Business trends - March 2012

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Smart cookies

Danish entrepreneur makes success look easy as Agnes Cupcakes expands
Following in the footsteps of Joe & The Juice - the Copenhagen-based healthy alternative to Starbucks that has successfully ventured overseas - is the slightly less healthy but equally colourful Agnes Cupcakes. Just as there is no "Joe", but an entrepreneur called Kaspar Basse behind the juice biz, there is no "Agnes", but a smart cookie by the name of Kristian Vangsgaard, who opened a cupcake café in September 2010 near the fashion boutiques of Copenhagen's Kongens Nytorv district.

The establishment's large, colourful selection, which changes daily, and its retro-coloured boxes have made the company such a hit among the city's womenfolk and metrosexuals - it serves up around 1,500 cupcakes a day - Vangsgaard is now planning to open between 10 and 15 similar outlets throughout Denmark.

However, his vision does not end there. He is about to embark on the rollout of 50-plus Agnes Cupcakes outlets throughout Europe, with at least two shops opening in Hamburg in the first half of 2012. The plan is to have a chain of 250 shops, even expanding into the US within five years.

Life is not all sweet for the cupcake king: come April he is to open his latest venture, what he describes as a new gourmet pizza concept, in the centre of Copenhagen.

Trouble brewing

Epic battle for the Budweiser name takes another bitter twist
The long-running battle between US brewing giant Anheuser-Busch (AB) and the Czech Republic's fourth biggest brewery, Budejovický Budvar, for rights to use the Budweiser name has taken a new turn - the American giant has appeared to gain a trump card by buying a Czech brewery also involved in the dispute. AB - now part of Belgium's Anheuser-Busch InBev, the world's biggest brewing business - has bought out part of the BMP brewery in Ceské Budejovice, a couple of hours by train from Prague.

For almost 100 years a battle has raged between US and Czech breweries over the rights to use the Budweiser name and there are still around 40 court cases currently running worldwide. Budejovický Budvar is sold in Central and Eastern Europe, Germany and France. Anheuser-Busch is sold in the US, China, Japan, Australia, New Zealand, Spain, Italy and Sweden. Britain recognises both brewers' rights to sell their beer.

The US move on Budejovický Budvar comes as sales of Anheuser-Busch InBev's overall beer volume for the first nine months of 2011 are flat. Budweiser consumption has been falling fast on its main US market but is offset by strong sales in China, Russia, Britain and Canada.

Anger management

Furious chairman of Tod's threatens to pull plug on Colosseum's restoration
Italian luxury goods maker Tod's might have recently announced that it was confident its 2011 profits will show an "outstanding" performance, after full-year sales rose 13.5% to €893.7m, but this hasn't lightened the thunderous mood of chairman Diego Della Valle.

The Todfather has threatened to pull his €25m offer to fund the restoration of Rome's Colosseum because Italy's Guarantor Authority for Competition and Market accused him of breaching the country's competition laws. Last year, the billionaire agreed to pay for most of the costs necessary to restore the nearly 2,000-year-old Roman amphitheatre, which needs emergency repairs. Work was supposed to begin in March and last at least until 2015, but it's now looking increasingly likely that the restoration will be delayed, as Tod's, which owns brands like Hogan and Roger Vivier, has been accused of not giving other potential funders enough time to make a better offer. In typical Italian fashion, the deal is currently being reviewed by three separate institutions - the antitrust authority and two judiciary courts.

Tod's has also rejected accusations that it was planning to exploit the sponsorship for commercial purposes. The proud company traces its roots back to the late 1920s when Filippo Della Valle started a shoemaking business. Today, the Della Valle family controls 56.7% of the company: Diego and his brother, Andrea, serve as the group's joint chief executives and Diego's eldest son, Emanuele, works as creative director.

Cash strapped

Austrian company launches swipeable watch with built-in Mastercard PayPass
Thousands of people are already paying for small goods or transport by tapping their RFID-enabled cards against a SIM card reader. But what if you're too busy (read lazy) to root around your pocket to find the appropriate card? Fortunately, Vienna-based Watch2Pay has developed a swipeable watch with a built-in version of a MasterCard PayPass prepaid card linked to a prepaid reloadable account. When shopping at participating MasterCard PayPass retailers, Watch2Pay users simply hold their watch up to a card reader, James Bond-style, and payment of up to €18 is made instantaneously.

Available in eight colours, each Watch2Pay device is priced at €118 and it costs €5.90 to set up a payment scheme via facilitator Kalixa. Currently, residents of the UK, Germany and Italy are eligible to register for Kalixa, although a deal with another facilitator is in the works for Poland.

Watch2Pay devices also come with a standard-sized MasterCard PayPass prepaid card.

Capital gains

International hotel chains set to open doors on new crash pads in Moscow
The number of quality hotel rooms in Moscow is expected to grow 6% this year to 32,500, as several international chains cut the ribbons on various big projects. Hotels expected to be completed this year include the five-star Four Seasons Moscow near the Kremlin, Kempinsky Hotel Nikolskaya, a Novotel in Moskva-City, two Hiltons, a Mercure and a big complex in Vnukovo Airport.

And as the city is gaining popularity as a business and tourist destination, its authorities and other interested parties are squabbling over just how expensive it is to stay there. According to German booking service hotel.info, Moscow had the highest room rates in Europe in November, with the average rate reaching RUB 7,684 per night (€194), followed by Oslo and London.

But Marina Smirnova, senior vice president at Jones Lang LaSalle Hotels, argues that Moscow hotels are not the most expensive in Europe by far, noting that room rates in three-star to luxury five-star hotels there averaged €149 per night in November, whereas the average rate in Paris reached €230 per night.

Also, Anna Shvetskova, analyst at Knight Frank, says hotel-booking services usually don't take into account corporate rates. She reckons Moscow ranked fifth after Paris, London, Amsterdam and Rome by average rates last year.

All the experts agree on one thing, though - growing demand for Moscow rooms will be a major driver for rates this year.

Silver medallist

Europe's wealthiest city, Oslo, is also confirmed as the second richest on the planet, according to the Brookings Institute's study
Oslo is not only Europe's richest city in terms of its citizens' income - it is the second richest in the world. Norway's capital only comes in behind the hedge fund manager haven of Hartford, Connecticut, according to the Brookings Institute's study of the 200 richest global cities.

With an average annual income of €56,325 in 2011, wage earners in the Norwegian capital trailed their counterparts in the Connecticut state capital by a mere €761. Residents of third-placed San Jose earned €51,847, while those in oil-rich Abu Dhabi came in fourth with an average income of €48,594. In a list dominated by US cities, the only other European ones in the top 10 were Zurich (sixth) and Stockholm (eighth).

However the Brookings' study found that 90% of the world's fastest-growing metropolitan economies are outside North America and Western Europe. The speediest is Shanghai, followed by Riyadh and Jeddah.

Contributing to Oslo's wealth is its "mass immigration", which led to foreign nationals comprising 15% of Norway's workforce in 2011, according to new official figures. "Since 2004, immigration has switched from low-qualified asylum seekers to well-qualified workers from Eastern Europe and Sweden. And that change has come about very quickly,"

Kjell Gunnar Salvanes, an economics professor at the NHH business school, told Bergens Tidende.

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