Standing on the threshold of a retail revolution and witnessing a fast changing retail landscape, the Chinese footwear market is set to experience the phenomenal growth in coming years. In past few years, the market has seen robust growth, says “China Footwear Market Analysis”. This report provides extensive research and in-depth analysis on the Chinese footwear market. The detailed data and analysis given in the report will help the client to evaluate the leading-edge opportunities critical to the success of the footwear market in China.

The forecasts and estimations given in this report are not based on a complex economic model, but are intended as a rough guide to the direction in which the market is likely to move. This forecast is based on a correlation between past market growth and growth of base drivers.

Key Findings

The Chinese footwear retail market is anticipated to grow between 5-6% CAGR in terms of value and volume respectively for the next five years.

Medium- and low-end footwear accounts for the majority of footwear consumption market in China.

The footwear industry is mainly concentrated in Guangdong, Fujian, Tianjin (good, modern factories), and Zijiang.

<p>Between 2002 and 2006, China’s share in worldwide low-cost exports increased by 3.7 Percentage points to 65.7% points in 2006.

The growing China shoe market offers vast opportunities for shoe designers. It is expected that China will need around 300,000 shoe designers in next 10 years (2007-2016).

Key Issues & Facts Analyzed

What is the position of China in global footwear market?

What are the advantages with China over other footwear markets?

How the market is likely to move in coming years?

Which is the fastest growing segment of footwear market?

What are the regional footwear production hubs in China?

What are the various growth prospects in market?

What are the key challenges to market?

Who are the various key players in market?

Key Players

This section provides brief business overview and financial status of key players in the Chinese footwear market, including Yue Yuen Industrial (Holdings) Ltd., New Balance Athletic Shoe and Nike Inc.

Research Methodology Used

Information Sources
Information has been sourced from books, newspapers, trade journals, and white papers, industry portals, government agencies, trade associations, monitoring industry news and developments, and through access to more than 3000 paid databases.

Analysis Methods
The analysis method includes ratio analysis, historical trend analysis, linear regression analysis using software tools, judgmental forecasting, and cause and effect analysis.

For further information kindly visit: http://www.bharatbook.com/detail.asp?id=74884

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Mexican Supplier Report

One of the largest contributors to the country’s economy has been the automotive industry. The industry has gained a strong position globally over the years and is expected to continue its contribution to the national economy. According to Banamex, in 2008, nearly 4% of the national GDP came from the automotive industry, while it contributed 16% to the manufacturing GDP. In 2008, automotive industry was the only manufacturing activity in the country that saw a double-digit growth and generated 20% of the total manufacturing exports from the country. ( http://www.bharatbook.com/Market-Research-Reports/Mexican-Supplier-Report.html )

At the same time, the industry has created job opportunities for almost a million people in the country, accounting for 13.5% of the total industrial employment. Nearly 55,000 people are employed with the OEMs and 433,000 in the auto component production sector. The automotive industry in Mexico is spread across the country. The automotive demand in the country is strong, with one million vehicles being sold per annum. The market is flooded with close to 40 brands and more than 300 different models of cars, including domestically produced and imported from outside markets.

Detroit Three have been the front runners of the industry. Nearly 54% of the total national production is from the nine plants operated by Chrysler, Ford and GM in the country. Post 1994, Detroit Three’s role in Mexico increased. At the same time, other OEMs such as Nissan and Volkswagen have also created their own market in Mexico. Both Nissan and Volkswagen have shifted certain production operations to Mexico, thereby creating ample growth opportunities for the auto parts suppliers.

Key chapters of the report :

Mexico – The Country
Mexico’s Growth Driver – Automotive Industry
Major Mexican Automotive Clusters
Mexico’s Competitiveness and Emergence of other Low-cost Countries
Outlook
Supplier Profiles

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Below is a letter from Mr. John L. Morgan, beneficial owner of approximately 7% of Lenox (LNX), to Ms. Susan E. Engel, Chairwoman and CEO of Lenox.

Dear Susan,

When your board offered me a directorship on September 18, 2006, we discussed the reasons that made it unacceptable. At that time, I reiterated that I could best serve the shareholders of Lenox Group by assuming a leadership role on the Board of Directors and playing an active role in formulating and guiding the strategic direction of the Company. Furthermore, I expressed my intention to not make changes in the management or Board of Directors. My views were based on information I had at that time.

The Board’s rejection of my offer to help the Company create a successful strategy has given me a different perspective. I now feel that the Board has decided to pursue a course of action that is not in the best interests of the shareholders and is a continuation of the strategies that have failed to create value over the past ten years.

The management team and Board of Directors continue to behave like the Company is a large, successful Company that has margin for making more mistakes. I do not agree. My offer to assist the Company in changing its strategy to benefit shareholders has been rejected although I proposed to work with the existing management and Board of Directors. You have made your position clear and I hope this letter will do the same for me and other likeminded shareholders.

Very truly yours,

John L. Morgan

The Ownership Situation

First, let me explain the ownership situation. The reporting persons are John L. Morgan, Kirk A. MacKenzie, Jack A. Norqual, and Rush River Group. Rush River Group is a limited liability corporation (LLC) of which Morgan, MacKenzie, and Norqual are members.

Rush River was formed in December 1998 in Minnesota and “its principal business activities involve investing in equity securities of privately owned and publicly traded companies, as well as other types of securities.” As far as I can tell, the only members of Rush River are the three aforementioned men: Morgan, MacKenzie, and Norqual.

According to a recent SEC filing, Morgan beneficially owned 6.1% of the outstanding shares of common stock in Lenox, Rush River owned 0.79%, MacKenzie owned 0.07%, and Norqual owned 0.07%.

Please keep in mind that this 7% stake in Lenox is controlled by Mr. Morgan; but, not Winmark Corporation (WINA), a publicly-held franchisor of retail stores. This is an important distinction to keep in mind (especially since Winmark is a public company).

Morgan is the Chairman and CEO of Winmark; MacKenzie is the Vice Chairman. However, their stake in Lenox has nothing to do with Winmark. In fact, last time I checked, Winmark did not have any material investments in marketable securities.

The reported position amounts to 989,300 shares of Lenox. Shares of Lenox last closed at $6.23 a share. So, the position would be worth a little over $6.16 million. Since Winmark only has a market cap of $126 million, I want to make it clear Winmark does not have a position in Lenox – Morgan does. He just happens to be the Chairman and CEO of Winmark. I hope this clears up any possible confusion about Winmark.

Lenox

Now, I can move on to discussing the truly interesting aspect of this news, Lenox itself.

Lenox is the result of a September 2005 merger between Department 56 and Lenox Incorporated. Prior to the merger, Department 56 was known for its “Village Series of collectible, handcrafted, lighted ceramic and porcelain houses, buildings and related accessories that depict nostalgic scenes”. That last sentence was taken directly from the company’s 10-K, simply because I couldn’t write a better description myself. I assume most of you have seen the series. Even if you haven’t, I’m sure you can imagine the concept of a little porcelain Christmas scene.

Obviously, the Lenox name is much better known than the Department 56 name. Therefore, when Department 56 acquired Lenox, it changed its name to Lenox.

In its 10-K, the company calls the Lenox acquisition a “transformational event”. This term is too often applied to mergers that are far from transformational. In this case, however, it’s a perfectly accurate description.

Whether the transformation is for better or worse is debatable; however, the fact that the merger has transformed the company is not debatable. To put the size of this transaction in perspective, consider this: Today, Lenox (the combined company) has a market cap of $88 million. In September 2005, Department 56 paid $204 million to acquire Lenox Group. Immediately, this should tell you two things. One, the acquisition was probably quite large relative to the existing business. Two, the combined company’s stock price has tanked.

Both of these statements are true. Even when shares of Department 56 were a lot more expensive, the Lenox acquisition was very large relative to the existing business when considered from the perspective of market cap, enterprise value, sales, and just about any other meaningful measure of the size of a business.

Obviously, the combined company’s stock price has been falling hard since the merger. After all, the enterprise value of the entire company is not much greater than the amount Department 56 paid for the Lenox business.

The market is assigning a value of close to zero to the newly acquired Lenox business. This is remarkable considering the fact that Department 56 rarely traded at a lofty multiple when it was a stand alone business. In fact, the company’s shares often traded at a P/E multiple in the high single digits or low double digits throughout the past decade.

The New Business

You probably already know what Lenox does. If you don’t, a quote from the company’s 10-K does a good job of explaining what the newly acquired business does:

“The company sells dinnerware, crystal stemware and giftware, stainless steel flatware, and silver-plated and metal giftware under the Lenox and Gorham brands. Dansk is the company’s contemporary tabletop, houseware and giftware brand. The company sells premium causal dinnerware and fine china dinnerware, giftware and collectibles under the Lenox trademark, and sterling silver flatware and sterling silver giftware under the Gorham and Kirk Stieff trademarks. The company believes that it is the largest domestic marketer of fine tabletop products.”

I’m sure you noticed a bad omen in the above paragraph. One of the company’s brands (Dansk) is described as the company’s “contemporary” brand to differentiate it from the other two brands. Obviously, having fine products that are not considered contemporary is a bit of a problem.

In fact, it may be a very large problem in the years ahead. Overall, it seems the market is moving away from formal dinning and towards more upscale casual dinning. This is not a new phenomenon; nor, is it likely to be a short-lived one.

On the other side of the scales, you do have the simple, undeniable fact that the company has one of the best brand names in its industry. It is also a big player in a very small industry. Those are both advantages that are difficult (if not impossible) to duplicate. For a $200 million business, Lenox has a lot of history – and perhaps, a lot of potential.

The Old Business

A big part of the problem with the performance of the company’s shares (both over the short-term and the long-term) has been the performance of Department 56. In 2005, sales from Department 56’s Village Series declined 21%, “which was consistent with the longer term trend” according to the company’s 10-K. In fact, sales had clearly been declining each and every year from 1999-2005. Furthermore, sales in 2004 were substantially less than sales in 1996. So, even though there wasn’t a continuous, straight-line decline in sales over the past ten years, the general trend for sales of the Village series has been decidedly negative for a full decade now.

To combat the “substantial attrition of the Gift and Specialty channel” the company has settled on two strategies intended to both “offset the decline of the Village business” and “to grow revenues long term”. Those strategies are “expanding the company’s channels of distribution outside its traditional Gift and Specialty channel” and “expanding the company’s product offering to include year-round gift products.” The former strategy sounds promising; the latter strategy sounds implausible.

Lenox is already moving to implement both strategies. In fact, the company made a small acquisition that should help expand Lenox’s year-round product offerings. But, I remain highly skeptical of attempts to transform the gift products business into anything other than a highly seasonal business.

The Acquisition

At the time it was announced, I thought the Lenox acquisition sounded like an interesting move for the company. Department 56’s operations looked lean; the operations at Lenox did not. Furthermore, the price paid for Lenox didn’t look unreasonable, especially when compared to the kinds of prices many public companies have often paid to make such large (”transformational”) acquisitions.

In September 2005, Department 56 acquired Lenox in a $204 million deal (including $7.6 million in transaction costs). Department 56 funded the acquisition “through a $275 million senior secured credit facility consisting of a $175 million revolving credit facility and a $100 million term loan”.

As mentioned earlier, the combined company adopted the more recognizable Lenox name.

Restructuring

As a result of the merger, the company closed approximately half of the stores belonging to its new Lenox subsidiary. In total, the company closed 31 Lenox retail stores. As of February 1st, 2006, this left the company with only 36 retail stores. Six stores were operated under the Department 56 name; the remaining 30 stores were operated under the Lenox name.

After the merger, the company consolidated some of its operations. For instance, Lenox sold its Langhorne, Pennsylvannia facility when it moved certain operations to Bristol, Pennsylvannia. The company has used the cash proceeds of such sales to pay down debt incurred in the Lenox acquisition.

New Concept Stores

Lenox plans to launch a new mall-based chain of stores that will sell all of the company’s brands (Department 56, Lenox, Gorham, and Dansk). The company plans to open three “All The Hoopla” stores during 2006. A fourth store will be opened in 2007.

Opportunities

The combination of Department 56 and Lenox presents several interesting opportunities. Perhaps most importantly, there’s the hope that Lenox will become a leaner operation. Aside from any cost-savings made possible by the merger, there is also the simple fact that Department 56 was always a leaner operation than Lenox, and that the management at the new company might be more adept (or more determined) to keep costs down.

There is also some promise to the idea of selling all of the company’s brands together. To a large extent, the distribution channels are similar. The “All The Hoopla” concept proves the company is committed to this bundling of its products. However, it’s hard to see how the company’s products are going to be much of a draw on their own. Is there really enough demand for these Lenox operated retail stores? The company’s current plans call for a very limited launch. So, the price of failure would not be very great. Obviously, a success here would greatly benefit the company in the long run.

Conclusion

Lenox is an interesting opportunity. The business looks very cheap based on averages of past sales, EBIT, pre-tax earnings, etc. However, Lenox is now an entirely different company. The old Department 56 business faces rapidly declining sales. Neither Lenox nor Department 56 looked like a very promising business at the time of the merger. Today, they don’t look a whole lot more promising together.

On the other hand, it’s important to look past the company’s recent results (which include a large write-off). It will take time to see the full effects of the merger. At present, it’s difficult to judge either company independently, because of the acquisition.

Still, this is clearly a cheap business by most measures. There are problems at Lenox (as there were problems at Department 56). But, if the business can be run right, it should reward shareholders who buy at today’s extraordinarily low levels.

Morgan’s letter presents both the hope that there will be change and the realization that such change will not be easy. Clearly, the company’s past performance has been unacceptable. The stock has never been as cheap as it is today; but, the problems have been just as bad.

Lenox offers an interesting opportunity for patient investors. Nonetheless, being a Lenox shareholder is certain to frustrate you even if it does eventually reward you.

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Article Marketing Distribution is an integral part of today’s internet marketing. The more articles you submit the more traffic and sales you get. Now would you like to discover magic tactics to increase sales with article marketing on one article directory alone? Read below. 

Article Marketing Distribution – How to do Profitable Article Promotion on One Article Directory? 

Many internet marketers believe that article marketing distribution means submission of different articles to tens or hundreds of sites. But did you know that you get the same or even more effective results with article marketing on 1 content directory alone? Now I know what question you have in your mind: 

How Can I get Maximum Sales With Article Marketing on only one article directory, without losing my time on others? 

• Focus 

It is important first to choose the highest traffic and high pagerank article marketing directory and to focus on it for a certain time. 

• Work Regularly  

You would work on a daily basis to publish on the site at least 3-5 unique and useful articles for your potential buyers. It will mean to get minimum 150 high pr, quality backlinks at the end of month. 

• Compete with top contributors on the article directory site.  

Try to find out the top author/marketer in your niche and compete with him through intensive article marketing distribution. Try to beat him both with quality and quantity of your work. Then you will rank first both on Google and in this content directory for all main keywords related to certain niche. 

Conclusion:  

Choose the right article directory to see real results from your article marketing distribution on a daily basis. The more articles you submit every day, the more traffic and sales you will get. 

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Fareed Zakaria GPS, CNN China’s Premier Wen Jiabao Author Adam Smith, “The Theory of Moral Sentiments” and “The Wealth of Nations”. capitalism socialism market economy ethics morality distribution of wealth china economy fairness stability michael moore a love story corporations

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Gaining an increase in market share may become necessary for a number of reasons. You may need to shift focus from one product line to another in the face of a declining market, you may wish to expand to fend off a market place squeeze or you may just be growing towards your planned capacity. Whatever the reason, you will need to form an acquisition strategy.

There are three ways to obtain an increase in market share –

1. Earn it.

2. Use competitive trading to buy it.

3. Acquire a competitor.

Each of the three approaches bring along its own strategy requirements and its own issues. Selecting the best approach depends entirely on circumstance.

Outperform the competition.

Earning market share by supplying a better product, better service, better support, better delivery is an honorable way of expanding a customer base. It is steady, progressive and undemanding in that production/purchasing is not subject to stresses caused by sudden up-shifts in supply/delivery.

Even so, there are issues. Attaining greater market share in this way takes time. Customers need to be won over and quality must never falter. Poor feedback on product, support or delivery from the market can seriously slow your expansion program.

Your competitors aren’t going to sit back and let it happen either. You will need to respond to continual strategy changes from the opposition that may include –

1. Aggressive pricing.

2. Customer loyalty rewards.

3. Improvement in their product/delivery/service.

You will need to cope with these attacks quickly as each arises in order to maintain market position and momentum. This will be expensive.

Buy market share with aggressive marketing.

Cutting your margins and pricing aggressively will probably return a broader customer base. Turnover will almost certainly rise, but profitability will suffer. One thing is certain. You must not allow quality to fall.

The sums must be right before you embark on this type of strategy. If you can reliably source raw materials at a much lower price, or if your production/value adding processes are very much more efficient than your competitors, it becomes a safe bet. Don’t, however, be lulled into the belief that competitors are incapable of tighten up their act. Your advantage may only be short lived.

In addition to efficiency improvements you may expect competitors to hit back with their own aggressive pricing and customer rewarding tactics.

Outright acquisition.

A strategy of outright acquisition is expensive in the short term, but every gain you make adds to your market share. If you handle the process well you keep the customer loyalty that went to the original supplier. That may well equate to the final cost being much lower than an aggressive marketing approach.

Acquisition needs thorough planning. You will need to carry out –

1. In depth market research on the target.

You need to know that their customer base is as good as they say it is.

2. Due diligence.

You need to know that the target is trading to the level claimed. If you are buying market share you won’t be too concerned about their product cost, but you will be interested in how much they spend to service their customers. Loyalty can die quickly in the face of perceived reduction customer support levels.

For a growing business, acquisition strategy may be the best way forward, but the planning must be extensive.

Sources –

http://www.b2binternational.com/acquisition%20research.html

http://www.b2binternational.com/whitepapers7.html

http://www.b2binternational.com/aquisitionresearchcasestduy.html

http://ideas.repec.org/a/bep/rlecon/2200611.html

© Copyright 2007

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In the eighth instalment of Money Box we look at the share market and explain how it works, how shares are bought and sold and how shares are valued.

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