and $28 million of Brookstone’s liabilities. Novelty retailer Spencer Spirit-Holdings Inc. will receive $4.2 million in fees and expenses. Sailing Capital has said it wants to revitalize the Brookstone brand and will not close more than one or two of the chain’s 242 current stores.
Report: Groupon purchases Canadian couponing app
Chicago – Groupon has reportedly purchased Canadian coupon app SnapSaves. According to the Canadian Press, Groupon completed the purchase June 13, buying the app for an undisclosed sum from Toronto-based daily deals site Buytopia.
SnapSaves users can take smartphone photos of their grocery receipts and receive refunds on select products. Groupon has been expanding its smartphone offerings in the past year, including the launch of a mobile app version of its website and a smartphone digital coupon feature called Freebies.
Smart pricing for back-to-school
Intense price competition during back-to-school season is nothing new, but the competition now occurs on the shifting sands of an increasingly dynamic online world.
There tends to be a lot of talk about intense price competition and a highly promotional climate every back-to-school season. Heading into the 2014 season no one will be surprised to see retailers touting all manner of price promotions and a willingness to sacrifice margin on key items to generate traffic. However, when it comes to matters of pricing it should be noted that things are not always as they seem and this is especially true in the era of omnichannel retailing.
We see amazing things happening with pricing every day at 360pi where we gather pricing information on millions of products from every corner of the Internet. This new age of price transparency and increased pricing dynamism has resulted in exponential growth of data. For those able to collect and decipher the data the result is unprecedented real time visibility into the competitive landscape and a unique perspective on what to expect this back-to-school season. The following are some of the key pricing predictions we expect to see in the coming months.
• Pre-Labor Day deals on back-to-school items will be few and far between. This is consistent with a trend we observed during the holidays and the notion of the “pre-Black Friday Myth,” in which there is considerable promotional activity around limited price reductions.
• Amazon will be good, but not great. This retailer doesn’t want to give away margin any more than the next guy. They will consistently provide shoppers with good deals, but they are unlikely to always be the best deals on back-to-school products.
• The majority of retailers will either start or repeat the behavior of raising prices on key back-to-school items in the immediate week and days prior to Labor Day weekend.
• Smart shoppers will wait until after Labor Day. The best back-to-school deals will be one full week past Labor Day
• The level of retailer-specific discounting on back-to-school items one full week post Labor Day will provide early insight into retailers’ third quarter financial performance.
• Expect both Amazon and Sears will lead the pack in terms of number of price changes, both up and down. However, unlike Amazon, look for Sears to make price changes on back-to-school items that are relatively large swings, out of context, and inconsistent with brand, potentially alienating customers and causing sales difficulties.
Many of these behaviors were evident last year with a key item that demonstrates the new reality of dynamic pricing in the digital age. Printers are a classic back-to-school item and they can provide insight into retailer pricing practices at this time of year. Looking at what retailers did last year with printer pricing in the critical weeks leading up to and following Labor Day (September 2, 2013) some interesting behaviors come into view that foreshadow 2014 back-to-school retail pricing and tactics.
The chart below highlights retailer pricing tactics on printers that 360pi observed last year for nine major retailers between August 20 and September 22. To make sense of the chart, keep in mind that all price changes are relative to the retailer’s own printer prices using a start date of August 20. For example, Amazon (dark orange line) raised their printer prices an average of 5% between August 20 and August 30.
What this chart tells us about printers is that the majority of retailers stayed within 5% of their August 20 price heading into Labor Day weekend while four major retailers (Amazon, Best Buy, Sears, and Staples) raised their prices.
After Labor Day, prices became more volatile with retailers’ average printer price positions fluctuating plus or minus 10%, offering an indication of unsold printer inventory and related markdowns. For example, it would seem Best Buy had significant unsold printer inventory after the back-to-school rush which prompted steep discounts in excess of 30% starting September 12. From a shopper perspective, the sweet spot for printer bargains was one full week post Labor Day, with prices creeping back up a week later. Three weeks after Labor Day, the majority of retailers were trending 5% to 10% upwards in pricing.
Looking specifically at Amazon and Sears, it was a case of two extremes. Amazon arguably had the tightest pricing range on printers for the duration of the analysis while Sears was the most erratic with prices that rose steadily during the two month period we observed.
Each category retailers offer during back-to-school season has its own unique characteristics, but the promotional climate documented last year illustrates just how dynamic the pricing environment has become.
Jenn Markey is VP of marketing and product management for 360pi, a leading pricing intelligence firm that provides enterprise-wide insights to enable smarter, more profitable decision-making. Visit www.360pi.com.