Sunday, 28 March 2010

Jamie Oliver aims to help kids.

CNN's Anderson Cooper sits down with celebrity chef Jamie Oliver to discuss his crusade to change the way kids eat.

FOOD FOR THOUGHT - Interpreting an image.




GEEKS are salivating with anticipation. On Saturday April 3rd customers, in America get their hands on Apple’s Ipad, a touch-screen device (rather like a large Iphone) that lets users search online, read electronic versions of books, play computer games and more. At least 190,000 units have been ordered in America. The Ipad becomes available in other countries later. The fate of the device is likely to matter to more companies than just Apple: a variety of book, magazine and newspaper publishers are watching anxiously to see if enough customers are willing to pay for digital access to their products. The success of other technologies, such as digital-music players, was built in part on the popularity of Apple products, such as the Ipod.

source: The Economist.

Vancouver.

Vancouver is a cosmopolitan and culturally diverse city set against a backdrop of ocean, mountains, forests and beaches.

Vancouver combines both natural beauty and exciting urban amenities including four-star hotels, gourmet restaurants and a buzzing nightlife. Ski in the morning, sail in the afternoon. Go hiking, kayaking, swimming and shopping, visit world-class attractions or take in some theatre, comedy, festivals or events.

A new Blackberry commercial.



by Lynden David Hall - All You Need Is Love


Love, love, love
Love, love, love
love, love, love, love,
love, love, love, love,

(Love) There's nothing you can do that can't be done
(Love) There's nothing you can sing that can't be sung
(Love 4x) Nothing you can say but you can learn to play the game
It's easy

(Love) Nothing you can make that can't be made
(Love) No one you can save that can't be saved
(Love 4x) Nothing you can do, but you can learn to be you
It's easy

All you need is love
All you need is love
All you need is love, love,
love is all you need

All you need is love
All you need is love
All you need is love, love,
love is all you need

(Love) Nothing you can know that isn't known
(Love) Nothing you can see that isn't shown
(Love 4x) No where you can be that isn't where you're meant to be,
It's easy

All you need is love
All you need is love
All you need is love, love
Love is all you need

All you need is love
All you need is love
All you need is love, love
Love is all you need

Love is all you need

Saturday, 27 March 2010

Twix new ad.

Reported Speech - Quiz

REPORTED SPEECH - EXPLANATION

REPORTED SPEECH

Reported Speech:

Click here to do the quiz, please.

Thursday, 25 March 2010

Latin America's unproductive economies.

Latin America's unproductive economies.
Mar 25th 2010 .
From The Economist print edition.


How public policies have promoted inefficiency.

Its economies may have improved recently, but much of Latin America has performed poorly over the past two generations. The gap in income per head between the region and developed countries has widened since 1960, while many East Asian countries that were poorer have leapfrogged ahead. The root cause has been Latin America’s slow—or even negative—growth in productivity, according to a new study by economists at the Inter-American Development Bank*.

Productivity growth—gains in the efficiency with which capital, labour and technology are used in an economy—is the measurement of economic development. It is true that most Latin American countries have not invested enough, or provided their people with a good enough education (though both these things are improving). But productivity growth means squeezing more output from the same inputs. And Latin America has been particularly bad at this. Why?

The short answer is that the typical Latin American firm is a small, inefficient service business and may well be operating in the informal economy.
Productivity growth tends to be higher in manufacturing and agriculture than in services. It also tends to be higher in large firms which benefit from economies of scale. And it is much higher in formal businesses, which can invest in innovation.

However, Latin American manufacturers are also much less productive than they might be. This is partly because clogged, inefficiently run ports, airports and other transport systems make freight costs unduly high—for example, it shockingly costs more to get goods to the United States from most Latin American countries than it does from distant China or Europe.
But 60% of Latin Americans work in service firms. Many of these businesses are held back by lack of credit and by public policies that give them little or no incentive to become bigger or to operate legally. Latin American tax codes are inordinately complicated: it takes an average of 320 hours per year for a firm in the region to file its tax paperwork, compared with 177 hours in rich countries. The IDB found that a disproportionate share of tax is paid by big companies. Simplified tax regimes for small companies have been set up in 13 of the 17 countries the bank studied. Perversely, that encourages them to remain small.
Only one in three Latin American workers is covered by social-security systems financed by payroll taxes. Governments have responded to this inequity by creating non-contributory pensions and other social programmes. As an unintended consequence, that means there is little incentive to leave the informal economy.

But not all is gloomy. In Chile productivity growth since 1960 has outpaced that in the United States. And since 2006 there has been “an upward trend” in productivity growth in the region as a whole, says Carmen Pagés, who co-ordinated the study. This has gone hand in hand with faster economic growth and an expansion of credit. Productivity growth in Brazil has surged recently: after being negative in the late 1990s, it rose to over 2% in 2007 and 2008 according to the Central Bank.
Economists say that productivity growth is the root cause of development. From the late-1970s to the early 2000s Latin America suffered a macroeconomic slump, accompanied by high inflation and the destruction of credit. Political instability—and expropriations of businesses—in some countries also discouraged firms from growing. It is hardly surprising that productivity suffered.

The achievement of economic and financial stability in the past few years has in turn seen productivity growth rise. The IDB’s study shows that it could rise faster still, boosting incomes, if the politicians take productivity into account when they draw up tax, social and public-investment policies. And the economic weight of services means it is not enough for the region to talk only about export competitiveness.


After all, productivity begins at home.




* The Age of Productivity: Transforming Economies from the Bottom Up, edited by Carmen Pagés, Inter-American Development Bank and Palgrave Macmillan.




Copyright © 2010 The Economist Newspaper and The Economist Group. All rights reserved.





FOOD FOR THOUGHT.

The world is getting older and older. Not the planet, but the people who live on it. A new report reveals the global population of older people is growing at its fastest rate ever. The United States Census Bureau calculated there were just over half a billion over-65s in 2008. Officials predict this number will more than double to 1.3 billion by 2040. Around 14 per cent of the world’s population will be retirement age. Researchers say the number of elderly will soon outnumber the young for the first time in human history. This will have a big impact on our societies, economy, and the way we live. An older population will push up pension and healthcare costs. The workforce will have to pay much higher taxes to look after more old people.


Many people believe that when an organ transplant takes place, parts of the donor’s personality travels with the organ. This is according to new research into people’s opinions of organ donation. Professor Bruce Hood from the UK’s Bristol University told a neuro-science conference that most people are strongly against receiving an organ from a killer. His test volunteers said they’d be very happy to receive an organ from a “good” person. Professor Hood said some of his patients believed they now had a part of the personality of their organ donors. He said this even included things like the memories and experiences of the donor. Other research has found that one in three organ transplant patients believe they have some aspects of their donor's personality.


Nike is finally making information available to the world about its sweatshops. It has put a detailed 108-page report on the Internet of its 705 worldwide factories. For many years, human rights groups have attacked Nike for the low pay and terrible working conditions in these factories, and for the use of child labor. Now Nike wants to come clean with this report and is trying to tell the truth. It says that over half of its employees in Asia work more than sixty hours a week and have no day off. Up to fifty per cent of workers cannot drink water or go to the toilet when they want. Besides, a quarter of workers receive less than the legal minimum wage, even though Nike makes huge profits. Michael Posner, executive director of Human Rights First, praised the report as “an important step forward” but asked the important question: “What is Nike doing to change the picture and give workers more rights?”


Researchers have blamed Hollywood movies for an increase in unsafe sex, smoking and drug use. A team from two Australian universities analyzed sex and drug scenes in the most popular movies of the last 20 years. The team found almost no scenes in which actors talked about sexually transmitted diseases, AIDS or birth control. The report said many movies showed drugs and smoking as a normal way to relax. Lead researcher Dr. Hasantha Gunasekera warned: “The social norm being presented is concerning [because of] the HIV and illicit drug pandemics in developing and industrialized countries.” The researchers reported the James Bond movie Die Another Day and the thriller Basic Instinct, in particular, gave people the wrong message about unsafe sex. Both movies contained many scenes of unprotected sex with new partners, without condoms or talk about AIDS or unwanted pregnancies. The study also found there were few movie scenes showing the dangers of drugs. Dr. Gunasekera suggested Hollywood should be more responsible when it shows behavior that is seen and copied by billions of people around the world.

TOEFL - ESSENTIAL WORDS - PART 1

TOEFL - ESSENTIAL WORDS - PART 2

Study English at NYU.

American Language Institute.


ENGLISH AS A SECOND LANGUAGE.


The Intensive Program in American English and Orientation, offered through NYU’s American Language Institute (ALI), is designed for beginning to high-intermediate students who wish to learn English in the shortest possible time. Study grammar, reading, writing, and build your vocabulary and comprehension. Practice speaking and understanding American English. Participate in extracurricular activities such as tours, cultural events, and conversation hours.






Other intensive courses are available this summer at all levels of English language proficiency. College-preparatory writing courses are offered for advanced students planning to attend American universities. Specialized courses are also available: Accent Correction, Speaking With Confidence and Fluency, and Business English (oral and written). Contact the American Language Institute for details.






American English and Orientation.


All sessions:


Monday–Thursday, 9 a.m.–12:05 p.m. and 1–2:45 p.m.




Summer Session One:


May 18–June 25, 2008 / $2,510 .




Summer Session Two:


June 29–August 6, 2008 / $2,510 .






12-Week Intensive Program in American English:


May 18–August 6, 2008 / $4,000 .






American English in New York: Culture and Conversation .


Monday–Friday, 9:30–11:55 a.m. July 20–August 7, 2008 / $930 .


This course is designed for tourists and others who want to learn English or improve their English language while exploring the cultural resources of New York City.






WHO SHOULD ENROLL:


These courses are designed for international students enrolled in any NYU Summer Intensive Program or others who want to improve their English speaking, reading, or writing skills.






REGISTRATION INFORMATION .


Students must register through an American Language Institute (ALI) advisor. Do not use the registration forms provided on this website, or in the back of the brochure. Contact ALI as listed below.




Enrollment is limited, so register early to ensure your place.
Contact Information:


American Language Institute


NYU School of Continuing and Professional Studies


48 Cooper Square, Room 200


New York, NY 10003


Phone: (212) 998-7040


Fax: (212) 995-4135































Wednesday, 24 March 2010

Movie Industry debates DVD releases.



Movie industry debates DVD releases.



By Tim Masters Entertainment correspondent, BBC News.


A hot topic in Hollywood right now is how long cinema audiences should wait until they can watch a movie on DVD.
The subject has been high on the agenda at the ShoWest convention in Las Vegas this week as the industry deals with the impact of home cinema systems and changing viewer habits.
The issue was in the spotlight last month when the Odeon cinema chain threatened to boycott Disney's Alice in Wonderland in the UK, Irish Republic and Italy.
Disney wanted to release Tim Burton's 3D fantasy on DVD at the end of May - three months after it opened in cinemas.
In the UK, the usual window for theatrical release is 17 weeks. Ten years ago the gap was six months.
Odeon reversed its decision after reaching "an enduring agreement" with Disney.
But the reduced gap has worried some cinema owners who fear that it will dent ticket sales as film fans wait for the DVD instead of paying for the big screen experience.
In a speech at ShoWest, Michael Lynton, chairman of Sony Pictures Entertainment, said the theatrical window was important, but the industry needed to adapt.
"Showing films in theatres is what makes a movie a movie," he said. "It's what makes stars stars. It's what makes films famous. It's what makes the public pay attention."
But he added: "It is clear from the changing economic model of our industry that we're going to have to re-evaluate the way in which the current window structure operates.
"To meet audience demand for entertainment when and where they want it, and to keep ahead of the pirates who will fill any gap, we've all got to be open to experimenting with new and different windows..."
According to Screen Digest, the "burn rate" of 3D films is a lot slower than 2D films - they continue to make money at the box office for a longer period. Nearly 30% of revenues are made after week four, compared to 16% on 2D films.
"What we've seen with Up and Avatar was the burn was far longer and this is almost irrespective of the number of theatres they are being shown in," says Mr Cooper.
This week, Twentieth Century Fox announced that the 2D DVD and Blu-ray version of Avatar would begins its global release on 21 April.
James Cameron's 3D sci-fi masterpiece was released in cinemas in December and is the highest grossing movie of all time, taking over $2.6bn (£1.7bn) globally.
Meanwhile, Alice in Wonderland has taken $400m (£262.4m) worldwide after just two weekends.
As well as cutting down on piracy, another reason why studios would like to see DVDs on the shelves sooner is to cut marketing costs.
"While it is in the cinema, the film acts as a very powerful marketing tool," says Mr Cooper. "That is a crucial part of the mix - the studios are trying to cut down on expenditure, now that package media sales are in decline worldwide."
Many cinemas have invested huge amounts of their own money in improving the cinema-going experience, most recently through digital 3D. Without a clear window between a film's theatrical release and its release on other platforms, such as DVD, that investment is at risk.
"Significant changes to the release window could cause a marked reduction in cinema admissions, particularly for those smaller operators who can only play a film several weeks after it is released.
"Hundreds of cinemas up and down the country would be put at risk by any significant reduction in admissions," the CEA says.
Unlike the UK, France has a more rigid model concerning DVD releases. DVD, Blu-ray and digital video-on-demand releases are available four months after the cinematic release.
Screen Digest's Richard Cooper says: "This is one of the few places where there is an officially mandated release window, there's some very firm legislation in place in France. Everywhere else it is by negotiation."
And while the debate about DVD release windows goes on, a further element in the mix is the dawn of 3D television.
3D sets are already on sale in the US, and manufacturers hope to launch their products in the UK and Europe over the next couple of months.
Sky rolls out its 3D service to customers later this year.
"3D in the home is coming," says Mr Cooper, "but those TV sets are going to be a bit more expensive than the standard top of the range 2D HD TVs - and if people want to watch 3D films it is a question of buying into a 3D enabled Blu-ray player."



Story from BBC NEWS.

Sunday, 21 March 2010

Retail versus e-tail in America.

Retail versus e-tail in America


November 26th 2009
From The Economist print edition

Bricks-and-mortar shops struggle to win customers back from virtual ones.

E-commerce holds particular appeal in hard times as it enables people to compare prices across retailers quickly and easily. Buyers can sometimes avoid local sales taxes online, and shipping is often free. No wonder, then, that online shopping continues to grow even as the retail shrinks. In 2008 retail sales grew by 1% in America and are expected to decline by more than 3% this year, according to the National Retail Federation, a trade body. In contrast, online sales grew by 43% in 2008 to over $541 billion and are predicted to grow by 31% in 2009, according to Forrester, a consultancy.
Online sales now account for 6% of all retail sales in America (up from 5% in 2008) and that figure is expected to reach 8% by 2013. E-commerce is also growing in Europe and Asia, where online sales in 2008 totalled $60 billion and $40 billion, respectively. In Britain, internet shopping now accounts for nearly 4% of total retail sales, according to Planet Retail, a research firm.
Online-only shopping sites such as Amazon and eBay, two e-commerce giants, have grown. Amazon’s sales rose to around $5.5 billion in the third quarter of the year, up by almost 30% from a year before. Wishlists, invented by Amazon, does make life easier for customers in doubt.
The range of items available online is also growing. Amazon has started selling groceries. Consumer-goods companies such as Procter & Gamble (P&G) are encouraging the sale of things like diapers and laundry detergent online. At the opposite extreme, the internet is also being used to sell luxury goods. Fabergé, a jewellery-maker known for its gem-encrusted eggs, relaunched in September. It will not open any shops but will instead operate only online.

The change in spending to the internet is good news for companies like P&G that lack retail outlets of their own. But it is a big concern for brick-and-mortar retailers, whose prices are often higher than those of e-tailers, since they must bear the extra expense of running stores. Happily, however, conventional retailers are in a better position to fight back than last year, when overstocking forced them to resort to ruinous discounting. Inventories are about 15% lower this year. Some big retailers, such as Saks and Target, have recently reported rising revenues and margins.
The most obvious response to the growth of e-tailing is for conventional retailers to redouble their own efforts online. The online arms of big retailers are performing well, on the whole. Saks, for example, saw online sales rise 9% in the nine months to the end of October while sales in its stores fell by 19%. The company expects online growth to outpace sales in stores for the future, says Stephen Sadove, its boss.
The concept of “multichannel” shopping, where people can buy the same items from the same retailer in several different ways—online, via their mobile phones and in shops—is gaining ground, and retailers are trying to encourage users of one channel to try another. Growing online traffic may actually increase sales in stores too.
According to a spokesman for Macy’s, a department-store chain, every dollar a consumer spends online with Macy’s leads to $5.70 in spending at a Macy’s store within ten days, because consumers learn about other products online and come into stores to look them over before buying them. Many online retailers offer tools that let people locate the nearest outlet that has a given item in stock.

Retailers are also trying making shopping seem fun and exciting to cheer up the economic gloom. One common tactic is to set up “pop-up” stores, which appear for a short time before vanishing again, to generate a sense of novelty and urgency.
Shoppers are increasingly looking for an “experience” when they go to stores, says Jack Anderson of Hornall Anderson, a branding and marketing firm, and are no longer interested in purely “transaction-based bricks and mortar stores”. Apple, which encourages customers to try out its devices in its stores, is considered a pioneer of this strategy, and has attracted many imitators. The Walt Disney Company, for example, is rumoured to be redesigning its stores to attract shoppers looking for entertainment, with new features such as “magic mirrors”, which will allow children to play with Disney characters.
Stores are also trying to seduce customers by offering services that are not available online. Best Buy, a consumer-electronics retailer, has started selling music lessons along with its musical instruments. Lululemon athletica, which sells sports clothes, offers free yoga classes. The idea is to bring people back to its shops regularly, increasing the probability that they will develop the habit of shopping there.

source: The Economist Newspaper and The Economist Group. All rights reserved.

Mentors make a business better.

March 20th, 2010

Mentors Make a Business Better

Candidates have headhunters and coaches to help them, and now they have one more professional: a mentor


By Emily Keller

When lawyer Mary Speth went for an interview four years ago at
Jaburg Wilk in Phoenix, she told the firm's founder and managing partner, Gary Jaburg, she'd be more comfortable to take the job if he would be her mentor. Jaburg agreed.

Speth and Jaburg's relationship, which consists of two monthly meetings for 30 minutes to an hour each, helped Speth improve her marketing and networking efforts to attract more sophisticated clients. It has also helped increase her efficiency: She estimates she spends 90% of her time working directly for clients, making more money for the firm.
"It's never too late to have a mentor," says Speth, 43, who practiced law for some 20 years. "If there's an area in your career or your personal life you want to improve, don't think it's too late."

For workers who would like to change direction in their industry, climb to the next level, or adjust to a carrier change or structural change at their company, management experts say finding a mentor could be their best transitional tool.
Companies looking to promote a diverse workforce often encourage their managers to be mentors—the teaching can go both ways. As the employee is often younger, he or she can help update the mentors about new tendencies in the industry or give them insight into another generation.

"If you're still active and your company wants to market to younger people, what better opportunity than to sit with a younger person?" asks Scott Allen, a consultant on social networking and building business relationships online, and an active mentor. "You will get insight sitting there with one-on-one face time that no market research report could ever give you."
Successful mentorship can be in any number of forms: online or in-person, in both formal and informal settings, on a temporary or long-term basis, and between individuals or in groups.

What is essential, experts say, is direction, dedication, and openness.
"One of the biggest problems we see is that people will say having a mentor is a great idea and they'll have lunch or coffee a few times, but without committing to goals, a lot of relationships will just go away," says Chris Browning, vice-president of operations and client services for
Triple Creek Associates, which creates Web-based mentoring programs.
So what makes a good mentor? Asking the right questions is the key, but having all the answers is not expected. "Your mentors shouldn't tell you what your goals are, they should just ask you what your goals are," says Speth.

The benefits are many. In addition to improving managerial skills, company mentorship programs may also help in recruitment. "More and more people are attracted to organizations that help them grow and learn," says Bell. "For the purpose of talent attraction and talent retention today, mentoring is a vital part."
Bell notes that mentoring can teach life skills such as the ability to give and receive feedback, and promote self-reflection.


Source: BusinessWeek.com

QUIZ: Face2Face Pre-Intermediate

Face2Face Pre-Intermediate on PhotoPeach

Quiz - Face2Face Intermediate

Face2Face Intermediate on PhotoPeach

Saturday, 20 March 2010

How hotel music is made.

A music consultant travels the globe customizing luxury hotel playlists.


Market Leader - Intermediate - Trends

Click here to do the exercise, please.

Market Leader - Pre Int - Unit 1

E-mail:

Do the exercise 1 here, please.

Do the exercise 2 here, please.

Telephoning:

Do the exercise 1 here, please.

Do the exercise 2 here, please.

FACE2FACE Intermediate - Unit 3

Face2Face Intermediate - Unit 3

1) Key words:

retired
chairman
profits
devices
foundation
charity
developing countries


Do the exercise here, please.


2) Key words:

socialise
actually
what about you?
quite a lot
stay in
telly

Do the exercise here, please.

Work problems - Face2Face Pre-Intermediate

Face2Face Pre-Intermediate - Unit 2

Key words:

work problem
pay increase
insurance
workload
salary increase
valuable

Listening - click here, please.

Friday, 19 March 2010

QUIZ: REPLIES

QUIZ: ASK ME THE QUESTION!

Bullet trains in California.

CNN's Casey Wian takes a look at whether bullet trains will actually save time and money.

Quiz: Review of Intermediate Face2Face

Review - Unit 1 to Unit 9


Private-equity managers face a difficult outlook




Less debt, more charm

Mar 18th 2010

From The Economist print edition


Private-equity managers face a difficult outlook


THE locusts went hungry in 2009. The private-equity industry managed just $81 billion of buy-outs, compared with more than $500 billion in 2007. Indeed, almost anything that could go wrong for the industry last year did so, as a recent report from Bain, a consultancy, makes clear.
Private equity has prospered for most of the past 25 years thanks to a favourable combination of circumstances: easy access to cheap credit, rising asset prices, a relatively stable economy and a friendly regulatory environment. But credit was neither available nor cheap last year. The industry raised just $20 billion of new loans in 2009, perhaps because managers were unwilling to pay double the spread (or excess interest rate) they had paid in the middle of the decade.
Equity prices did rebound last year but that was a double-edged sword. The result was that even those private-equity firms with access to capital found that deals were not as cheap as they might have hoped. Nor were markets quite strong enough for managers to offload the companies they had acquired earlier in the decade. Private-equity firms realised only $68 billion last year, down from $324 billion in 2007.


The lack of “exits” from investments had a further knock-on effect. When private-equity managers sell companies in their portfolios, they distribute the proceeds to their clients, known as limited partners (LPs). These distributions allow the LPs to invest in new private-equity funds. In addition, many LPs are pension funds or endowments which have target allocations to private equity in their portfolios. Because the declared returns of private-equity managers outperformed public markets in the crisis (something that may have more to do with the way portfolios are valued rather than any inherent superiority), many LPs found their weighting to private equity reached its maximum allocation. With distributions also low, LPs were unable to sign up for new funds. The industry raised just $248 billion in 2009, down from more than $600 billion in each of 2007 and 2008.
The good news, as Bain points out, is that some managers still have plenty of “dry powder” left, having raised funds in the boom years. Around $1 trillion of uninvested capital could be put to work. The bad news, from the managers’ point of view, is that with debt harder to get hold of, more of this capital will have to be invested in the form of equity. That means gross returns will be lower than in the golden days of the industry when internal rates of return reached 30-50%.
Another big problem is the refinancing hump that faces the industry between 2012 and 2014, when Bain estimates that some $460 billion of loans will need to be rolled over. The investor base that originally bought this debt—the managers of collateralised-loan obligations (CLOs), specialist funds that purchased leveraged buy-out loans—will not be able to help, as the market for new CLOs has collapsed in the wake of the credit crunch.
Many of these loans relate to deals done in the boom conditions of 2005-07, when prices were high and companies ended up being financed by too much debt. There may still be bad news to come from those deals. Banks have been reluctant so far to force problems into the open by adhering to the strict terms of debt covenants—they have little desire to create more write-downs on their stretched balance-sheets.
The final factor to throw into the mix is the effect of tighter regulation. European politicians postponed debate on the Alternative Investment Fund Managers directive this week
but the industry is still worried about the legislation that will finally emerge from the Brussels sausage machine.

To offset all this, the industry needs a charm offensive. It needs to show, both to investors and to politicians, that its returns are based on something more than exploiting cheap finance and the tax-deductibility of interest payments. And it needs to show that it can manage companies for growth, not just cost-cutting.
Of course, many private-equity fund managers would argue that academic studies already demonstrate they have such virtues. The difficulty, at least on the European side of the Atlantic, is that there are very few Googles—high-growth, well known businesses that can trace their initial success to private-equity or venture-capital backing. And in a slow-growth economic environment, it will be very difficult for the industry to start generating such examples in the next few years.


Copyright © 2010 The Economist Newspaper and The Economist Group. All rights reserved.








A big takeover brings cheer to gloomy fashion retailing





PVH buys Tommy Hilfiger Back in style



Mar 16th 2010 NEW YORK


From Economist.com



A big takeover brings cheer to gloomy fashion retailing



FOR the past two years retailers have experienced poor sales, particularly of high-end items. So it was welcome news that on March 15th, Phillips-Van Heusen (PVH), a company that markets over a dozen fashionable brands such as Izod and Calvin Klein, announced that it would buy Tommy Hilfiger, a designer clothier, for $3 billion, from Apax Partners, a private-equity firm. The price tag is thought to be one of the highest yet paid for a clothing company.
Adding Hilfiger to its brand portfolio will make PVH one of the largest firms in the fashion trade, with around $4.6 billion in annual revenues. Most of PVH’s existing brands specialise in dress shirts, ties, sportswear and shoes. To this it now adds Hilfiger’s broad range of expensive casual wear—whose style is described as “classic American cool”, by Fred Gehring, its boss, who will remain in charge.
PVH is attracted to Hilfiger because of its profitability, analysts say. It has managed to stay relatively healthy through the recession, particularly compared with other desirable brands. Hilfiger’s global sales rose by 3.5% in the six months to last September, while other comparable labels, such as Abercrombie & Fitch, suffered declines. Helping Hilfiger to weather the tough times was an exclusivity deal it struck with Macy’s, in which the department-store chain became the only retailer in America, other than Hilfiger’s own branded stores, to sell its clothing. This spared Hilfiger from having to negotiate pricing and inventory with a variety of retailers.
The downturn has taught luxury-goods companies not to focus on only one market
Hilfiger also has something that American-based PVH desperately needs: global reach. Until now, only around 10% of PVH’s sales have been outside the United States, reckons Eric Beder of Brean Murray, Carret & Co., an investment bank. In contrast, 50% of Hilfiger’s sales are in Europe and 10% are in Japan. PVH also hopes to take advantage of Hilfiger’s popularity and distribution channels in Europe and Asia to pursue growth for its other brands. If the economic downturn has taught luxury-goods companies anything, it is that they should not focus on only one market.

Consumers in Asia offer particular hope to these firms, which are desperately trying to broaden their customer base while keeping prices high.
PVH’s acquisition of Tommy Hilfiger has aroused widespread interest, because it is a sign of life in an ailing industry. Analysts are predicting that more deals will follow this year. The cutbacks fashion companies have made in the past two years have left some of them with cash to spend on takeovers. For example, Hanesbrands, a consumer-goods firm best known for its T-shirts and underwear, has stated publicly that it is interested in buying other firms.
The recession has been fatal for some big retailers, like Mervyns, a department-store chain, and the survivors are being more conservative about what, and how much, they stock. Fashion-brand companies have found that the more diverse their portfolios, the more negotiating power it gives them when trying to get their merchandise into stores. Having a broad range of well-known labels means that they can offer retailers exclusive combinations of merchandise from their various brands.
This proposition is especially attractive to department stores, as they seek to differentiate themselves from other retail outlets and win back a loyal following. Lewis Paine of GfK Group, a market-research firm, says smaller branded-goods firms are struggling to get the exposure at stores that they once did, and their sales may suffer as a result. Some will make attractive bid targets for bigger firms like PVH, which are looking to pick up established brands at good prices as the recession ends.



Copyright © 2010 The Economist Newspaper and The Economist Group. All rights reserved.












Watch the video here, please.

Tuesday, 16 March 2010

Facebook traffic tops Google




Facebook traffic tops Google for the week

By Julianne Pepitone, staff reporter
March 16, 2010


NEW YORK (CNNMoney.com) -- Facebook topped Google to become the most visited U.S. Web site last week, indicating a shift in how Americans are searching for content.

Web analysis firm Experian Hitwise said Monday that the social networking site surpassed Google to take the No. 1 spot for the week ended March 13.

"It shows content sharing has become a huge driving force online," said Matt Tatham, director of media relations at Hitwise. "People want information from friends they trust, versus the the anonymity of a search engine."

Facebook accounted for 7.07% of U.S. Web traffic that week, while Google (GOOG, Fortune 500) received 7.03%. The study compared only the domains Facebook.com and Google.com -- not, for example, Google-owned sites like Gmail.com.

Though the traffic levels were close, Facebook's year-over-year growth far outpaced Google's that week. The number of visitors to Facebook spiked 185% compared with the same period last year, while Google's traffic climbed just 9%.

"It's definitely a big moment for Facebook, even though they beat by a small margin," Tatham said. "We've seen it coming for quite a long time."

Facebook had never before beaten Google over a full weeklong period, though it has been the most visited site on recent holidays: Christmas Eve, Christmas Day and New Year's Day. Facebook was also the top site on the weekend of March 6-7.

But Tatham noted that when he added up traffic on all Google properties like Google Maps and YouTube, the company's sites comprised 11.03% of visits. Yahoo (YHOO, Fortune 500) was second with 10.98%.

Google.com had been the No. 1 site each week since Sept. 15, 2007, when ironically it passed another social networking site, MySpace.com, in order to take the crown.

Of course, the MySpace connection could be a bad omen for Facebook. MySpace enjoyed dominance on the social networking scene for years until it saw traffic plummet following Facebook's rise.

"By nature, the Web is ever-changing," Tatham said. "The Internet can be a fickle crowd."

source:
http://money.cnn.com/2010/03/16/technology/facebook_most_visited/index.htm?cnn=yes

Advances in pain relief.



Advances in pain relief : Agony column



Mar 11th 2010


From The Economist print edition


Body, mind and genes all play a role in influencing the perception of pain



PAIN, unfortunately, is a horrible necessity of life. It protects people by alerting them to things that might injure them. But some long-term pain has nothing to do with any obvious injury. One estimate suggests that one in six adults suffer from a “chronic pain” condition.
Steve McMahon, a pain researcher at King’s College, London, says that if skin is damaged, for instance with a hot iron, an area of sensitivity develops around the outside of the burn where although untouched and undamaged by the iron the behaviour of the nerve fibres is disrupted. As a result, heightened sensitivity and abnormal pain sensations occur in the surrounding skin. Chronic pain, he says, may similarly be caused not by damage to the body, but because weak pain signals become amplified.
This would also help explain why chronic pains such as lower-back pain and osteoarthritis fail to respond well to traditional pain therapies. But now an entirely new kind of drug, called Tanezumab, has been developed. It is an antibody for a protein called nerve growth factor (NGF), which is vital for new nerve growth during development. NGF, it turns out, is also crucial in the regulation of the sensitisation of pain in chronic conditions.
Kenneth Verburg, one of the researchers involved in the development of Tanezumab at Pfizer, says it is not exactly clear what role NGF plays in normal physiology, but after an injury which involves tissue damage and inflammation, levels of NGF increase dramatically. NGF seems to be involved in transmitting the pain signal. As a consequence, blocking NGF reduces chronic pain.
Tanezumab must still complete the final stages of clinical trials before it can become a weapon in the toolkit for reducing human suffering. But unexpected pains do not always come from the body. According to Irene Tracey, a pain researcher at the University of Oxford, how pain is experienced also depends upon a person’s state of mind. If successive patients suffer the same burn, the extent to which it hurts will depend on whether one is anxious, depressed, happy or distracted.
Such ideas are being explored with brain scans which suggest that even if a low level of pain is being sent to the brain, the signal can be turned up by the “mind” itself. Indeed, patients can even be tricked into feeling pain.
In one experiment volunteers were given a powerful analgesic and subjected to a painful stimulus—which, because of the analgesic, they could not feel. Then they were told the drug had worn off (although it had not), and subsequently complained that the stimulus hurt.
People can, therefore, feel pain simply because it is expected. They can fail to feel pain for exactly the same reasons, for example when they are given placebos or are distracted. But although pain may be subjective, that does not mean the final experience is controlled solely by the mind.
A recent paper in Proceedings of the National Academy of Sciences has shown that genes play a role in determining sensitivity to pain. One gene, known as SCN9A, codes for a protein that allows the channels along which nerve signals are transmitted to remain active for longer and thus transmit more pain signals. It seems likely that this protein will attract a great deal more analgesic research. Variations in SCN9A may also explain why some patients prefer different classes of painkillers.
Although pain may be a horrible necessity, there is no doubt that humanity could cope with far less of the chronic sort. Understanding how the mind, the body and people’s genes interact to cause pain should bring more relief.



Copyright © 2010 The Economist Newspaper and The Economist Group. All rights reserved.









The euro's troubles







The euro's troubles

Rebuilding Greece's finances

Feb 4th 2010
From The Economist print edition


The best answer is to bring in the IMF




SINCE the launch of Europe’s single currency, there have been theoretical worries about profligacy. The main fear was that free-spending countries (ie, Italy) might borrow excessively and pass either higher interest costs or the bill for a bail-out on to their sober, frugal brethren (ie, Germany). Eleven years after the euro’s birth, as Greece skids towards disaster, those vague fears have become an urgent question of policy.

The first attempt to deal with profligacy, the comically misnamed stability and growth pact, was never going to work. Neither the threat of fines on miscreants unable to afford them nor the euro area’s ban on bail-outs was credible. Yet in the past few months Greek bond yields have widened spectacularly against German ones, as lenders have rightly begun to ask what plans there are for euro-area countries in trouble—and, in the silence that followed, to fear a sovereign default.

What should be done? The aversion of most euro-area countries to a bail-out is understandable, even laudable—nothing would encourage reckless spending like the knowledge that other countries were ready to step in. Greece is especially undeserving. Although some of its problems have been brought on by global recession and by speculators, almost all the blame lies at home. Blatant Greek fiddling with the national accounts to disguise government borrowing has shot to pieces the country’s credibility, both in the markets and with other euro-area members. Deep structural weaknesses in the Greek economy have been left to fester. For a decade or more Greece has lived far beyond its means. Savage austerity is now inevitable. Yet, although the newish Socialist government of George Papandreou has promised to reduce borrowing below 3% of GDP by 2012, that may prove too unpopular to carry through.

A messy Greek default would harm almost everybody. As markets and governments know only too well, behind Greece stand others: Portugal, Ireland, Spain and even Italy, the world’s third-biggest sovereign debtor. Hence the selfish case for other euro-area countries to help. There is plenty of money around. The EU can advance structural-fund aid that is due to be paid in future years. The European Investment Bank can lend more. There may even be scope for a direct EU loan (but not one from the European Central Bank, which under the Maastricht treaty should not bail out euro-area governments).

The harder question is how to ensure that any help does not undermine reform—that it comes with conditions that promote sound policies, including deep budget cuts and structural reforms. What Greece needs is an outside agency to urge the government on and stiffen its resolve to face down protests if necessary. The answer is to turn to the IMF.

Many in Greece (and the rest of Europe) see calling in the IMF as a humiliation, for the euro as much as for Greece. They also fear stringent IMF conditionality. Yet stringency is just what is needed. In principle the European Commission could monitor performance and impose conditions (or a new European Monetary Fund might do so). But because Greece is a full member of the EU and the euro, any European lender would find it hard to convince markets that it could hang tough against political pressure and social protests. In contrast, the IMF is independent, can afford to be unpopular and has experience of bailing out indebted governments that nobody in Brussels (or Frankfurt) shares. It is, moreover, already dealing with other EU countries such as Hungary, Latvia and Romania.

It is true that the fund’s role in a single-currency zone would be to help avert a sovereign-debt crisis, not to offer classical balance-of-payments support. But its expertise in drawing up austerity measures and reform programmes would be just as valuable. It may be embarrassing for a euro member to need the fund’s assistance, just as it was for Britain in 1976. But the Greeks should be ready to turn to the IMF before they lumber themselves with an even worse fate.





Copyright © 2010 The Economist Newspaper and The Economist Group. All rights reserved.

Friday, 12 March 2010

Quiz: Present Perfect or Simple Past?

Brazil's Tiger Economy Roars

While the U.S. economy continues to slump, Brazil is enjoying an economic boom. CNBC's Trish Regan reports from the capital city of Sao Paulo on what's driving the country's growth.

Retail sales climb in US

March 12 (Bloomberg) -- Sales at U.S. retailers unexpectedly climbed in February as Americans braved blizzards to get to the malls, signaling consumers will contribute more to economic growth. Purchases increased 0.3 percent, the fourth gain in the past five months, Commerce Department figures showed today. Bloomberg's Betty Liu and Michael McKee report.

(Source: Bloomberg)


Ads that watch you.

Employment outlook


Employment outlook
Mar 11th 2010 From The Economist print edition

In 27 out of 36 countries surveyed by Manpower, an employment-services firm, more companies said they expected to add workers in the three months to the end of June than said they expected to reduce their workforce. The difference between the proportion of hirers and firers was highest in Brazil and India, at 38 and 36 percentage points respectively. Throughout Asia, companies have become more optimistic about hiring than they were a year ago, most dramatically in Singapore and only marginally in Japan. Things look less rosy in Europe. In Spain and Italy, more companies expect shrinkage in their workforce than expect it to grow. In Italy and the Netherlands (not shown) the outlook has darkened from a year ago.


Copyright © 2010 The Economist Newspaper and The Economist Group. All rights reserved.

The apple of Wall Street.

Steve Jobs: How to live before you die

Alain de Botton: A kinder, gentler philosophy of success

8 secrets of success.

Thursday, 11 March 2010

Wednesday, 10 March 2010

Brazil to expand 6%.



Brazil to Expand 6% in ‘Growth Miracle,’ RBC Says
By Veronica Navarro Espinosa

March 10 (Bloomberg) -- Brazil’s economy will expand 6 percent in 2010 and more than 4.5 percent annually over the next five years as the country experiences a “growth miracle,” RBC Capital Markets Inc. said.
“Brazil is about to embark on a ‘growth miracle’ for the next 5 years,”
Nick Chamie, head of emerging-markets research at RBC, said in an e-mailed report. “The old joke in emerging markets had been that Brazil will always be the country of the future. Well this time the joke may very well be on us in coming years.”
Latin America’s largest economy will benefit from “strong” global demand for commodities and low interest rates, according to Chamie. Brazil is the world’s biggest exporter of sugar, coffee, ethanol, beef, poultry, tobacco and orange juice. The economy grew an average of 3.5 percent a year from 2005 to 2009, according to the International Monetary Fund.
Brazil’s $1.6 trillion economy will expand 5.5 percent this year, according to a survey of 100 analysts published March 1 by the central bank.
The real increased 33 percent last year, the best performance among 26 emerging-market currencies tracked by Bloomberg, as domestic demand, government stimulus plans and rising prices for Brazil’s commodity exports helped pull the economy out of recession faster than most countries.
The real rose 0.2 percent to 1.7730 per U.S. dollar at 1:41 p.m. New York time.
Brazil’s growth will help maintain the real’s “outperformance,” Chamie wrote.
Credit growth and government spending will also help propel Brazil’s economy, according to Chamie. He estimates credit will equal 65 percent of gross domestic product (GDP) in the next five years, up from 45 percent in 2009. Brazil may invest $500 billion in projects including infrastructure by 2015, Chamie wrote.


source: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ageYBDIU_bjI#

The world's richest men - 2010

Mexican shakes up world rich list

Mexican telecom giant Carlos Slim has topped Forbes magazine's billionaire's list - the first time since 1994 that an American has not led the rankings.
Mr Slim's fortune rose by $18.5bn (£12.4bn) last year to $53.5bn.
That beat Microsoft founder Bill Gates ($53bn) into second place, with US investor Warren Buffet ($43bn) third.
In 2009 332 names left the list after a tough year, but the total number of billionaires on this year's list rose from 793 to 1,011, Forbes said.
The year's biggest gainer, Brazilian mining tycoon Eike Batista, broke into the top 10 for the first time.
He came in at number seven, having boosting his wealth by $19.5bn to $27bn.
France's Bernard Arnault ($27.5bn), the man behind the world's biggest luxury goods firm LVMH, also moved back into the top 10 and number eight, increasing his fortune by $11bn to $27.5bn.

In a sign that the global economy could be seeing signs of improvement, the average net worth of the world's billionaires is now $3.5bn, up $500m from last year.
Besides, 97 names made their debut while a record 164 returned to the list in 2010 - including Facebook founder Mark Zuckerberg ($4bn) who also regained the title of youngest billionaire.


Forbes said the net worth figures were based on a broad range of assets including real estate, art, jewellery collections, cash, investable assets and debt.
The news was a far cry from 2009 when the financial crisis affected the world's richest people by deleting 332 names off the list and an average of 23% off the wealth of the remaining billionaires.
Falling stock markets and collapsing commodity prices were blamed.


In Europe, shopping dominated the money list with six of the top 10 European billionaires making their money in retail and three more in consumer products.
Top of the list was Bernard Arnault (7) from LVMH, closely followed by Amancio Ortego of clothes retailer Zara (9), Karl Albrecht of cut-price supermarket Aldi (10), Igvar Kamprad and family (11) of Ikea and Stefan Persson (13) of discount retailer Hennes & Mauritz.
In the UK, the sixth Duke of Westminster Gerald Grosvenor (45) remained the wealthiest Briton with a net worth of $12bn as he improved his finances by $1bn despite the UK property decrease.
The improving health of the global economy meant that 55 countries were represented in the Forbes list - with Pakistan (Mian Muhammad Mansha, number 937) and Finland (Antti Herlin, number 773) adding their first billionaires.
Strong stock markets and several large initial public offerings (IPO) during the past year helped Asia close the gap with Europe.


In 2010, New York remained at the top of the pile with 60 ultra-rich residents, Moscow was second with 50 billionaires and London third with 32.

Story from BBC NEWS:http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/8560731.stmPublished: 2010/03/10 23:01:14 GMT© BBC MMX

What makes most admired companies different?

What makes most admired companies different?


By Geoff Colvin, senior editor at large

March 9, 2010

(Fortune) -- Practically every company I know wants to come out of the recession competitively stronger. Now, enough time has passed that we can see which demonstrably did and which dismally didn't.
Goldman Sachs vs. Citigroup, Best Buy vs. Circuit City, Honda vs. General Motors, Intel vs. Advanced Micro Devices -- what separated this historic recession's winners from its losers?
A big part of the answer arrives in new research from the Hay Group, which helps Fortune determine our annual ranking of the
World's Most Admired Companies and investigates what makes them so successful.
It turns out that this year's leaders -- the industry champs that really did come through the recession on top, such as UPS, Disney, McDonald's, and Marriott International -- differ from the stragglers in at least one way: They actually believe what every company proclaims about people being their most valuable asset.
The contrasts are striking. The winners in this recession, meaning the three most admired companies in each industry, were much less likely than the others to have laid any people off in the past two years (only 10% did so, vs. 23% for their less admired peers). By even greater margins, they were less likely to have frozen hiring or pay. By a giant margin (21 points), they were more likely to have invested the money and the effort to brand themselves as employers, not just as marketers to customers.
Tying all those facts together is one precept: "Most Admired companies display a greater long-term focus than do their peers," says the Hay Group's Mark Royal. That is, they understand that people are an asset, not an expense.
Lest this sound like mere up-with-people happy talk, consider that sentiment's hard financial reality. Putting money into assets is not spending but investing. If you really believe that people are an asset, then you'll keep investing in that asset as long as you think the investment is earning more than the cost of the capital required. But if you believe that people are an expense, like the electricity bill, then in a recession you'll just cut that expense as much as possible.
Hay's new research shows that champion companies focus particularly on making sure employees feel engaged by their work. These firms are much more likely to have specified what employee engagement means, to measure it, to hold line managers (and, significantly, not just HR staffers) accountable for it, and to connect it to business objectives such as productivity, say, or efficiency. Companies that do those things are not only more admired but also much more profitable than others.

So why are many managers still clueless? Often they believe that Wall Street will massacre their stock if they don't thin the herd. Yet research by Darrell Rigby of the Bain consulting firm shows that this simply isn't true. Companies that whack employees as a means of cutting costs (rather than for strategic reasons such as a merger integration) lose more shareholder value over the course of the following year than companies that keep good workers.
Another objection is that the industry champs are so rich they can afford to be magnanimous with employees in a way most employers can't. But what's the cause and what's the effect? Each factor clearly helps the other, creating a virtuous circle.
Which brings us to a deeper lesson from the Most Admired: The industry leaders didn't launch their enlightened human capital philosophy when the recession hit; they'd followed it for years. Once a recession starts, it's too late. Champions know what their most valuable asset really is, and they give it the investment it deserves -- through good times and bad.

Source:

http://money.cnn.com/2010/03/08/news/companies/admired_different.fortune/index.htm

The most admired companies in the world.




Top 50:
1.Apple
2.Google
3.Berkshire Hathaway
4.Johnson & Johnson
5.Amazon.com

Tuesday, 9 March 2010

US online ad spend to overtake print.



Financial Times FT.com


US online ad spend to overtake print


By Kenneth Li in New York
Published: March 9 2010


US online advertising and marketing spending will overtake print this year as traditional media spending continues to decline, according to a study.
Online spending is forecast to rise 9.6 per cent to $119.6bn, while print spending will fall 3 per cent to $111.5bn, according to a survey of 1,000 advertisers by Outsell, a publishing research company.
As a percentage of spending,
advertisers are expected to allocate more to digital budgets – 32.5 per cent – compared to 30.3 per cent to print.
Advertisers were spending more on web search advertising, their own websites and webinars instead of newspapers and magazines, the survey said.
Chuck Richard, vice-president of Outsell, said the data reflected a desire by advertisers and marketers for more accountability from money spent.
The forecast for strong online growth comes after US newspapers and magazines suffered a
decline in advertising revenue in 2009, with many seeing as much as a third of revenue evaporate during the recession.
Magazine spending, which fell 26 per cent last year, is expected to swing back with a modest gain of 1.9 per cent. But print newspaper advertising is forecast to fall further, by 8.2 per cent, the study said.
Television, radio and film spending collectively are expected to decline nearly 4 per cent this year to $84.6bn.
Overall, US advertising and marketing spending is expected to rise by 1.2 per cent to $368bn this year.

Copyright The Financial Times Limited 2010.

Sunday, 7 March 2010

Common errors in English - Quiz

Friday, 5 March 2010

Zara's secret for fash fashion.


Zara's Secret for Fast Fashion

Spanish retailer Zara has hit on a formula for supply chain success that works. By defying conventional wisdom, Zara can design and distribute a garment to market in just fifteen days.


From Harvard Business Review.
By Kasra Ferdows, Michael A. Lewis and Jose A.D. Machuca


In Zara stores, customers can always find new products—but they're in limited supply. There is a sense of exclusivity; since only a few items are on display even though stores are spacious (the average size is around 1,000 square meters). A customer thinks, "This green shirt fits me, and there is one on the rack. If I don't buy it now, I'll lose my chance."
Such a retail concept depends on the regular creation and rapid replenishment of small batches of new goods. Zara's designers create approximately 40,000 new designs annually, from which 10,000 are selected for production. Some of them resemble the latest couture creations. But Zara often beats the high-fashion houses to the market and offers almost the same products, made with less expensive fabric, at much lower prices. Since most garments come in five to six colors and five to seven sizes, Zara's system has to deal with something in the realm of 300,000 new stock-keeping units (SKUs), on average, every year.
This "fast fashion" system depends on a constant exchange of information throughout every part of Zara's supply chain—from customers to store managers, from store managers to market specialists and designers, from designers to production staff, from buyers to subcontractors, from warehouse managers to distributors, and so on. Most companies insert layers of bureaucracy that can bog down communication between departments. But Zara's organization, operational procedures, performance measures, and even its office layouts are all designed to make information transfer easy.
Zara's single, centralized design and production center is attached to Inditex (Zara's parent company) headquarters in La Corunha. It consists of three spacious halls—one for women's clothing lines, one for men's, and one for children's. Unlike most companies, which try to excise redundant labor to cut costs, Zara makes a point of running three parallel, but operationally distinct, product families. Though it's more expensive to operate three channels, the information flow for each channel is fast, direct, and undisturbed by problems in other channels—making the overall supply chain more responsive.
The constant flow of updated data mitigates the so-called ‘bullwhip effect’ — that is, the tendency of supply chains to amplify small disturbances. A small change in retail orders, for example, can result in wide fluctuations in factory orders after it's transmitted through wholesalers and distributors. In an industry that traditionally allows retailers to change a maximum of 20 percent of their orders once the season has started, Zara lets them adjust 40 percent to 50 percent. In this way, Zara avoids costly overproduction and the subsequent sales and discounting prevalent in the industry.
The introduction of new products in small quantities, ironically, reduces the usual costs associated with running out of any particular item. Indeed, Zara makes a virtue of stock-outs. Empty racks don't drive customers to other stores because shoppers always have new things to choose from. Being out of stock in one item helps sell another, since people are often happy to snatch what they can. In fact, Zara has an informal policy of moving unsold items after two or three weeks. This can be an expensive practice for a typical store, but since Zara stores receive small shipments and carry little inventory, the risks are small; unsold items account for less than 10 percent of stock, compared with the industry average of 17 percent to 20 percent. Furthermore, new merchandise displayed in limited quantities and the short window of opportunity for purchasing items motivate people to visit Zara's shops more frequently than they might other stores. Consumers in central London, for example, visit the average store four times annually, but Zara's customers visit its shops an average of 17 times a year. The high traffic in the stores circumvents the need for advertising: Zara devotes just 0.3 percent of its sales on ads, far less than the 3 percent to 4 percent its rivals spend.

Excerpted with permission from "Rapid-Fire Fulfillment," Harvard Business Review, Vol. 82, No.11, November 2004.

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