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‘free Money’ Bank Offers May Cost More Than You Think – Yahoo News

Pharmacies lure consumers from LVMH beauty retailer Sephora – Yahoo Finance

Banks are struggling to raise revenue and you see them launch price-based strategies such as cash rewards, says Rajesh Kandaswamy, a banking analyst with Gartner. Since it is more difficult to win new bank customers compared to retaining them after, upfront cash rewards prove attractive to banks instead of reducing ongoing fees.” So before you buy into a cash bonus reward offer from a new bank, do your homework first. Make sure youll be able to cover the minimum balance requirements and monthly service fees. Youre getting a short-term reward up front but if youre signing up for an account thats not right for you, you could easily be charged the amount of the bonus over the course of a year, Gower says. Lavingia adds: You want to be careful about loopholes but if youre at a bank where youre not earning as many [perks] right now, it could be a good opportunity to make the switch. Heres a list of cash bonus offers going on now. Read each deal carefully for terms and conditions: Bank of America: In select states, earn $100 when you open a personal checking account. BBVA Compass Bank: Win $100 by sending money through their p2p transfer system. BMO Harris Bank: Earn up to $200 by opening an Everyday Checking account, Select Checking or Portfolio Checking account. Capital One: Earn a $50 bonus with a 360 Checking Account.
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“Pharmacies are the number-one retail network attacking specialist beauty retailers and taking revenue away from them, particularly in skin care,” said Stephanie Poupineau, account manager at Kantar Worldpanel. Pharmacies have been pushing beauty products in recent years attracted by higher margins: 30-32 percent against 21 percent in their core prescription drug business, which has been hit by cash-strapped governments pruning the number of treatments covered by national insurance and the rise of cheaper generics. CLOUDS FOR SEPHORA The trend is a concern for LVMH as Sephora’s success has been helping ease investors’ worries about slowing growth at the luxury group’s flagship Louis Vuitton brand. Sephora is estimated to generate about 15 percent of LVMH’s total revenue – with a quarter of that in western Europe – and roughly 7-8 percent of group operating profit. “Pharmacies gaining market share in western Europe is a worrying trend,” said BNP Paribas luxury goods analyst Luca Solca. Beauty product manufacturers are all too aware of the shift away from specialist retailers to cheaper outlets and believe the stores should find ways to reverse the flow. Clarins Chairman Christian Courtin-Clarins, whose family took the beauty brand private in 2008, does not hide his concern about specialist retailers’ dwindling market share in Europe as he relies heavily on them. “Instead of losing our time fighting on margins, we should focus on how we can convince clients to come back to the beauty specialist network,” Courtin-Clarins told Reuters by telephone. Whereas 10 years ago Sephora paid 50 euros for a beauty product from a manufacturer and sold it for 100 euros, today it makes more profit by paying only 40 euros but still sells it at the same price, according to industry executives. Sephora could also have a reversal in fortunes in France and other Western European countries if economic recovery takes hold and consumers veer back to more expensive products sold at specialist beauty retailers.
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