SOURCE: IMAP, Inc.

IMAP, Inc.

October 20, 2010 17:10 ET

IMAP'S Retail Industry Global Report Forecasts Investment in Emerging Markets

Economic Recession Changes Consumer Buying Habits

SARASOTA, FL--(Marketwire - October 20, 2010) -  IMAP, Inc., an exclusive global merger and acquisition (M&A) organization, is pleased to announce the findings of its Retail Industry Global Report. The report details M&A activity in the retail industry by country and region over the last 12 months, growth projections for the remainder of 2010 and beyond, and insight regarding industry trends. During the last 12 months, the sector saw 1,409 transactions, valued at just over $17 billion in total transaction value. Although the economic recession hit the retail industry hard, IMAP advisers are certain that recovery is on the way.

In terms of country, the U.K. saw the highest transaction value of $3.9 billion with a total 161 transactions during the last 12 months. The U.S. came in second with a transaction value of $3.04 billion with a total of 370 transactions, followed by South Korea, France and China.

Europe was the clear regional leader with a total 688 transactions, followed by North America with 412, Asia with 245, Latin America with 36, and the Middle East with 13. In the future, IMAP advisers predict that growth among foreign players will drive M&A activity, consolidating the highly fragmented retail industry. They also expect large grocers and mass merchants to invest in emerging markets.

According to IMAP advisers, an increase in the global online population is leading to advancement in online retail spending. Between 2005 and 2009, the global Internet population increased from 1 billion to more than 1.6 billion. In 2009, online retail sales totaled over $348 billion. Although online retail sales continue to grow, they account for only 2.5 percent of total global retail sales. Still, IMAP advisers expect online-related technology to continue to drive the growth of the online retail segment, as lower online prices are attractive to recession-hit shoppers.

Commenting on some of the key findings of the report, Marc Gillespie, chairman of IMAP's Retail Industry Group, said, "The recent economic recession has caused consumers to change their buying habits. They now collect information about features, prices, warranties, availability and environmental impact, and then compare all of these with competitor prices before making a purchase. As the market matures, targeting the right customer is crucial, which is why many retailers are using social media as a marketing tool, offering international options and adopting multi-format strategies such as online stores, catalogs, and mobile and convenience stores."

Slow growth, huge discounts and unpredictable shoppers have led retailers to consider expansion into markets in developing countries through the use of a franchise model. Meanwhile, emerging market retailers are using their unique knowledge of local businesses to expand regionally. In order to grow, retailers must combine their global sense while sourcing local market delivery and knowledge.

Mobile commerce and online grocery shopping are another result of the change in consumer behavior. In the U.S., mobile shopping totaled $1.2 billion and is estimated to reach almost $2.2 billion in 2010. The U.K. market for online grocery shopping reached $7.8 billion in 2009. Online healthcare is also expected to grow as consumers become more self-reliant in researching medications and doctors. IMAP advisers expect the Internet to continue to break down barriers and level the playing field for companies, countries and consumers worldwide.

The following are some notable, recent M&A transactions completed by IMAP advisors in the retail industry:

  • IMAP advised Croatian retailer of maritime apparel and accessories, Aqua Maritime d.o.o. in an investment by the Croatian private equity fund, Nexus Private Equity.
  • IMAP advised the Brazilian chain of snack and coffee restaurants, Casa Do Pão de Queijo in its partial sale to the Brazilian private equity arm of the South African Bank, Standard Bank Private Equity.
  • IMAP advised the U.K.-based private equity group, Key Capital Partners in its investment in Dewll Retail Ltd., a U.K.-based multi-channel furniture retailer.
  • IMAP advised the Denmark-based DIY stores for private and professional customers, Herning Tømmergård Holding A/S in its sale to Roslev Traelasthandel A/S, the Denmark-based supplier of building materials for professionals.

IMAP periodically conducts reports on all major industries, providing a global perspective on M&A activity for a given period. IMAP's reports are a result of internal information gathered for completed M&A projects from IMAP's more than 400 advisers in nearly 30 countries throughout the world, as well as external industry sources. To view IMAP's complete Retail Global Report, visit: http://www.imap.com/imap/media/resources/IMAPRetailReport8_23CB9AA9C6EBB.pdf.

Media, private equity groups, corporate development personnel, global M&A attorneys, and other industry professionals will have an opportunity to meet representatives from IMAP's Retail group at IMAP's 2010 Global Mergers & Acquisitions Symposium in Paris, France on Thursday, October 21. More information on this fall symposium is available on the IMAP Web site: www.imap.com/conferences.

About IMAP
IMAP is an exclusive global organization of leading merger and acquisition advisory firms. Formed in 1973, IMAP is composed of 45 offices in nearly 30 countries throughout North and South America, Eastern and Western Europe, Australia and Asia. In 2009, IMAP advisers completed 179 transactions, with an aggregate transaction value of more than $6 billion. IMAP advisers provide strategic merger, acquisition, divestiture and related corporate finance services. Sellers of mid-size companies and corporate acquirers alike rely upon IMAP for essential local market knowledge and industry expertise delivered with unparalleled global reach. Every business day, somewhere in the world, an IMAP adviser is completing an M&A transaction. More information is available via the Internet at www.imap.com.

Contact Information

  • To arrange an interview with representatives from IMAP's retail group, or if you are interested in expert commentary from a member of IMAP's global network of advisors, please contact the following:

    Media Contacts:
    Christina Bereta
    IMAP
    (312) 780-7218
    christina.bereta@imap.com

    David Gutierrez
    IMAP
    (312) 780-7204
    david.gutierrez@imap.com