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January 2007

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Click here to view the gallery for this article EUROPEAN ECONOMY SAGS LONDON: The eurozone's economic growth slowed more than expected in the third quarter of 2006, according to the latest figures. Growth during the third quarter fell to 0.5%, from 0.9% during the previous three months, with stagnation in France offsetting strong figures from Germany. On an annual basis, growth across the 12 eurozone nations fell to 2.6% in the third quarter, from 2.7% in the second. While Germany saw 0.6% third-quarter growth, France's is expected to be at. Spain's growth was particularly impressive uring the third quarter, expanding 0.9% to reach a five-year high. Meanwhile, growth across the entire 25-nation EU also slowed in the third quarter. It dropped to an annual rate of 2.8% from 2.9% in the previous quarter, while on a quarterly basis it eased to 0.6% from 0.9%. WORKING MAN'S GAME REYKJAVIK: Icelandic billionaire and chairman of Landsbanki, Bjorgolfur Gudmundsson (above), is the main backer of the consortium which has bought struggling English Premiership football club West Ham for €125m. The takeover by WH Holding, led by Eggert Magnusson, the president of Iceland's Football Association, followed weeks of speculation about the club. Many expected it to bought by a consortium led by Kia Joorabchian, the Anglo-Iranian businessman who was instrumental in bringing the South American stars Carlos Tevez and Javier Mascherano to West Ham earlier this year. IT'S ALL ABOUT ME MADRID: Spanish leisure group Sol Melia Group has launched its ME by Melia brand with the opening of the boutique hotel ME Madrid Reina Victoria in the city's Plaza de Santa Ana. ME plans other similar hotels in Barcelona, Seville and Palma de Mallorca as well as Cabo San Lucas and Cancun. A partner in the venture is American nightclub entrepreneur Rande Gerber, whose company After Midnight will create restaurants and clubs in all the hotels. SPRINGER SPREE MUNICH: Axel Springer, the biggest newspaper publisher in Europe, wants to expand into television outside Germany. Springer has taken a 25% stake in Turkish broadcaster Dogan TV (corporate sibling of newspapers Hurriyet and Milliyet) and is in talks to buy a 25.1% stake in Polish television company Polsat. It is also preparing the launch of a French version of its flagship tabloid, Bild, the most widely read newspaper in Germany. CITY OF LIGHTS, CAMERA, ACTION PARIS: The mayor of Saint-Denis, Didier Paillard, has signed the construction permit for filmmaker Luc Besson's long-gestating Cinema City project, which would see soundstages, workshops, office buildings and other amenities built on a 65,000 m2 site. The Cinema City studio complex is expected to cost around €130m and will bring a much-needed economic boost to the rather depressed Parisian suburb. In May 2005, producer-entrepreneur Tarak Ben Ammar committed to move his post-production facilities to the site. Construction will take from 18 months to two years. FROM RICHES TO RICHES GENEVA: China's growing taste for luxury goods has boosted profits at Richemont, which counts Cartier and Alfred Dunhill among its roster of sparkling brands. The Swiss conglomerate saw profits for the first half of 2006 rise 22% to €645m, which it attributed to a sales surge of 64% in China, where rapidly growing incomes have upped demand for expensive items. Sales of Richemont's watches rose 14%, while overall jewellery sales increased 13%. Demand for Montblanc fountain pens was also robust, with sales up 24%. Losses at Alfred Dunhill were halved after sales rose 11%, while fashion label Chloe doubled its sales. Richemont also made a €274m profit on its 20% investment in British American Tobacco, up 6% on the same period last year. Despite the good trading news, Richemont has warned that future growth of watch sales could be hindered by too few watchmakers entering the industry. It said it was working with similar businesses to develop training programmes for aspirant watchmakers. EVERY DAY IS LIKE SUNDAY PARIS: Following the Germans relaxing shop opening hours, the French Parliament is set to consider special legislation to allow Sunday sales along the Champs-Elysées for the first time. Currently around one-third of the boutiques ozn the famous Paris boulevard must stay closed on Sundays, mostly because of opposition from the National Clothing Federation, made up of 55,000 shop-holders and boutique owners. Now the NCF has conceded that the Champs-Elysées was sufficiently unique to be turned into 'a free zone for a special clientele who would be largely made up of foreign visitors'. France's Sunday trading laws have been vexing for stores and customers. Currently stores able to claim participation in a cultural or sporting activity, may open. Last summer, Louis Vuitton won the right to keep open its flagship store on the avenue, partly by opening a small museum on an upper floor. M&S BACK ON THE MOVE LONDON: British retailer Marks & Spencer, which recently saw half-year revenue rise 11% and pre-tax profit rise by 32%, has confirmed it plans to add 25 to 30 international stores over the next few months. The company is moving into new markets such as Russia and India, and also plans to step up its web presence. Five years ago, with its UK prospects looking uncertain, Marks & Spencer retreated from overseas markets, notably offloading all its stores in France, for instance. There are still about 200 international Marks & Spencer stores, operated under licence by local retailers in a number of European, Middle Eastern and Asian countries. TELCO STILL GROWTH KING LONDON: Mobile communications businesses were the fastest-growing technology companies in 2006, owing to sustained convergence between media and telecommunications companies, a recent report concluded. The Fast 50 company survey, by professional services company Deloitte, found that 28% of the 50 fastest-growing companies in the UK and Ireland were in telecommunications. Deloite noted that if business use of mobile data services continues to grow at the current rate, it will soon become ubiquitous. RETURN OF THE SPECIAL RELATIONSHIP LONDON: After LSE boss Clara Furse rejected a 'final [takeover] offer'' worth £12.43 (€18.36) a share from Nasdaq, her New York-based rival, in November, a furious row broke out in the UK. Would US ownership hamper the UK exchange with onerous Sarbanes-Oxley regulation? Wouldn't it be far more logical for there to be a single pan-European bourse? The debate seemed to be resolved when big-hitter Stephen Green, group chairman of HSBC, declared that the future of the London Stock Exchange did not depend on its ownership. He went on to tell reporters that it was regulation that dictated the LSE's performance rather than the identity of its shareholders. That wasn't enough to convince those who fear the post-Enron regulatory environment that has clouded American corporate life – but it suggested that NASDAQ would succeed in its quest, having already built up a 29% stake in the LSE. FASHION VICTIM MILAN: Benetton's chief executive, Silvano Cassano, abruptly quit the company which celebrated its 40th anniversary last year. He had disagreed with the Benetton family, which owns a controlling stake in the firm, over the fashion retailer's plans to expand internationally. Benetton, whose annual revenues now nudge €2bn, recently announced plans to open dozens of new stores around the globe. It will shortly open its first store in Iran, and plans to have 10 stores in the country – where more than half the population is under 30 – by the end of this year. The company's chief financial officer resigned at the same time as Cassano, and Benetton's shares fell by almost 9% at the news. MOSCOW SHOWS ITS METTLE MOSCOW: In the biggest example so far of Russian corporations' growing international clout, the country's largest steel producer, Evraz Group, has announced it is acquiring US steel company Oregon Steel Mills for €1.75bn. The announcement came as rumours swirl that Russia's third-largest steel producer Severstal is poised to buy US Steel. The global steel industry is currently consolidating, as seen by the €26bn merger of Mittal and Arcelor, which will create the world's largest steel producer. Evraz has long been on the international expansion trail. Last year it acquired the Czech steel mill Vitkovice for €218m, as well as a 75% stake in Palini e Bertoli, an Italian steel mill. Oregon will enable Evraz to boost its share of company sales to the US market to 17% this year, up from less than 3% in 2006. The move enables Evraz to reduce its exposure to more volatile markets in Asia and the former Soviet Union. Meanwhile Russian miner Norilsk Nickel has revealed it is paying €408m for nickel assets from the US's OM Group. STALLION ON SCREEN MUNICH: Ferrari, the Italian sports car manufacturer, has signed a licensing deal with German video game company 10tacle Studios that will see the brand feature in a series of video games to be developed by both parties. 'The expansion of our racing portfolio is an important part of our strategy for growth,' says Michele Pes, chairman of 10tacle Studios, while Katia Bassi, head of licencing at Ferrari, comments: '10tacle Studios have proven repeatedly that they are capable of developing racing games at a level appropriate to Ferrari's leading position in the field.'


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