Alibaba’s historic IPO, iPhone 6 goes on sale and the weekly roundup in tech and retail

News and commentaries

The highly-anticipated IPO of Alibaba is finally here under the ticker “BABA” at the NYSE. The offering price of the shares were at $68 yesterday, giving the company a market value of $168B and making this the largest US-listed IPO since 1995. The stock finally opened at $92.70, lifting market capitalization to $236B. You can read a live blog of the IPO here.

Infographic from Alibaba’s IPO filing with the SEC

Meanwhile, the iPhone 6 and 6 Plus goes on sale today, September 19, becoming available first in Australia. The devices are also available in: Hong Kong, Singapore, Japan, France, Germany, Puerto Rico, Canada and the United States. The new iPhone models are not available in mainland China while Apple waits for regulatory approval from the Ministry of Industry and Information Technology (MIIT).

Read on for this week’s most relevant news in tech and retail.

In tech:

  1. Larry Ellison, founder of Oracle, steps down as CEO but will remain as co-chairman and chief technology officer (CTO) of the business software company
  2. SAP, another business software company, acquires expense and travel management company Concur Technologies for $8.3B
  3. Apple’s iOS 8 and Google’s Android L updates will offer default device encryption (Android has offered optional encryption since 2011), which means that the companies will not be able to “unlock” phones on government requests
  4. Amazon introduces 6 new tablets and e-readers; pre-orders started Wednesday to arrive sometime in October
  5. Microsoft lays off 2,100 employees as part of a previously announced plan to reduce workforce by 18,000

In retail:

  1. Home Depot confirms data breach from 56 million cards in its cash register systems in US and Canada
  2. Earnings reports: Jewelry maker Richemont reports 5-month sales slide in Asia, 4% increase worldwide at constant currency rates; founder returns as chairman; Prada SpA first half profits down 21% on slowdown in Europe and Asia; Zara owner Inditex first half profits fell 2.4% while revenue grew 5.6% on aggressive expansion in Asia and Eastern Europe
  3. UK-based online fashion retailer Asos Group issues profit warnings, the third in 6 months; as US sales stall and sales in rest of the world outside Europe reverse
  4. Neiman Marcus Group acquires Munich-based online luxury site mytheresa.com for an undisclosed amount; Mytheresa.com has annual sales of $130M
  5. Jimmy Choo courts investors with a prospectus promising 10% annual sales growth  ahead of IPO decision

J. Crew’s rumored IPO

News and commentaries

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Back in early 2000s when I was in yachting, J. Crew was (probably still is) the go-to for the typical yachting uniform of white shirts and khakis. In a word, boring – unless preppy is the height of your sartorial taste.

Then, a few years ago in late 2010, a twenty something cousin of mine who dresses more hipster than preppy mentioned that J. Crew was her absolute favorite brand. Being in Montreal, Canada where the brand is absent meant I had to visit the store online to see what she meant.

Sure enough, the J. Crew that I knew was transformed: young, on-trend and completely wearable beyond Nantucket and the Hamptons. These changes could largely be credited to the leadership of Jenna Lyons as creative director and Millard “Mickey” Drexler as CEO. I remember Jenna Lyons as the one who wore a sweater and a maxi feather skirt to the 2011 Met Gala. If that’s not the epitome of cool and owning it kind of style, I don’t know what is. Fast forward to today and J. Crew has only grown bigger and has garnered a cult following. More importantly, that cult following translates to $2.4B in revenue last year, a 9% increase and a valuation of $5B.

If J. Crew IPO’s with the partnership of Lyons and Drexler intact, I would certainly bet on its success. But, there’s also a possibility that J. Crew is not going to IPO at all and instead get acquired at its current valuation by Japan’s Fast Retailing, the parent company of Uniqlo. Either way, it would be a nice exit for TPG Capital and Leonard Green & Partners who bought J. Crew for $2.8B in 2011. I’m wondering though, would an acquisition adversely affect J. Crew’s current leadership structure and company culture? Not to say that Fast Retailing does not know fashion. Its brands: Uniqlo, Helmut Lang, Theory, etc. have themselves good followings. Still, it would be interesting to see how this works out.