Apparel Online India Magazine May 1-15, 2019 | Page 13

RETAIL CURRENT
Walmart, Amazon take jibe at each other over
wages and taxes
The battle for supremacy between
Amazon and Walmart veered into a
trash-talk phase as it shaped into
a catfight of sorts over worker pay
and alleged tax shirking, where
Amazon was the provocateur
of the dust-up. Amazon.com
Inc Chief Executive Jeff Bezos
challenged retailers to hike their
minimum wages to US $ 16 an
hour, prompting a comeback from
Walmart Inc which asked its rivals
to pay taxes. “Today I challenge
our top retail competitors (you
know who you are!) to match our
employee benefits and our US
$ 15 minimum wage. Do it! Better
yet, go to US $ 16 and throw the
gauntlet back at us,” said Jeff
Bezos, Chief Executive, Amazon.
com Inc. Amazon has raised its
minimum wage to US $ 15 per hour
for US employees from November,
giving in to critics of poor pay
and working conditions at the
company. However, critics have
said that the hike is not sufficient.
After the jibe by Amazon,
Walmart’s Executive Vice
President of Corporate Affairs,
Dan Bartlett struck back on
Twitter asking its rival to pay its
tax bill, tagging Bezos and using
similar language. “Hey retail
competitors out there (you know
who you are) how about paying
your taxes,” tweeted Bartlett. As
reported earlier, Amazon paid
zero dollars in federal income tax
in 2018, according to filings with
the SEC – despite nearly doubling
its profits. Amazon’s third-party
sales in 2018 accounted for 58%
of total sales, up from 56% in
2017, Bezos said. Responding to
the jibe by Walmart, Amazon has
said that it pays all the required
taxes in every country where it
operates, including US $ 2.6 billion
in corporate tax and reporting US
$ 3.4 billion in tax expense over
the last three years. “Corporate
tax is based on profits, not
revenues and our profits remain
modest given retail is a highly
competitive, low-margin business,”
the company said.
Uniqlo witnesses growth in China, South Korea
despite sluggish first half
Following Uniqlo owner Fast
Retailing’s heavy losses from
its overseas brands and also
disappointed by the heavy
discounts offered on winter
apparels after a warm season,
the brand has now lowered its
outlook for the year. At the start
of the year, the company had
predicted an operating profit
of ¥ 270 billion; however, the
numbers have been now revised to
¥ 260 billion for the year through
August, which is still estimated to
be a record high.
The first half of the present
financial year saw the company’s
revenue slumping to ¥ 491.3 billion
(5% down from what it was during
the same period in the previous
year). Similarly, operating profits
too went down and totalled ¥ 67.7
billion (23% down from the last
financial year). The online sales, on
the other hand, saw an impressive
jump of 30.3%. The weak first half
was, however, compensated by a
double-digit increase in Uniqlo’s
sales and profit in China, which
enabled the fashion brand to see a
rise in the operating profit to touch
¥ 68 billion for Q2. Uniqlo South
Korea too saw a significant rise in
revenue as well as profit.
“The company’s operation
in China, south-east Asia
and Oceania continued
to report strong growth
in revenue and profit.
Notably, the company
increased its number of
store locations to 633 in
China in last fiscal year,
which is 78 stores more
than the previous year.”
– Tadashi Yanai, Chairman,
President, CEO, Uniqlo
www.apparelresources.com | MAY 1-15, 2019 | Apparel Online India
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