Monthly Archives: July 2012
British fashion chain River Island is headed for Australian shores after entering into a “partnership” with Australian company Retail Apparel Group.
The fashion chain is following overseas retailers such as UK-based TopShop and Spanish chain Zara into the Australian market.
The deal to bring River Island to Australia involves a partnership with RAG, which owns brands including Tarocash and YD.
RAG founder Stephen Leibowitz told SmartCompany the deal was three years in the making, although he would not reveal the terms of agreement between the two companies.
It will signal a change of direction for RAG, which is primarily a menswear retailer, while River Island’s offering is 75% women’s wear.
“We are looking for two sites initially and hoping for one in Sydney and Melbourne, but it depends what comes our way,” says Leibowitz.
“We would like a central business district site or a major shopping centre.”
1. Fast fashion
Similar to TopShop, River Island is a fast fashion retailer with a high turnover of stock at low price points, with most clothing priced below $80.
This allows the retailer to be very trend-driven and pick up on the latest fashions from street wear and catwalks.
Leibowitz told SmartCompany that River Island’s in-house design team would produce the same products for the Australian market as it sells in Europe.
“Our intention is to produce the same product at the same time, taking into consideration weather,” he says.
“For high fashion product, like a dress, quite often it doesn’t matter what time of year it is.”
Leibowitz describes River Island’s products as “very on the money and very commercially fashionable”.
He says River Island’s fast fashion products are already “very well liked and accepted” in Australia with Australian online sales making up the chain’s biggest market outside the UK.
2. Flagship large format stores
River Island’s flagship stores in the UK are located in prominent locations, with three on London’s famous Oxford Street alone.
The chain will try to replicate this in Australia with RAG on the lookout for the perfect site for two flagship stores, one in Sydney and one in Melbourne.
Leibowitz describes River Island’s flagship stores as “very large format”, covering multiple levels and up to 1,500 square metres.
“Location of property is the most important thing, after the product that is already very successful, that is followed by people,” says Leibowitz
“We run our business on a whole lot of P’s.”
3. Family business
River Island is a family business that was set up in 1948 by Andrew Hunt and Bernard Lewis and originally operated from a small shop in London as Lewis Separates. It has since gone through a number of name changes – Chelsea Girl, Concept Man – before becoming River Island in 1988.
River Island is led by entrepreneur and chairman Bernard Lewis and Leibowitz describes the family as “very conservative” and “very low profile”.
“They are one of the wealthiest families in Britain but their feet are on the ground. They are not like typical fashion people who like to be in the press,” Leibowitz says.
Keeping the business in the family means that staff have lots of contact with the owners and that the owners are very involved in the business.
“Clive Lewis, the chairman, who is a billionaire, everyone knows him as Clive,” Leibowitz says.
“The founder [Clive’s father, Bernard Lewis], who is over 80 years old, still comes into the business and looks at things before they are approved.”
4. Large number of stores
River Island is known as a “High Street” chain in Britain, as there is a River Island store in most town’s high streets.
The River Island model operates based on a large number of stores and Leibowitz says a similar model will be adopted in Australia once the first two flagship stores are established.
“We wouldn’t be going into it, and nor would they, if it was just two stores in Australia,” Leibowitz says.
“We have over 275 stores in Australia and, in Europe, River Island has 300. Last year they had 160 million people go through their stores.”
5. Celebrity factor
River Island has tapped into consumers’ fascination with celebrities by enlisting key celebrities to design collections.
The latest is pop star Rihanna, who will be designing a collection for the chain for spring 2013.
It’s certainly not the first fashion retailer to do this and TopShop achieved great success with its collaboration with Kate Moss and Madonna has designed for H&M.
It’s a great way to attract publicity and Rihanna has already circulated Instagram pictures of herself wearing River Island clothes.
According to The Register, the company had started a 90-day consultation process for making staff redundant. It noted in its report that 90-day consultation processes are required in situations where companies plan to cut more than 100 staff.
A John Lewis spokesman told Computerworld UK that “part of the purpose of the consultation is to act as a means to discuss proposed changes and to provide a medium for information to be both relayed and received.”
He added: “We are currently implementing a partnership programme to update, improve and standardise Corporate Computer Services. This programme will significantly increase the partnership’s efficiency and consistency in line with our customers’ needs.”
However, when asked about possible job cuts, he said that John Lewis “cannot confirm anything regarding restructure, at present, as consultations with partners are ongoing”.
This news may come as a surprise to some, as John Lewis recently announed plans to hire more than 50 IT specialists this year in a bid to support increased investment in multi-channel customer service offerings. The roles will include project managers, business analysts, systems analysts and developers.
However, the current review of IT is for back-office and support staff operating out of the John Lewis Partnership. Whereas the new recruits will be driving innovation at the front end for such things as John Lewis online and its electronic point of sales systems, which are supported out of a different department.
“Technology has been identified as one of the most important drivers of business growth,” said Owen Roberts at the time, John Lewis’ recruitment manager.
“We are now looking for talented IT professionals to join our team and help us take multi-channel retail to the next level, cementing our reputation as an industry leader.”
Italian luxury fashion house Dolce & Gabbana has opened its first UK airport store at Heathrow Terminal 5.
The 1,076sq ft store offers passengers a wide range of men’s and women’s accessories, including bags, shoes, small leathergoods, foulards and sunglasses.
Heathrow Retail Concessions Director Muriel Zingraff said: “We are really pleased to be able to announce the opening of the Dolce & Gabbana store at Terminal 5. Heathrow has built an extensive portfolio of luxury brands, making the airport a shopping destination in its own right. Dolce and Gabbana is the perfect addition to Heathrow’s luxury offering.”
With a curved façade and two lateral windows to reveal the interiors, the store is designed to emulate the Dolce & Gabbana world, where the men’s and women’s accessories blend in with the brand’s signature furnishings: basalt flooring, black carpets and a baroque chandelier.
The collections are positioned in black and white display cases which, together with careful use of lights, are intended to create a relaxed and sophisticated atmosphere, enhancing the craftsmanship of each item.
The opening of Dolce & Gabbana forms part of Heathrow’s investment in its shops and other facilities to provide passengers with an exciting and engaging shopping experience, the airport company said. Research and passenger feedback has led Heathrow to introduce several new premium brands to the airport.
A FORMER director of La Senza, the lingerie chain that collapsed into administration earlier this year, is to tackle the turnaround of struggling retailer JJB Sports.
Beverley Williams, who takes on the chief executive’s role vacated by Keith Jones last Friday, will work alongside US retail recovery specialist and chairman-designate Bob Corliss as they look to revive the fortunes of the sporting goods group.
JJB has been struggling in the face of weak consumer confidence, supply troubles and stiff competition from Sports Direct, which – with its bustling out-of-town and high street stores – appears to have cornered the sports clothing market.
The firm has closed underperforming outlets and is targeting keen amateurs and sporting families with better stores and new and improved product ranges.
However, it recently posted an 8.7 per cent slide in like-for-like sales as poor weather and weak demand for replica kits resulted in a disappointing Euro 2012 tournament.
Williams, who will hold the chief executive’s role on an interim basis, was commercial director and co-chief executive of La Senza but left last year before its move into administration in January. She was previously general manager of Contessa, which merged with La Senza in 2007.
Corliss, who previously ran franchise-based footwear business the Athlete’s Foot, said: ”Beverley brings a wealth of experience in multi-channel retailing, which forms a core part of the JJB
“She is particularly well known for her expertise in product and trading. I am looking forward to working with Beverley as we set about improving the overall experience for JJB customers.”
EDCON and House of Busby have been granted the South African franchise rights for Topshop and Topman, the UK-based fashion retail chains.
The first branches will be standalone stores, with a flagship, 950m² Topshop and Topman store to open in Sandton City by the end of November.
A second store has been confirmed to open at the Gateway shopping centre in Umhlanga, KwaZulu-Natal, before the end of the year.
Additional standalone stores are planned for major retail centres across the country, complemented by shops-within-shops at certain Edgars stores.
“We are very pleased to be able to bring the iconic Topshop and Topman brands to the South African consumer. The agreement leverages the strengths of our two organisations and is an exciting development in fashion retail,” Edcon CEO Jürgen Schreiber and Veronique Shera, MD Busby Retail, said.
Topshop and Topman have more than 750 stores worldwide.
The British multinational retailer is part of the Arcadia Group, wholly owned by multibillionaire businessman Sir Philip Green.
“I am delighted to be launching Topshop and Topman in South Africa through the arrangement with Edcon and Busby,” he said. “This represents another step in our continued international growth, and I am confident the South African customers will enjoy the retail experience and fantastic product offer that both our brands will deliver for them.”
Mr Price online offering goes live
Mr Price on Monday went live with its online retail offering, which, according to CEO Stuart Bird, would enable the company to further strengthen relationships with its target customers.
According to Mr Price’s research, e-commerce sales in SA made up less than 0.5% of total retail sales, far behind the US, the UK, Europe and parts of Asia, where e-commerce as a percentage of total retail sales ranges between 7% and 10%.
“Our customers are incredibly tech-savvy and need a convenient and secure way to get their fashion,” Mr Bird said.
With nearly 18,000 items available online, customers will have access to Mr Price’s entire fashion range on the online store.
Furthermore, shoppers will be able to access the full range of merchandise, which was previously only possible by shopping at one of the larger stores.
“We’ve added even more to convenience by making the site – mrp.co.za web and mobi enabled, so customers will be able to transact with their computers or cell phones.
“More South Africans access the internet from their phones than from their desktops, which is why we developed a fully mobile e-commerce store that allows shopping from web-enabled mobile phone or tablet,” Bird said.
As broadband capabilities and costs have become more accessible to South Africans, consumers are switching to the benefits of e-commerce.
SA is catching up fast, with annual growth for e-commerce sales over the past few years averaging about 35% and set to continue at this rate for the next couple of years.
A variety of delivery types and payment mechanisms are being offered, including six ways to pay: credit card, debit card, COD with store collections, EFT, gift vouchers and their in-house MrPricemoney account. Delivery will be to the home, place of work, a customer’s nearest post office or the nearest store, for a R35 delivery fee.
Customers can also purchase e-vouchers and send them on electronically via email or SMS.
“The whole process is underpinned by industry-leading security. We will be the first South African retailer to be partnering with CyberSource, a payment gateway and fraud mitigation service provider that counts many of the world’s top online retailers as its customers, including Apple’s iTunes store,” Bird said.
Chinese brands coming to the British high street
“Made in China” is usually what it says on clothing labels, but ambitious Chinese retailers are now looking to make their own brands household names in the UK.
The high street is the latest target of the deep-pocketed Chinese, who are on a buying spree in Britain and have already taken stakes in companies as diverse as Thames Water, Weetabix and Savile Row tailor Gieves & Hawkes.
Chinese fashion giant Bosideng opened its first store in the UK in the West End of London this week to cash in on the influx of visitors for the Olympics, while Chinese fashion label Eve said it wanted to become “the Chinese McQueen” and is heading to London next year.
Bosideng, with sales of more than £800m last year and more than 8,000 stores, is as well known in China as Marks & Spencer is here, and is best known for its colourful down-filled “puffa” jackets. It has ploughed £35m into the six-storey store and plans to use the upper floors as the headquarters for its burgeoning European operation.
With most British high street retailers reliant on Chinese factories to produce low cost clothing, Bosideng is swimming against the tide with only 10% of the UK clothing range made in China.
Bosideng UK chief executive Wayne Zhu said it had been studying the European market for some time and predicted other Chinese groups would follow. “I know of other Chinese retailers doing feasibility studies”, he said.
Unlike its vast domestic operation, which also sells womenswear and childrenswear, Bosideng’s UK offering is upmarket menswear aimed at the customers of brands such as Paul Smith and Hugo Boss. Zhu said the brand wanted to win over Europeans rather than target wealthy Chinese shoppers already familiar with the brand. “We are a Chinese brand, designed in the UK and made for Europe,” he said. To get its product right Bosideng worked with designers Nick Holland and Ash Gangotra who recently collaborated with ex-Oasis frontman Liam Gallagher on his label Pretty Green.
“The brand draws on Chinese history and inspiration but also has a UK feel to it,” added its retail director Jason Denmark. “We have to make a collection that’s right for the European market if we are to succeed.
International retailers have sometimes misfired on entering the UK. It took Uniqlo two attempts to get its ranges and store locations right, while chains such as the Inditex owned Zara had to tweak its sizing after they failed to take account of different body shapes in new markets.
Bosideng’s debut in London came as the government courted Chinese entrepreneurs at a conference in the capital – one of 17 summits scheduled over the next fortnight to attract investment and promote British business.
The centrepiece of the event was a catwalk show by fashion label Eve which became the first Chinese men’s clothing brand to show at London fashion week. Run by Xia Hua, a former politics professor at the China University of Political Science and Law, the brand intends to invest £10m in a London head office next year.
“We would like to be the Chinese McQueen,” said Hua, who added the retailer was in talks with Harrods and Selfridges. “There are a lot of western brands that go to China and achieve business success but not that many Chinese brands that have succeeded in western markets. I would like to see high quality Chinese products on the [British] high street. Not just made in China but designed in China.”
The Qatari owners of Harrods, the world-famous London department store, have paid themselves a whopping £100m dividend in their first full year of ownership after the retailer posted record annual profits.
The sterling performance reflects the significant capital expenditure made by the new owners of the Knightsbridge emporium in its operations, as well as the buoyant demand for luxury products among wealthy visitors to London from Asia, Russia, Brazil and the oil-rich countries of Africa, such as Nigeria.
Harrods, whose managing director is Michael Ward, is also likely to be enjoying strong trading during the Olympics, as foreign tourists flock to the capital. Qatar Holding, the investment fund of the emirates royal family, acquired Harrods for £1.5bn in May 2010 from its former owner, Mohamed al-Fayed.
The Qatari fund took a record dividend of £100.5m out of Harrods for the year to 28 January, more than four times the £22.7m paid the previous year. In 2010, Mr al-Fayed expressed his frustration in getting a dividend approved by the trustee of the Harrods pension fund after he sold the business to the Qataris.
Mr al-Fayed’s family, who acquired Harrods in 1985, paid themselves a previous record dividend of £74m for the year ending February 2002. Harrods has continued to power ahead and grew pre-tax profits by 15 per cent to £125.3m last year, according to accounts filed at Companies House.
The luxury retailer delivered turnover up by 11 per cent to £651.7m, driven by robust trading at its flagship in Knightsbridge, eight outlets at Heathrow and Gatwick airport, and online. This figure excludes items such as VAT, trade discounts and concession sales, which means the amount of money that passed through Harrods’ tills comfortably passed £1bn. The retailer has also expanded its online offer and now delivers products to more than 30 countries including India, Saudi Arabia and Australia.
In its annual report, Harrods said that 2011 had seen a “very significant programme of capital expenditure” of £107.8m, compared with £32.2m the previous year. This spend included its new watches emporium, which houses more than 35 brands, and the introduction of its “room of luxury” that showcases designer handbags and accessories at its Knightsbridge store.
The retailer also invested in a new head office in central London and a distribution centre near Reading. Harrods said it continued to “benefit from the value of the very significant spend on shop fittings invested by partner brands. The directors expect to continue with a high level of capital expenditure in 2012”.
…but there’s retail gloom, too
The development of new shopping centres has stalled in the UK, exacerbating the volume of non-food sales being grabbed by the rapidly expanding supermarket giants.
The property firm CBRE found that shopping centre space under construction has now tumbled to just 6 per cent of the overall retail pipeline from nearly 20 per cent before the financial crisis in 2007. Just 3.33m square feet of this space is set to be completed this year, compared with 13.02m sq ft five years ago.
Jonathan De Mello, the head of retail consultancy at CBRE, said: “This dearth of new development is causing increasing problems for store groups dependent upon speculative shopping centre development to meet their expansion targets.” He added the problem of few store opportunities for big retailers has been “exacerbated” by the increasing amount of non-food space being added by the supermarkets, such as Tesco, Asda and Sainsbury’s.
In addition to the consumer downturn, De Mello said the slowdown in construction activity has been driven by a reluctance among banks to provide financing for, and sovereign wealth funds to invest in, new shopping centres.
A separate survey from the accountancy firm PwC said retail insolvencies jumped by 10.3 per cent to 426 in the second quarter, including the administration of Game.
African Fashion International, the company that hosts Mercedes-Benz Fashion Week in Johannesburg and Cape Town, has teamed up with the Foschini group to facilitate a new route into the industry.
YOUNG TALENT: The Mercedes-Benz Fashion Week is an annual event that exposes South Africa’s designers to the fashion world
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A national fashion design development programme, AFI Fastrack, aims to develop young South African fashion design talent through mentorship and by offering the opportunity to create full fashion collections as part of their training.
Participants will also get exposure in AFI national fashion weeks.
“The programme trains young designers in business acumen, merchandising and how to develop a commercial range. They are taught about the ways in which to build a sustainable, profitable business,” said Bella Cebekhulu, the business development manager of AFI.
“AFI Fastrack is a significant part of African Fashion International’s development programme as we want more of our designers to be passionate about their craft in order to achieve success – which means giving them the necessary skills to run a profitable fashion business. When our designers succeed, the entire industry benefits and more jobs are created,” said Precious Moloi-Motsepe, chairwoman of AFI.
She said Fastrack provided an ongoing platform to develop a generation of designers that may not otherwise have had these opportunities. “The exchange of knowledge will be used to maximise the winners’ output of creativity while enhancing their business capabilities.”
Foschini provides raw materials and educational tools to the designers to cultivate their collections and the Fastrack designers have the opportunity to stock their clothes for two months at Foschini stores.
The government has also pitched in to assist the fashion industry in a bid to boost job creation.
At the beginning of July 2010, the Cape Town Fashion Council secured the approval of R12.3-million from the Department of Trade and Industry’s Clothing and Textile Competitiveness Improvement Programme grant scheme to establish a Fashion Cluster.
The cluster will promote the growth of 23 local design brands which manufacture in South Africa and would help sustain jobs in manufacturing and other design functions in the Western Cape.
“The intent is to create and sustain jobs by competitive product design and good business acumen rather than competing only on price. Designer brand growth leads to growth in the clothing sector pipeline employment. However, job-creation numbers cannot be projected in the short term and can only be assessed post the second semester of the project,” said council CEO Bryan Kamkilawan. The programme kicks off in August.
Kamkilawan said the council was looking at export trade fairs as an area of growth.
“Our South African designers have a competitive edge regarding value-added design, fair trade and cleaner production, which are aligned with international consumer trends. An evaluated designer selection process that matches their product aesthetic to the relevant country trade fair will effect a directed outcome. The Design Indaba Expo [held this year in Cape Town] yielded a R320000 sales return for our designers in 2012,” he said.
“With international fast-fashion retailers growing their market share in the South African market, this will influence a partnership between local retailers and designers regarding product development. The partnership between local brands and retail is a key milestone of the Fashion cluster, but buying South African design needs to be promoted,” said Kamkilawan.
Next Plc (NXT) is planning a Chinese- language website to bolster its rising online sales of clothing and household goods, the Independent on Sunday reported, without saying where it got the information.
Next, which delivers to 57 countries and has websites in Russian and German, is forecast to report a decline of 3 percent in store sales compared with an 12 percent rise in the online and catalog business for the first half of the year, the the newspaper said, citing unnamed analysts at Investec Plc. (INVP)
Jigsaw, the fashion chain that once employed Kate Middleton, will close its younger Kew label by the end of the summer after racking up a £10m loss last year.
Accounts for Jigsaw’s parent company show Kew, which was launched in 2003, made a loss of £6.8m last year as it failed to inspire cash-strapped young shoppers.
A third of the 22 Kew stores will be converted into Jigsaw outlets while the remainder will be closed.
Accounts filed at Companies House for Robinson Webster Holdings, Jigsaw’s parent company, show a group loss of £10m for the year to October 1, 2011, although turnover lifted slightly to £84m from £81m.
Robinson Webster said the decision to close Kew was taken “reluctantly”.
“The board is now able to actively focus on the Jigsaw brand and is seeking commercial opportunities to earn profit and add value by pursuing growth outside of the established stores and web channels,” it added.
Jigsaw also incurred heavy losses of £21.2m last year, which the parent company put down to “one-off charges from the decision to provide against intercompany loans and investments”.
The group plans to further expand the Jigsaw brand in the US, where it has three outlets, through further standalone shops, the internet and concessions in department stores. It is also expanding Jigsaw’s UK business online.
Jigsaw was founded in 1972 with one store in Hampstead.
Robinson Webster also owns the fashionable Shop at Bluebird on London’s King’s Road and homeware brand Cabbages & Roses.
No-one at Jigsaw could be reached for comment.
Shop numbers in the UK have dropped for the first time in at least three years, according to new figures.
The number of retail outlets fell by 0.5 per cent in the second quarter of 2012 compared with the same period last year, the first fall since the British Retail Consortium-Bond Pearce Retail Employment Monitor (REM) began in October 2008.
The BRC said the decrease marked a significant shift from consistent annual growth in store numbers since the data began, with the underlying trend showing a weakness in store openings over the last 12 months.
The fall in the number of stores is “indicative of the challenges facing high streets” with vacancy rates at historically high levels, it said.
However, retail employment, or total hours worked, in the second quarter of 2012 rose by 1.8 per cent compared with the same quarter in 2011, the equivalent of 12,648 more full-time jobs, according to the BRC’s sample.
The increase was driven entirely by food retailers, with the fastest growth from part-time workers. The total number of hours worked in non-food retailing fell.
The proportion of retailers suggesting that they will decrease staffing levels over the next quarter has fallen to just four per cent compared with 25 per cent for the same period last year.
BRC director general Stephen Robertson said: “Retail as a whole is still where much-needed new jobs are coming from but, within that, it’s food retailing that’s providing more work.
“Big events like the Jubilee celebrations provided a limited boost to employment levels but underlying weakness in the economy and consumer confidence continue to hit sales and job numbers in non-food retailing.
“Overall retail sales growth across the first half of 2012 was no better than a year earlier and the first decline in store numbers among retailers in the survey since it started in October 2008 shows the worst-hit shops being shut as customers hold back spending. Supermarkets, continuing to open smaller-format stores, are masking the potential of a much sharper decline. Without them, total shop numbers would have fallen further.
“Even so, retailers’ sentiment about the coming quarter has improved. A year ago a quarter said they would be cutting jobs. Now that’s only four per cent. And, the relaxation of Sunday trading laws during the Olympics is expected to provide a boost to the number of hours worked over the coming months.”
Christina Tolvas-Vincent, head of retail employment at business law firm Bond Pearce, said: “At first glance there are some positive messages here; rising employment which translates to more than 12,000 extra full-time equivalent jobs and redundancy rates remaining very low.
“Serious concerns remain, however. The number of retail outlets is falling for the first time reflecting the immense pressure on high street retailers in particular, and for non-food retailers employment levels are down.
“It is therefore encouraging to see the government looking at creative ways to bring vacant high street properties back into use and also offering further help to pilot areas under the Portas project.
“Employment intentions have dramatically improved. With 83% planning to keep staffing levels unchanged compared with just 58 per cent last year it looks like retailers are hoping for some light at the end of the tunnel.”
LONDON — Juicy Couture is looking at Regent Street in a new light — a pink one — as it opens the bronze doors of its new unit near Oxford Circus.
Earlier this week, the brand opened a new London unit with a shop fit that’s all about gloriously clashing cultures coming together in a Grade II listed, or historically significant, building.
The walls are decorated with made-in-California palm tree moldings, floors are covered in black-and-white Italian marble arranged like a checkerboard, while the Twenties storefront, with its delicate bronze details, is British.
At night, the transparent glass pavement tiles outside the store light up, bathing the facade in the brand’s signature hot pink.
“It feels like a little jewel box,” said LeAnn Nealz, the brand’s president and chief creative officer, of the 2,375-square-foot store located at 198 Regent Street. “It’s an intimate store, and we wanted the feel to be a bit more residential than in the past.”
The shop fit and store design, Nealz added, are meant to play up the different merchandise categories, with the fashion collection, accessories, fragrances and jewelry on the ground floor; tracksuits and children’s wear on the lower ground level, and Bird by Juicy Couture on the mezzanine.
“We wanted this to feel like the world of Juicy Couture, and to highlight the brand’s different stories and collections,” she said. In homage to its host country, the brand has come up with London-themed charms, totes and T-shirts that scream “Choose Juicy” in hot pink.
The shop windows pay tribute to the 2012 Olympics, which kick off tonight. Nealz and her team have stacked them with mannequins made to look like synchronized swimmers decked in white floral bathing caps, Union Jack bikini bottoms and “Choose Juicy” gold foil T-shirts.
Inside the store, Art Deco-inspired shiny glass cases showcase the jewelry, while a bespoke crystal chandelier —surrounded by original molding — lights up the ground floor. In the back of the store, there’s an original, wrought-iron elevator surrounded by a gently curving marble staircase.
EBay has signed a sponsorship deal with the British Fashion Council, which organizes the twice-yearly London Fashion Week event, one of the largest fashion shows in the world.
EBay says the multi-season sponsorship deal will cover the BFC’s Fashion Forward show—which supports emerging designers in the U.K.—and will be managed by eBay’s fashion arm.
“Partnering with the British Fashion Council provides an opportunity to show our support to emerging British fashion talent, helping them to develop the long-term success of their businesses,” says Melanie Smallwood, head of eBay fashion brands.
The new sponsorship deal comes just a month after eBay made some key personnel changes, including appointing former Sainsbury’s director Tanya Lawler to a newly created role as vice-president of U.K. trading. The company said at the time that the appointment is part of its strategy to drive growth for its existing retail brand and business seller partners, which include well-known U.K. fashion labels Superdry, Bench, House of Fraser and LK Bennett.
Caroline Rush, chief executive of the BFC, says she hopes eBay’s support will open new markets to the emerging designers’ Fashion Forward showcases. “In its sixth year it has grown to encompass both womenswear and menswear designers and now supports seven designers each year; making this the perfect time to announce eBay as its new sponsor,” Rush says. “EBay’s sales statistics are overwhelming and we hope they will help to bring opportunities to the designers they support.”
EBay’s U.K. fashion business grew by between 20-30% last year, outpacing the growth rate of general U.K. e-commerce, eBay said in a statement announcing the sponsorship. The site hosts around 640,000 fashion sellers including more than 100 high street brands and major retailers. EBay says it is looking to add 40 to 60 retailers and brands to its fashion offerings this year. Around 4 million shoppers a month on average look for clothing, shoes and accessories on eBay.co.uk—up from around 2 million a month in March 2010—and consumers buy 636 dresses on average each hour on eBay.co.uk.,eBay says.
While Fashion Forward is six years old, London Fashion Week has been taking place twice a year—in February and September—every year since 1984. It is now considered one of the largest fashion weeks, along with those in New York, Milan and Paris.
Consumers place approximately 100 million British pounds (US $157.29 million) worth of fashion orders at London Fashion Week, according to the BFC.
This season’s event, called London Fashion Week SS13, will mark the start of the partnership with eBay Fashion, which is planning a series of activities, including what the company describes as the biggest-ever online fashion auction in aid of Save the Children’s No Child Born to Die campaign. Designers, celebrities and U.K. fashion media will donate up to 200 items for the auction, which takes place over London Fashion Week and aims to raise 50,000 pounds (US $78,645) for the charity, eBay says.
Smallwood adds that eBay is looking to broaden consumers’ perception of the company. “EBay is more than just an auction house,” she says. “It’s a shopping destination like no other. You’ll find high street brands selling direct alongside smaller boutiques and international businesses as well as consumer sellers. EBay Fashion unites style seekers and enables you to shop anytime and anywhere.”
As retail rents boom in Hong Kong, mass-market fashion retailer H&M says it is closing its flagship location downtown after throwing open its doors just five years ago to considerable fanfare.
When the Swedish company opened its first store in China, in Hong Kong’s Central district in 2007, the mood was one of heady anticipation. At the time, the company had plastered billboards all over Hong Kong’s subways and trams to promote the store’s opening, and eager customers had queued for days to be the first inside its doors.
Now, the company says the 30,000 sq.-foot store will close in fall 2013. It will be replaced by Zara, a Spanish competitor also known for its similar mass clientele and quick inventory turnaround. Cher Chui, an H&M spokesperson, says that the company had been unable to reach an agreement with its landlord. Zara will be paying about US$1.4 million in monthly rent, double what H&M had been paying.
Hong Kong is home to the world’s highest retail rents, with rents jumping 19% since 2011 to reach an annual US$3,864 per square foot, says commercial real estate firm CBRE. Rents in Central grew 6% in the first quarter of this year alone, reports commercial real-estate brokerage Collier International.
“It’s not a big drama,” says Ms. Chui of H&M’s decision to close its flagship shop. “Retail in Hong Kong is so fast and always expanding, so shops do close and then open up elsewhere. This is quite common in Hong Kong,” says Ms. Chui, adding that none of the company’s staff will be affected, and that employees will be reassigned to other H&M locations. Today, H&M has 12 shops in Hong Kong, and 80 in mainland China. “Sales in Hong Kong and China are doing very well,” says Ms. Chui.
Zara declined to comment.
Five years ago, H&M was one of the first global fashion companies to blaze a trail downtown, helping remake a staid and quieter, more banking-oriented strip of Queen’s Road Central, a major thoroughfare. Since H&M set up its massive, multi-storey premises there, says Helen Mak, Colliers’s director of retail services, evening and weekend foot traffic in an area has spiked. “They were a pioneer,” says Ms. Mak of H&M. “More and more international brands followed them. Coach, Diesel Jeans, GAP—they opened downtown and the street got busy.”
Millions of Chinese tourists crossing the border to shop for luxury goods have helped drive the trend. “It’s never been a shopping hub for locals,” says Ms. Mak of the area around H&M. “It’s tourism-driven business.”
For many international brands, it’s a well-trod path: use a big, glossy storefront inHong Kongto build up brand cachet among mainland visitors, then dive into the mainland market with gusto. But retail momentum in Hong Kong has begun to slow, with the city’s May retail sales clocking lows in value and volume not seen since 2009. A number of brands have decided to skip Hong Kong and go straight for mainland China, says Joe Lin, CBRE’s senior director of retail services.
“Most of the luxury retailers are pretty conservative right now,” says Mr. Lin. While previously retailers were willing to pay premiums of even 30% above market rate to secure prime locations, says Mr. Lin, compared to even three or four months ago, most are reluctant.
H&M’s move marks the latest in a string of other retailers in Hong Kong that have also been displaced by higher-paying competitors. In 2010, Forever 21 took over the five-story Causeway Bay premises previously occupied by local retailer Giordano’s, paying double the latter’s rent for the privilege. Last year, Abercrombie likewise bid up the rent to displace long-time tenant Shanghai Tang, a Chinese-styled luxury retailer, which had been occupying a historic commercial building downtown.
A new campaign aiming to bring luxury British retail brands to the Middle East has started talks with big names, its UK-based CEO has said.
The Anglo Arab Alliance (AAA) plans to provide “easy and efficient access” into the lucrative Middle Eastern market for the UK’s top-end names.
The launch comes as a report by Ban & Co predicted the Middle East’s luxury goods market is set to grow by 15 percent this year, leading a global uptick in the sector.
By purchasing products directly from the brands, AAA said it will then negotiate, develop and market deals in the region, “cutting out any red tape, cultural differences and legal issues”.
“AAA has worked hard to develop strong relations and strategies to help high-end British businesses gain a foothold in the thriving Middle Eastern market,” said Andrew Lloyd CEO (UK).
“We are already working with a number of very well known British luxury brands and are very excited about the future.”
The Middle East is experiencing a boom in the demand for luxury brands, with French and Italian brands currently dominating the market.
“The decision to open trade solely for British luxury brands is based on AAA’s ethos to promote trade with the Middle East, support and develop home-grown businesses and establish itself as a leading authority, providing high-end British brands with unparalleled service and knowledge of this complex market,” it said in a statement.
It added that the Middle East was “notoriously difficult for luxury brands to penetrate” but with backing from royalty, embassies, consulates and some of the region’s most powerful businessmen, AAA said it was confident it would be able to break down barriers.
AAA said it will negotiate a master licence agreement for the Middle East from British luxury brands and will then purchase substantial quantities from these brands so they will be protected by UK laws.
AAA will then develop and market these products in the Middle East through the single largest network of luxury retailers in the region, it added.
The Anglo Arab Alliance has the backing of the Saudi Arabia General Investment Authority (SAGIA) in the Middle East, The Royal Warrant Holder’s Association in London and UK Trade & Investment.
Our annual global examination of retailer presence and expansion surveys 326 major international retailers across 73 countries and records the evolution of the global retail market. The survey identifies the most active international retailers and their top target markets at country and city level in 2011. For the first time, we identify the global hotspots for shopping centre development and explore the importance of new centres in attracting cross-border retailers. Last year’s ground-breaking research on the online capability of retailers has also been updated, revealing retailers’ online target markets and how multi-channel retailing is developing in different countries.
Dubai International’s new purpose-built A380 facility, Concourse 3, will boast a total of 16 food and beverage concepts when it opens next year, its operator said on Wednesday.
Dubai Airports said the offerings will range from Giraffe, the international family restaurant which will open its first outlet in the Middle East at Dubai International to French cafe Paul.
“As the quality and choice of food and beverage outlets is an increasingly important measure of any airport’s overall reputation, we considered it essential to provide the right mix of trusted brands appropriate to Dubai International’s diverse passenger base,” said Eugene Barry, senior vice president commercial at Dubai Airports.
“We believe that we have come up with a portfolio that will not only ensure high standards of quality, value and service, but will also inject excitement into a very special terminal.”
Selected through a highly competitive process which involved local and global operators, the successful brands have been challenged to deliver outlets which exceed the norm, he added.
In addition to Giraffe, there are also several new brands to Dubai, including Umaizushi Bistro and Picnic, managed by HMS Host International, as well as Costa Metropolitan – a more urban version of the already popular Costa Coffee managed by Emirates Leisure Retail across Dubai International.
The full list of concessions includes Paul, Umaizushi Bistro, Picnic, Wafi Gourmet, Carluccio’s, Cho Gao, Pulp Juice Bar, McDonalds and McCafe, Shake Shack, Costa Metropolitan, Starbucks, Le Pain Quotidien, Giraffe, Heineken Lounge, Jack’s Bar & Grill and Moet & Chandon Champagne Bar.
In addition, the facility will have a non-branded food court, to cater for all budgets and tastes, a statement added.
Concourse 3 is on track to open in the first quarter of 2013.
The facility, which will cater solely for Emirates flights, is spread over 500,000 sq m and 10 levels.
Concourse 3 will increase the airport’s total capacity from the current 60 million passengers per annum to 75 million passengers and meet the demand for more gates able to accommodate Emirates’ growing fleet of A380 aircraft.
The new building will have entire floors dedicated to business and first class passengers, allowing them to board directly from the lounge facilities.
LVMH Moet Hennessy Louis Vuitton SA, (MC) the world’s largest maker of luxury goods, reported a 20 percent increase in first-half earnings and said it approaches the second half of the year with confidence.
Profit from recurring operations climbed to 2.66 billion euros ($3.27 billion), the Paris-based company said today in a statement. The median of six estimates compiled by Bloomberg was 2.71 billion euros. Sales rose 26 percent to 12.97 billion euros, or 12 percent excluding currency swings and acquisitions.
LVMH Moet Hennessy Louis Vuitton SA, the world’s largest maker of luxury goods, reported a 20 percent increase in first-half earnings.
LVMH Moet Hennessy Louis Vuitton SA, the world’s largest maker of luxury goods, reported a 20 percent increase in first-half earnings. Photographer: Jerome Favre/Bloomberg
Hermes International SCA (RMS), in which LVMH has a stake, last week reported a 13 percent revenue increase, allaying concern that Europe’s debt crisis and slowing growth in China are taking a toll on demand for high-end goods. Global sales of luxury goods may rise 7 percent in 2012, CA Cheuvreux analyst Thomas Mesmin estimates.
“We approach the second half of the year with confidence and are relying upon the creativity and quality of our products as well as the effectiveness of our teams to pursue further market share gains in our historical markets as well as in high potential emerging markets,” LVMH Chairman and Chief Executive Officer Bernard Arnault said in the statement.
Luxury department store Harvey Nichols has announced plans for a one-stop beauty destination that they hope will become “a global beacon of beauty”.
‘Beauty Bazaar, Harvey Nichols’, will provide the ultimate luxury beauty experience by offering wealth of products, brands and services housed within a cutting-edge, luxurious and opulent environment. Utilising an impressive 22,000 sq ft of prime retail space, the store will extend across three floors in the heart of Liverpool’s fashion hub – the Liverpool ONE shopping Centre.
The ground floor will house a diverse array of beauty, skincare and fragrance brands including Chanel, YSL, Tom Ford Beauty, Crème de la Mer and Jo Malone, while the first floor will be dedicated to treatment services including Mark Woolley’s Electric Hair Lounge, a Blink Brow Bar ( maybe they’ll specialise in the ‘Scouse Brow’ ?) and both a Lash and Nail Bar. They’ll also be a Champagne and cocktail bar which the company hope will become a social destination in itself.
The final floor will offer a range of treatments, including unisex waxing and spray tanning, whilst Beyond MediSpa will focus on specialist services such as teeth whitening, permanent makeup, Botox, fillers and body contouring treatments.
“Beauty Bazaar, Harvey Nichols is our latest innovation and will transform the beauty landscape. It will redefine luxury beauty and be the antidote to the commoditisation of beauty,” said Harvey Nichols Group Concessions and Beauty Director, Daniela Rinaldi, who is leading the development of the new store. “The concept will allow customers the opportunity to be pampered and preened with the very best top-to-toe treatments available and provide access to the most important brands available in beauty.”
Apple made a net profit of $8.8bn (£5.7bn) in the three months ending in June, up 21% from a year earlier but lower than forecasts. Strong iPad sales failed to offset disappointing sales of iPhones in the three months to 30th June.
The consumer gadget and computer maker reported $35bn in sales, up from $28.6bn in 2011. But sales of its iPod digital music player fell 10% while Mac computer sales flatlined, up just 2%. It will pay shareholders a rare dividend of $2.65 per share on 16th August.
Apple, the world’s most valuable company, sold 26 million iPhones, a rise of 28%; but slower growth than many analysts had forecast. By contrast, sales of Apple’s tablet computer, the iPad, rose 84% from the same period last year.
Tim Cook, Apple’s chief executive, said: “We’re thrilled with record sales of 17 million iPads in the June quarter.”
But David Rolfe of Wedgewood Partners said: “What is key is the mixture between iPhone and iPad, the iPhone has higher margins. iPhone sales were lower than expected – meaningfully lower – and that translates into a big hit on the bottom line.”
Analysts had forecast third-quarter revenue of $37.2bn, according to a Thomson Reuters poll. Apple’s forecast for sales in the fourth quarter – the three months ending in September – was still lower at $34bn, which disappointed investors.
Apple shares fell nearly 5% in after-hours trading.
Crocs Inc reported a quarterly profit that beat Wall Street expectations helped by higher gross margins and growth in Asia, and the shoe maker forecast strong full-year earnings.
Crocs, which sells its footwear in more than 90 countries, said it expects a full-year profit of $1.50 to $1.54 per share.
Analysts on average are expecting earnings of $1.47 per share, according to Thomson Reuters I/B/E/S.
Crocs, which is trying to tap into the strong demand in emerging markets such as India and China, expects Asia to become its biggest market by the end of 2013. Sales in Asia, which accounts for 44 percent of the company’s revenue rose 20.5 percent in the second quarter.
Gross margins rose to 59.3 percent in the second quarter from 57.6 percent last year.
Net income at the company, known for its colorful clogs, rose to $61.5 million, or 68 cents per share, up from $55.5 million, or 61 cents per share, a year earlier.
Analysts were expecting earnings of 63 cents per share.
Revenue rose 12 percent to $330.9 million, but missed analyst expectations of $339.9 million.
Shares of the company, which competes with Deckers Outdoor Corp, Skechers USA Inc and Steve Madden Ltd , were up 4 percent after the bell. They closed at $13.89 on Wednesday on the Nasdaq.
YET another British High Street chain is set for Australian shores. River Island has formed an alliance with Australian local, Retail Apparel Group, who own brands including Tarocash and YD, and are actively seeking real estate sites in Melbourne and Sydney.
River Island is a fast fashion retailer with high turn over and low price pointed stock.
The move follows a mass influx of overseas brands entering the Australian retail market, including UK based Topshop, Spanish fast fashion chain Zara and rumours of Swedish giant H&M hitting town.
“At this stage Retail Apparel Group has formed an alliance with River Island and are looking for sites in Australia,” RAG General Manager of Business Strategy Alan Radomsky said.
Radomsky would not be drawn on the nature of the `alliance’ but the venture is the RAG’s first foray into womenswear.
RAG founder Stephen Leibowitz said the deal with River Island UK has been a year in the making.
Leibowitz said they would certainly consider the new Emporium site in Melbourne’s CBD for the store.
“We would consider anything as long as it is the right deal,”
Leibowitz said a shopping centre was probably out of contention because the floor space River Island needs is very large.
“We need around 1500 square metres,” he said.
RAG could not confirm if Melbourne or Sydney would be first to get a new store.
The retail group hope to open the first Australian River Island store by early 2014.
The chief executive of JJB Sports is poised to step down after a string of profit warnings and emergency fundraisings left shareholders in the company facing a bleak future.
I have learned that Keith Jones, who has run JJB only since March 2010, is expected to leave within days. Directors of the company are understood to be discussing the departure of Mr Jones this evening and an announcement could be made as soon as tomorrow morning.
JJB has endured a torrid few years during which it has been rescued three times by investors and axed dozens of stores in a desperate survival bid.
JJB’s shares plunged a week ago after it disclosed that the Euro 2012 football tournament had failed to produce the anticipated uplift in sales.
It was the latest in a string of profit warnings and raised fears that the company would not last until the key Christmas trading period without a fresh cash injection.
Abu Dhabi, UAE, July 25 2012: As part of its commitment to create an exceptional shopping hub in Bani Yas City, Baniyas Investment and Development Company (BIDC) – the investment arm of the Bani Yas Sports Club – has signed an agreement with Azadea Group, one of the region’s leading retail groups, to open eight new outlets at Bawabat Al Sharq Mall.
Covering over 1,604 square meters of retail space, Azadea Group will unveil a wide array of the world’s most recognized fashion brands as well as food and beverage outlets at Bawabat Al Sharq Mall.
Oysho brings fashion to the lingerie market and offers women an inspiring range of contemporary designs that look sensational at affordable prices. For those who are looking to enter a world of magic and delight, Intimissimi, part of the Italian Calzedonia Group, is yet another reference point in the lingerie category for both men and women.
Piazza Italia is a kids’ fashion market leader in Italy and a key destination for all young families. Its collection offers over 4,000 styles through several exclusive and trendy product lines. Gymboree, another brand catering to children’s wear, carries stylish high-quality children’s clothing and accessories in sizes newborn to age 12. Gymboree’s clothing is designed in colorful, premium fabrics and detailed finishings throughout. Their outfits are completed through the addition of accessories, making Gymboree kids unique from head-to-toe.
Mango is a unisex fashion and accessories brand whose story began in Barcelona in 1984 and has grown into Spain’s second largest textile exporting company. Mango provides fashionable clothes, shoes and accessories for today’s modern, urban men and women, while Sunglass Hut, the largest sunglasses specialty retailer in the world with a global reputation for premium brands, offers the latest designer brands with outstanding customer service.
In addition to the host of popular brands which automatically adds flavor to the shopping experience, Azadea Group will also be opening the first outlets in the UAE for Jules, a French fashion brand providing young professionals and students with the latest fashion trends in terms of comfortable clothing and accessories.
Aside from these renowned brands, Azadea Group will also reveal PAUL’s first bakery branch in Abu Dhabi that spreads across 339 square meters in Bawabat Al Sharq Mall. Opening its first outlet in 1889, PAUL Café has grown from a small family bakery into a successful international brand carefully designed to incorporate the very latest food preparation and display technology, whilst retaining traditional Gallic character. Each shop offers a diverse menu of snacks and refreshments including more than 140 types of traditional French bread, all prepared and baked in-house.
In his commentary, Subhi Benkhadra, CEO of Baniyas Investment and Development Company said, “Baniyas Investment and development has managed to create a unique tenant mix at Bawabat Al Sharq Mall leading to an outstanding increase in demand for retail space. We are delighted to know that our endeavors are continuously successful and are happy to sign with Azadea Group which only adds to the wealth of our tenant mix and embraces some its brands’ first outlets in the UAE. This is a strategic relationship with Azadea Group as BAS Mall provides a new platform that supports their expansion plans and further strengthens their outreach into Baniyas City and the catchment area.”
Said Daher, CEO of Azadea Group stated, “Our aim is to continuously provide our customers with a memorable and exciting shopping experience. This partnership with Baniyas embraced our brands’ expansion plans through great retail space, allowing for the inauguration of eight new outlets. Overall, we are certain that this agreement will only bring forth great outcomes and strengthen our positioning in the UAE, especially in the city of Abu Dhabi.”
Baniyas Investment and Development has already signed Carrefour Hypermarket, the pioneer French Hypermarket, Grand Cinemas, M.H. Al Shayaa Group, Landmark Group and Liwa Trading Enterprises for BAS Mall. In fact, these groups have all opened their outlets and are running their business at the area’s first state-of-the-art shopping center.
Bawabat Al Sharq Mall will host approximately 240 prime retail shops of fashion wear, electronics, neighborhood services, accessory outlets and jewelers spread across two floors covering 62,265 square meters of gross leasable area in the mall.
About Baniyas Investment and Development
Baniyas Investment & Development Company was established in 2005 as a majority owned subsidiary of Bani Yas Sports Club. It is the investment and development arm of the Bani Yas Club with its main activities focusing on investment, development and management of real estate projects. Aiming to play a pivotal role in contributing to real estate development, Baniyas adheres to the highest standards of integrity in its business dealings. Currently, the company has an impressive pipeline of opportunities and projects including master planned communities, residential and commercial towers in the UAE, with Bawabat Al Sharq representing the first of several pioneering plans to be publicized by Baniyas in due time. Bawabat Al Sharq will elevate the leisure, commercial and tourism appeal of Bani Yas.
About Azadea Group
Azadea Group is a premier fashion and lifestyle retail company that owns and operates more than 40 leading international franchise concepts across the Middle East and North Africa. Since its inception in1978, the Group has grown a substantial chain of stores representing leading international brand names in fashion and accessories, food and beverage, home furnishings, sporting goods and multimedia. With over 7,300 employees, the company boasts a solid infrastructure overseeing 415 stores spread across 13 countries including United Arab Emirates, Saudi Arabia, Egypt, Kuwait, Iraq, Qatar, Oman, Bahrain, Jordan, Algeria, Turkey and Lebanon.
JCPenney has started to transform its department stores into the shop-in-shop format that CEO Ron Johnson envisioned. The first shops were recently unveiled at its location in New York City’s Manhattan Mall.
But there’s much more going on behind the scenes down in JCPenney’s home state of Texas.
The retailer has a prototype store at an undisclosed location in Dallas. Maria Halkias at the Dallas Morning News was given a tour of the store earlier this week, and Johnson himself asked that the store’s location be kept a secret.
She writes that the look of the store is “new and different,” and that it “doesn’t exist in the market today.”
The Dallas Morning News describes the prototype store:
“Instead of one big traditional department store, think of streets lined with shops and a town square in the middle.
“Individual shops have their own fixtures and lighting. Counters with stools — Apple store mainstays that started with the genius bar Johnson created a decade ago in his former job — are a common feature in the street mockup.
“Checkout counters with cash registers are replaced by seating areas with sofas or long tables with built-in iPads and stools where shoppers can sit and access the Internet. At the end of the mocked-up street is a snack bar with a seating area and small tables.”
Employees will all carry mobile checkouts with them, and there will be “multipurpose bars” around the store where shoppers can pay, return products or get help.
Vendors will be coming to Dallas to look take a tour as well. All of JCPenney’s 700 largest stores will look like this one by the end of 2014.
Nina Garcia, a judge on “Project Runway” and fashion director at Marie Claire, also got a tour of the prototype. She recently teamed up with JCPenney as the brand’s “style voice and fashion collection curator.”
Garcia tweeted a glowing review of the prototype store earlier today. She declares it a “game changer”:
Booming demand for mid-priced watches in China is more than offsetting a slight cooling at the top end of that market, world No. 1 watchmaker Swatch Group said on Tuesday as it stuck to a forecast for record annual sales.
Famous for its colorful plastic watches and also behind luxury brands including Omega – featured in this year’s James Bond movie, Swatch is set to overcome all risks, including fallout from the euro zone crisis, Chief Executive Nick Hayek told Reuters in an interview on Tuesday.
“Our sales objective for 2012 is and remains to achieve 8 billion Swiss francs,” Hayek said. Last year Swatch Group beat its sales goal for a record 7 billion Swiss francs ($7 billion).
The company, whose Omega brand is the official timekeeper for the London Olympics, reported first-half sales up 14 percent to 3.85 billion francs, while net income after minorities rose 25 percent to 720 million francs, beating the 672 million forecast in a Reuters poll.
Shares in Swatch Group rose 2.8 percent to 371.9 francs by 6:03 a.m. EDT (1003 GMT), outperforming a 1 percent rise in the European sector index .SXQP.
“Swatch Group’s strong presence in the medium-priced segments should help the company offset any given weakness in the high price end,” said Helvea analyst Michael Heider, who rates the stock as “accumulate”.
The Asia-Pacific region, mainly driven by China, is the fastest-growing luxury market in the world, buoying watch- and handbag-makers as shoppers in Europe, the world’s biggest luxury market, reduce spending due to the economic crisis.
However, after figures showing China’s red-hot growth is cooling somewhat, signs are mounting that demand for ultra-pricey timepieces there is diminishing, Swatch said.
“We see a slowdown in the very high end. But if we talk about slowdown, it’s relatively healthy,” said Hayek.
The group was still seeing overall growth rates of more than 20 percent in China, and outside China high-end sales remained strong, he said. Swatch’s mid-range watches include Tissot and Certina brands.
So far, evidence of a slowdown in the Chinese luxury sector is mixed. In May, Tiffany & Co cut its profit forecast, blaming slowing growth in important markets such as China, but rival Richemont, the maker of Cartier jewelry, said in May also that the Chinese market was still strong despite a slight weakening in some coastal cities.
French luxury groups Hermes and Remy Cointreau have also sounded optimistic, saying the Chinese were still snapping up Birkin bags and rare cognacs.
In addition to rising prices for diamonds and gold, the strong Swiss franc has squeezed margins at Swatch.
Yet a stabilization of the exchange rate, in part because the Swiss National Bank capped the franc at 1.20 per euro last September, had a positive effect on revenues during the first six months of the year, the company said.
Hayek, who has been outspoken in his calls for a weaker franc, said he supported the SNB policy which he said was protecting Swiss industry from speculators.
Dutch fashion label SuperTrash is set to make its UK debut later this year after acquiring its first store on South Molton Street, marking the beginning of the company’s long-term strategy to significantly increase its store presence in the UK.
The South Molton Street store, formerly occupied by footwear brand Office, is due to open mid October, and will follow a similar minimal designer concept feel to the brand’s recently acquired store on Prince Street, New York, which has seen the brand progress from a walk-in wardrobe look to a clean design.
The store has been acquired on a ten-year lease and will see the brand join a number of high-end retailers including Ted Baker, Karen
Millen, Sandro, and Maje located on the North side of the pedestrianised street, just off Oxford Street.
SuperTrash, headed by Dutch entrepreneur Olcay Gulsen, is already one of the biggest names on the Netherland’s high street and is looking to emulate that success in the UK. In 2004 when Gulsen joined SuperTrash, the brand was a small scale boutique, although after taking over in 2009, the brand has grown worldwide and now offers a range of clothing, perfume, lingerie lines, shoes, as well as its own magazine.
Commenting on the UK expansion, Gulsen said: “We are very excited to have acquired our first store in London, beginning our store expansion drive in the UK. Our brand has grown rapidly in Europe since launching in 2004 and we are confident that it will see the same success in the UK market as we have in the Netherlands and Belgium.
The opening of a first London store at South Molton Street is a significant step forward in the brand’s evolution and marks the beginning of a long-term strategy to significantly increase its presence in the UK, with CBRE
instructed to find further prime locations in the capital over the next 12 months.”
Currently SuperTrash is sold in more than 24 countries, has over 1600 points of sale, and operates eleven standalone stores in The Netherlands and Belgium.
US apparel retailer Express has announced it will open its flagship stores in New York and San Francisco next year.
The 30,000 sq ft store in Times Square, New York will open next summer, while the 16,000 sq ft flagship store in Union Square, San Francisco is expected to open in autumn 2013.
Michael Weiss, chairman, president and CEO of Express, said: “These flagships will not only reflect the strength of our fashion authority within these two cities, but also serve as a gateway to our brand for international visitors and shoppers as part of our international expansion strategy.”
The government has announced a second wave of towns that have been accepted into the Portas Pilots scheme aimed at reviving the UK’s high streets.
A further 15 town centres have been selected to participate in the scheme which will see them share £1.5 million in funding to help improve their town centres. This takes the total number of Portas Pilots to 27.
The 15 new pilot areas have been announced as Ashford, Berwick, Braintree, Brighton, Hatfield, Royal Leamington Spa, Liverpool, the Waterloo area of central London, Forest Hill in south London, Tower Hamlets, Loughborough, Lowestoft, Morecambe, Rotherham and Tiverton.
Local government minister Grant Shapps said: “I’d like to congratulate the 15 town teams that, in the face of stiff competition, have been selected to be the next Portas Pilots.”
The scheme received over 370 applications following a report by Mary Portas on the state of the UK’s high streets. Those not selected will be able to bid for a share of a £5.5 million pot for individual projects.
In addition to the government funding, the pilots are being supported by the British Retail Consortium which is offering the towns a free package of benefits for the initial 12 months of their existence. This includes access to the BRC’s suite of retail-sector performance statistics and intelligence on the legislative agenda.
British Retail Consortium director gGeneral Stephen Robertson said: “The Pilots are a good start towards meaningful action which could help town centres turn their fortunes around. Announcing more Pilots will provide a wider platform of support for regeneration across England and we want to back that by pledging our own package of practical help to them at no cost.
“Offering the 27 access to our valuable business information will help them better manage and plan their activity, making it more likely they can deliver the revival we all want.”
Jon Copestake, retail analyst from the Economist Intelligence Unit comments,“Given the small sums involved this looks more like a Government PR exercise than an appropriate measure. The average grant of £100,000 per town is equivalent to the amount Home Retail Group would spend on refurbishing a single Argos store. The larger proposed investment of £5.5m is still a drop in the ocean compared to the needs of the high street. Store occupancy rates hit an all-time low this year and tens of thousands of lots are empty. With the structural challenges shops face and a further slump in GDP announced today, the high street will be hoping for more than piecemeal funds of this kind.”
LOS ANGELES, July 25, 2012 /PRNewswire/ — American Apparel, the vertically integrated clothing manufacturer based in downtown Los Angeles, has announced the launch of three new merchant stores on Amazon Marketplace in the United Kingdom, Germany and Japan.
The three new stores follow the success of American Apparel’s US deal with Amazon, which launched in 2010. The stores were launched in order to reach out to customers who are new to American Apparel and its products.
“With our origins as a wholesale manufacturer, our emphasis has always been on dependable, quality products. We’re really excited to let them speak for themselves on Amazon and introduce the brand to more people in the UK, Germany and Japan,” said Dov Charney, founder and CEO of American Apparel.
American Apparel will offer its full product line on Amazon, as well as occasional promotions and offers. Aside from the use of the Amazon e-commerce platform, the company’s photographs, descriptions, customer service and shipping options will remain the same. Orders will be processed and shipped from American Apparel’s vertically-integrated headquarters in downtown LA and returns will be accepted and processed locally by the companies offices in those countries.
The company chose Germany and the United Kingdom based on its current strong sales numbers in those regions. The German store can be accessed at http://www.amazon.de/, UK store at http://www.amazon.co.uk/ and the Japan store at http://www.amazon.co.jp/. American Apparel offers free shipping for British orders over £100, German orders over €100, and Japanese orders over ¥7,500. The company will also offer low-cost flat-rate shipping for smaller orders. All three regions have customer service support in their local languages.
In addition to its four Amazon stores, the company also operates its own 12 regional web stores and recently launched a mobile store in Japan.
About American Apparel
American Apparel is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel based in downtown Los Angeles, California. As of June 30, 2012, American Apparel had approximately 10,000 employees and operated 253 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea, and China. American Apparel also operates a leading wholesale business that supplies high quality T-shirts and other casual wear to distributors and screen printers. In addition to its retail stores and wholesale operations, American Apparel operates an online retail e-commerce website at http://www.americanapparel.net.
Community pharmacy & healthcare retailer Lloydspharmacy has today confirmed up to 200 job losses at its head office by early next month.
The planned restructure at its head office in Coventry will affect those working in the IT, finance and human resources departments.
It follows a 90 day consultation held in conjunction with sister business Germany-based Celestio UK and AAH Pharmaceuticals.
Discussions with Celestio UK involved current terms and conditions and benefits in employee’s wages for those still under contract.
In January, Managing Director for the group Tony Page left his post without being replaced, leaving a growing question mark over employment security.
Earlier this month, luxury fashion brand Nicole Farhi announced job cuts at its head office following a six month review of the company’s financial situation.
A spokesperson for Celestio UK said that this is still an issue in flux, adding that the healthcare provider will be able to give more of a clear idea of its position in the coming weeks.
“We can confirm that the head office functions of Celesio UK businesses Lloydspharmacy and AAH are being restructured,” said the spokesperson.
“The process is still ongoing and as such we are not able to confirm details at the moment.
A dramatic fall in shoppers from the south is costing the Northern Ireland economy up to £270m a year.
This is the size of the slump since the border rush three years ago in 2009.
The news comes after the euro – one of the main drivers of south-north shopping – fell to a four-year low against the pound last Friday.
An official Irish government report in 2008/09 estimated that the flow of cross-border trade was worth £370m annually to the province.
Since then, there has been a significant slump in southern consumer spending in Ulster shops because of the harsh economic climate.
Economist John Simpson said cross-border shopping amounted to £500m a year at its peak — but he estimated that it has now fallen to £100m.
“In 2009 when cross-border trade was going very strongly it was worth over £370m a year to Northern Ireland’s economy,” Mr Simpson said.
“We are now in a position where there is very little by way of an artificial incentive for that trade to cross the border so we’ve come back to what might be considered more normal cross-border trade.
“By my calculations, it is estimated that the £370m figure for 2009 is probably down now to less than £100m per year.”
The halcyon days of 2008/09 saw countless southern-registered cars streaming across the border to shopping centres in towns and cities such as Newry and Londonderry every day.
Indeed, during a strike by more than 250,000 public sector workers in the Republic in November 2009 there was a five-mile traffic tailback on the road to Newry as striking workers chose shopping over picketing — an event that was much-publicised in the media.
These so-called ‘Euro Tourists’ were taking advantage of massive price differences between identical items in shops on either side of the border as a result of a weak pound and favourable VAT and currency exchange rates.
By August 2010, however, the ever-deepening recession meant south-north trading had slowed to a trickle, with official reports confirming that numbers had fallen to their lowest level since September 2008.
Last Friday the euro was valued at 77.71p — a four-year low against the pound — which is likely to further dissuade the majority of southern shoppers from heading north.
A snap survey carried out by the Belfast Telegraph last week in Dundalk and Newry revealed that the huge savings of up to 30% that were once available on clothes and other items during the boom years had disappeared.
Eileen Doyle, manager of the clothing retailer Louis Boyd in Newry’s Buttercrane Shopping Centre, said there had been a drastic fall in customers from the south.
“I have definitely noticed a difference over the last two years,” she said.
“The weak euro has discouraged a lot of people from the Republic from coming to Northern Ireland as often as before and when they do come they aren’t spending as much money in the shops as they used to.”
Meanwhile, retailers in Letterkenny, Co Donegal, have launched a campaign targeting their Derry neighbours as sterling continues to strengthen against the euro.
As business flags, they hope this will recreate the 2008/09 trend in the opposite direction by offering deals to people from Northern Ireland.
At The Marshes in Dundalk, shopping centre manager Harry Traynor, said that he had recently noticed an influx of vehicles with northern registrations in local car parks. “More people have been coming to Dundalk from Northern Ireland recently, but we’re only talking about a tiny percentage increase at this stage,” he said.
Donegal traders bid to lure customers
By Brendan McDaid
The north west is also suffering as southern shoppers stay on their side of the border.
To compound the problem for traders in the region, the Donegal shopping hub of Letterkenny has launched a campaign to lure customers away as sterling continues to strengthen.
A raft of new initiatives have been introduced including strong pound-to-euro rates, billboard signage in Londonderry and summer discount projects co-ordinated by the Letterkenny Chamber of Commerce.
Many stores in Donegal’s largest town are now offering exchange rates of around €1.25 for £1 sterling, while hotel room deals are also being organised.
The new drive comes as the euro continues to weaken against the pound.
Traders in Letterkenny and across the southern side of the border have suffered over recent years as a strong euro saw droves of people from across the Republic heading into Derry and other parts of Northern Ireland to do their shopping, while the influx of customers from Northern Ireland to the south largely dried up.
There was a mixed reaction among traders in Derry city centre, with some reporting no change, while others started to feel the effects of Republic of Ireland shoppers staying closer to home.
Bobby Nicholson, manager of the Richmond Centre, said: “We have seen a big impact, with a significant drop in cross-border trade. We feel that there are other factors in this – not just the impact of the strong pound but the cost of fuel.”
He added that a rise in tourism has led to higher sales and said “this is encouraging moving towards the City of Culture year”.
Ray Hetherington, store manager for Debenhams, agreed that more tourists and the spin-off from the “vibrant buzz” in Derry was helping to offset the falling number of cross-border shoppers.
He said turbulent exchange rate fluctuations this year coupled with the prohibitive fuel costs had resulted in a significant downturn in euro cash transactions for many retailers in Derry.
But Austin’s Department Store seems to be retaining its southern customer base.
Spokesman Declan Hassan said: “We haven’t seen a drop in our Republic customers. We offer a very good rate at £0.80p and find this works very well for us.”
City centre manager Jim Roddy said that Derry and the wider north west region remained among the cheapest places to shop and stay anywhere in Ireland.
“Derry is extremely cheap for everything from retail to hotels to night-time economy such as bars, eating out, taxis.”
The chief executive of Londonderry Chamber of Commerce, Sinead McLaughlin, agreed. “Derry remains a value for money destination in relation to retail and tourism,” she said.
We’re the victims of our own success as eurozone flounders
By David Elliot
We have become a victim of our own success.
Because the UK didn’t sign up to the euro, isn’t having to hold the hand of Greece, Italy, Spain or the Republic and has at least shown some signs of economic recovery, the world’s markets have placed sterling well ahead of the single currency on the list of the world’s safer investments.
In fact, because the cost of bailing out those troubled European nations has been mounting by the day, the euro has joined the list of “wouldn’t touch with a barge pole” currencies on foreign exchange traders’ desks.
The result has been that the euro has steadily fallen in value against the pound and brought us back to levels not seen since the bad days of 2008 when we were in the depths of global recession.
And you could argue that it’s not really justified, particularly when you look at the latest UK economic data which, ironically, placed us right back in negative growth as we complete the second leg of the dreaded double-dip recession.
Although it might be great for those of us heading to Europe on holiday, the strengthening of the pound is just another impediment to the economy’s recovery.
A stronger pound means exporters from Northern Ireland to Europe have to lower the price of their goods if they’re to compete and that generally means eating into already slim profit margins
So where is the euro/sterling exchange rate headed?
The most learned minds in the ‘forex’ world aren’t able to tell us with a great deal of certainty because most are waiting to see whether the bailed out European nations manage to stick to their harsh austerity measures.
Our biggest export destination is the one we share a border with and, probably luckily for us, is one of the bailout nations managing its recovery impressively.
But it’s Spain and Greece in particular which are worrying investors and keeping the value of the euro down.
Until they show the same type of discipline in making cuts to public services, its unlikely the single currency is going to make any form of a meaningful recovery.
Given recent protests in both countries and voter preference of parties which oppose the austerity measures, that’s not likely any time soon. In the meantime, get used to paying only 78 pence for a euro.
FASHION retailer Mr Price ’s online store will be live on Monday July 30, CEO Stuart Bird confirmed on Tuesday.
The retailer aims to use its venture into e-commerce to help it gain market share from rivals Foschini , Woolworths and Truworths. Competition in the clothing space has also been boosted with the arrival in South Africa of foreign groups such as Zara and Cotton-On.
“An online selling capability will enable Mr Price to further strengthen relationships with our target customers, who are tech savvy and require a convenient and secure way to get their fashion,” Mr Bird said. “Customers around the country will be able to access the full range of merchandise that was previously only possible by shopping at one of the larger stores.”
By global standards, e-commerce in South Africa is relatively limited, although online retail sales have shown a steady increase over the past five years as a growing number of tech-savvy consumers turn to the net for bargain hunting.
Mr Price’s online store, which will also be accessible via cellphones, will offer the full Apparel range of about 18000 fashion items. It will cost shoppers R35 per delivery anywhere in South Africa and offer several methods of payment.
The store will also be accessible via cellphones.
Mr Price Home and Mr Price Sport are expected to follow with online stores next year.
The integration of a retailer’s offline and online presence is often referred to as a “bricks and clicks” or “clicks and mortar” business model. It has been easier for traditional retailers with extensive logistics and supply chains to implement this type of model than for start-up companies.
Syd Vianello, analyst at Nedbank Securities, said he was not surprised that Mr Price was going the e-commerce route.
“If consumers trust the brand and are relaxed, they will buy the product online,” he said. “Woolworths has moved in that direction. It’s what’s happening overseas — people are buying the George line from Asda online, as well as other big brands online.”
MasterCard’s Worldwide Online Shopping Survey, released earlier this year, said that the number of South Africans shopping online had steadily increased over the past two years, with 58% of respondents saying they used the internet for shopping — an increase from 53% in 2010.
According to Arthur Goldstuck, MD of internet research provider World Wide Worx, once people become experienced internet users, their propensity to shop online increases dramatically.
“The key is to convert that propensity into shopping behaviour,” he said, adding that from 2013 the participation curve would rise significantly and quickly, leading to growth in the number of online shoppers and shopping options available.
By Caroline Barnes 11:51AM – Tue 24th July 2012
High street retailer Marks and Spencer (M&S) has launched a new store in Kazakhstan, it has been announced.
Guests attending the opening were treated to a fashion show featuring the latest collections at the retailer followed by entertainment and cocktails.
British Ambassador to Kazakhstan David Moran and M&S Regional Director Mark Koprowski were on hand to cut the ribbon marking the official opening of the retailer’s store expansion in Almaty, Tusum.
Trading over three floors with a retail space of 1,400 sq m, the store aims to provide a unique shopping experience and features all lines currently offered in the UK, including luxury range Autograph and its Limited Collection.
Last week, the retailer came under fire for the introduction of two current accounts which will charge an ongoing fee each month and start with an opening fee of £20 and £15 respectively.
Kazakhstan is viewed as an ideal location for the company due to the development of its clothing market and there are plans for further expansion in the Middle Eastern country following the initial opening.
Koprowski explained that the retailer, which earlier this month reported a like-for-like sales drop of 2.8 per cent over its first quarter, is set to take full advantage of new trade from emerging markets.
He commented: “We’re delighted to be opening our first store in Kazakhstan this summer.
“Tsum in Almaty is the first of several new M&S stores planned for Kazakhstan and will feature our latest fashions and store design.
“We’re looking forward to welcoming local customers to our store.”
Erin Heatherton, a current Victoria’s Secret Angel, wears the brand’s ‘Showstopper’ set. Photo: Victoria’s Secret
The first of the two planned Victoria’s Secret London stores opens this morning in east London’s Stratford, the home of the London 2012 Olympics. There’ll be no great fanfare, just a low-key opening and usual retail hours. Instead, the bells-and-whistles celebrations – said to include appearances by some of the brand’s ‘Angels’ (more on this later) – are reportedly being planned for the opening of the company’s UK flagship store on New Bond Street, which is rumoured to happen in two weeks time.
Today retail analysts have suggested that the brand’s entrance into the UK will refresh the country’s lingerie market.
Verdict Research, a leading retail analyst, believe that the US lingerie giant is perfectly positioned to supersede any existing British competition – such as La Senza – thanks to its already widespread brand awareness among UK consumers, as well as its innovative and fast cycle of product launches.
The research further suggests that while Victoria’s Secret is a very much a high street brand in the US, the company is clearly aiming for a more aspirational positioning in the UK by opening their flagship store on London’s designer label-laden New Bond Street. It’s a move similar to that of fellow all-American export Abercrombie & Fitch, who, somewhat controversially, placed their first UK store on London’s historic and tailoring-centred Savile Row in 2007 to great success.
Whilst Victoria’s Secret looks set to supplant the likes of mid-market lingerie retailers such as La Senza with ease, Verdict suggest that it is perhaps looking more to compete with higher-priced brands such as Elle Macpherson Intimates – the UK’s best-selling lingerie range – and Calvin Klein.
But what can we really expect from the store, in shopping terms?
Well, Victoria Secret’s reputation precedes it. Already, we know its trademark colour is pink, its bras boosting, and that it calls knickers ‘panties’ (a word which seems a slightly awkward addition to the British dialogue) – and we know all this thanks to the brand’s highly visible marketing strategies, most namely the ‘Angels’, a select group of beyond-beautiful spokeswomen, which currently includes supermodels Miranda Kerr, Alessandra Ambrosio, Lily Aldridge and Candice Swanepoel, and has previously consisted of Gisele Bundchen, Stephanie Seymour and Heidi Klum.
It’s the Angels that allow the brand to straddle both high street and high fashion. They all maintain lucrative high-fashion catwalk, advertising and editorial careers which see them model for the likes of Chanel, Balenciaga and Dior, whilst also hawking VS’s latest pocket money-priced pieces and appearing in the brand’s annual catwalk show – a enormous event in which they take to the catwalk in one off pieces of VS lingerie whilst being serenaded by the likes of Kanye West and Jay-Z.
It’s also the Angels that sell us the dream – a dream in which we look just like them when we slip on one of their boob-boosting bras and bikini briefs. But, while we may not magically transform into Miranda Kerr, we will be able to get our hands on a huge array of boulder-holders, from the ‘Bombshell’ range to the ‘Showstopper’. All variations have one feature in common – they all aim to enhance cleavage, some even offering to give you a boost of two cup sizes. There’s an equally vast selection of ‘panties’ – from ‘Cheekies’, which – you guessed it – show off your other pair of cheeks, to ‘Hiphuggers’, which offer more substantial coverage.
But it’s not just underwear – there’s sleepwear, clothing, swimwear and beauty too. There’s even a limited edition scent, Victoria’s Secret London, which is a mix of violet leaves, mandarin and neroli flower, inspired by the ‘beauty and romance of the city’.
Romance is another aspect the brand aims to encourage, namely by creating an environment in which men can supposedly feel comfortable buying lingerie for their partner – after all, the whole concept of the brand originates from founder, Ray Raymond, experiencing embarrassment whilst trying to buy his wife underwear in a Californian department store back in 1977.
Whether or not Victoria’s Secret will encourage Britain’s shy, easily embarrassed men to buy more ‘panty’-based gifts remains to be seen, but it will at least add a little sparkle to our admittedly ailing lingerie options. At the moment there is little choice on the high street when it comes to buying fancier-than-everyday underwear – bar La Senza, the polyester wonderland – that isn’t in a begrudge-spending-it price range. Plus, we’re a sucker for an Angel.
Billionaire retailer Philip Green wants to turn his fashion empire Arcadia into a global operation within three years, putting a team into China three months ago and considering opportunities in India.
The owner of the Topshop chain has signed a deal with German retail group Karstadt to open his first outlets in Germany.
VF Corp posted a higher quarterly profit on Thursday as the company benefited from easing costs of cotton, helping its jeanswear business.
For the second quarter, the owner of the North Face, 7 For All Mankind and Lee brands earned $155.3 million, or $1.40 a share, compared with $129.4 million, or $1.17 a share last year.
Gross margins rose 20 basis points to 46.1 percent compared with 45.9 percent a year before.
Revenue rose 16 percent to $2.1 billion.
German sportswear maker Puma expects a sharp drop in profit this year, as weak consumer spending in Europe holds back the sales boost its expects from this summer’s high-profile sporting events.
Its profit warning on Wednesday follows those of French food group Danone, German heavy engines maker Deutz, and steelmaker Salzgitter, who all blamed slowing demand in debt-laden Europe.
U.S. firms from personal computer maker Hewlett-Packard to consumer staples company Procter & Gamble and coffee chain Starbucks have also highlighted weakness in Europe, while retailer Metro has said that the debt crisis is even hurting shoppers in Germany, Europe’s strongest economy.
Puma, which makes just under half its sales in Europe, said on Wednesday that earnings would be significantly below last year’s 230.1 million euros ($281 million), hurt by charges as it speeds up cost cuts. First-half net profit fell 13 percent.
The company is more heavily exposed than larger rivals Nike and Adidas to markets in western Europe, where the region’s debt crisis has squeezed consumer spending and boosted unemployment among the young people targeted by sportswear makers.
Like its rivals, Puma has hoped a sports-packed summer including the London Olympic Games – where Puma poster boy Usain Bolt will be defending his 100m and 200m sprint titles – and last month’s Europe 2012 soccer tournament in Poland and Ukraine will boost overall sales.
In an unscheduled statement on Wednesday ahead of second-quarter results due next week, Puma lowered its forecast for 2012 sales. It now expects them to rise by around 5 percent, compared with a previous forecast for an increase of almost 10 percent.
“The Olympics and Euro 2012 will mean big spikes in marketing budgets and the battle was whether the companies could do enough on the top line to offset this,” said an analyst who asked not to be named.
Puma had already put a disappointing first quarter down to the reluctance to spend among cash-strapped European consumers, which make up around 45 percent of its total sales.
A wet summer in parts of northern Europe has added to retailers’ pain, with some stores starting sales earlier and Britain’s Marks & Spencer and JJB Sports partly blaming the rain for keeping shoppers away.
Even sportswear maker market leader Nike has been more cautious of late, saying it was experiencing a slowdown in China, while Adidas said on Wednesday it was closing its only wholly-owned factory in China for cost reasons.
Puma said on Wednesday that net earnings will come in significantly below last year’s 230.1 million euros ($281 million), it said, dented by around 100 million euros of charges.
On average, analysts had been expecting Puma to report net profit of 243.4 million euros for 2012 before Wednesday’s warning, according to Thomson Reuters I/B/E/S.
Shares of Puma, which is 80 percent controlled by French luxury goods group PPR, slipped 5.1 percent to 214.05 euros by 1035 GMT. PPR was up 0.2 percent after earlier falling 1.5 percent.
Shares in Adidas opened 2 percent lower, but narrowed their losses to trade down 0.2 percent.
“It’s definitely a surprise,” said another analyst who declined to be named. “But it can’t be read across 1:1 to Adidas, because they had already performed significantly better in the first quarter.”
Puma said first-half sales were up 8.8 percent in euro terms. It said it would provide more details with its full quarterly report next week.
Puma, founded in 1948 when Rudolf Dassler fell out with brother Adolf and set up a firm to rival Adolf’s Adidas, is trying to reassert its credentials in the sports performance business after focusing too much in fashion on recent years.
Wet Seal Inc. (WTSLA), the women’s apparel chain, fired Chief Executive Officer Susan McGalla amid declining sales.
McGalla’s departure is effective immediately, the Foothill Ranch, California-based company said in a statement. While the board searches for a replacement, Chief Operating Officer Ken Seipel and Chief Financial Officer Steve Benrubi will serve as co-principal executive officers. McGalla joined Wet Seal in January 2011 after 14 years at American Eagle Outfitters Inc. (AEO)
Comparable-store sales in the current quarter are expected to decline as much as 11 percent, the company said. So-called same-store sales are a key benchmark for retailers’ growth because closed and new stores are excluded. The second-quarter loss will be as much as 7 cents a share before one-time costs such as CEO severance costs, trailing a previous forecast of 3 cents to 6 cents.
Wet Seal declined 10 percent to $2.66 at the close in New York for the biggest drop since Nov. 3. Shares have declined 18 percent this year.
“While respectful of the fact that the Board apparently has a different vision for the direction of the company, I am proud of what we have accomplished,” McGalla said in an e- mailed statement from spokeswoman Lisa Cohen. “Over the past eleven months we have been executing on the turn-around plan that we collectively developed.”
The retailer, which operates more than 550 stores in the U.S. and Puerto Rico, increased sales 2.1 percent to $612 million in the 12 months through April 28. Profit declined 61 percent to $6.8 million in the same period.
Department store chain John Lewis has marked four days to go until the start of the Olympic Games by wrapping four of its shops around the country in giant banners.
John Lewis’s flagship shop on Oxford Street has been wrapped in a giant London 2012 inspired Union flag while John Lewis shops in Stratford, Cardiff and Sheffield have been decked out with patriotic banners.
At 8am abseilers fixed the final panel of the wrap around John Lewis Oxford Street while John Lewis Stratford City revealed two large vinyl stickers each side of the shop overlooking the Olympic Park. The vinyls at Stratford continue the theme of John Lewis’s latest print advertising campaign, by creating an image of a gold medal made up of products sold by the retailer.
As the Official Department Store Provider to the London 2012 Olympic and Paralympic Games, John Lewis has also worked with fellow London 2012 partner Adidas to install giant banners and wraps at both its Cardiff and Sheffield shops.
An 80 foot image of Team GB athlete Tom Daley is on display across the front of John Lewis Cardiff while shoppers at John Lewis Sheffield are greeted by a 40 foot image of Team GB athlete and local girl Jessica Ennis.
Nat Wakely, director of selling operations, John Lewis said: “London 2012 is a once in a lifetime sporting event and we are immensely proud to be a sponsor and to be able to demonstrate our support in such a spectacular way. We backed the original London 2012 bid and it has been a fantastic journey to get to this point.
“The campaign to wrap and vinyl four of our shops further cements our commitment to the Games and is our way of getting behind Team GB and Paralympics GB.”
Opening Ceremony, the US fashion retailer and private label collection, has opened its first UK store.
The 3,000 sq ft pop-up shop in King Street in London’s Covent Garden will sell a range of 2012 Olympic-themed ready-to-wear and accessories from designers such as as Proenza Schouler, Delfina Delettrez as well exclusive OC collections from Top Shop and Top Man.
The shop will remain open until October when the brand will move to a larger, permanent unit a few doors away.
The opening of the London store coincides with the 10-year anniversary of Opening Ceremony, which already has stores in New York, Los Angeles and Tokyo.
Harrods has launched its new Toy Kingdom, following a two-year multimillion-pound overhaul and featuring an intergalactic science lab and an “enchanted” forest. The luxury department store said the 26,000-square-foot “destination” was one of its most extensive refurbishment projects and promised six individual “multi-sensory worlds”. A spokesman said the store focused on themes rather than gender, with separate areas including The Big Top based around a circus, The Odyssey room dedicated to science, gadgets and space, and the Reading Room, where children can climb into cubby holes to listen to stories.The Wonderland showcases Harrods’ most exclusive toys, including a £9,000 giant doll’s house and a £6,995 Mercedes SLK that runs on petrol.The department took more than two years to complete and is 2,000 square feet larger than its previous location.David Miller, director of Harrods Home, said: “Harrods is London’s third most visited destination for tourists and we wanted to create a landmark family shopping experience that really was unforgettable for our visitors.”It was important for us not to just build a conventional retail department but to create multi-sensory environments that surprise, entertain and encourage shoppers to interact and play.”
Hammerson Plc (HMSO), the U.K. and France retail property specialist, announced a plan to develop a shopping mall at the Whitgift center in south London, a site that Australia’s Westfield Group (WDC) also plans to build on.
Hammerson is proposing a 1.4 million square-foot (130,000 square-meter) project for the Croydon site that would cost as much as much as 900 million pounds ($1.4 billion), the company said today in a statement.
Britain’s third-largest real-estate company by market value was appointed in April by leasehold owners Royal London Asset Management Ltd. and Irish Bank Resolution Corp.’s IBRC Assurance unit to manage and redevelop the Croydon center. Sydney-based Westfield is planning a development on the same site after signing a deal in November with the Whitgift Foundation, which owns the site’s freehold.
Hammerson’s proposal “is a very significant investment in a part of London that is crying out for regeneration,” Chief Executive Officer David Atkins said on a call to reporters today. Further details on the plan will be announced “in the next few days,” he said.
The company agreed to sell most of its London office portfolio to Brookfield Office Properties Inc. (BPO) in June for 518 million pounds betting that shopping malls will outperform other real estate. It said the value of its properties rose in the first six months of the year on increasing demand for shops and offices in the U.K. and France.
Adjusted net asset value increased to 535 pence from 530 pence through December, the London-based company said in a statement today. Adjusted earnings per share gained 6.3 percent to 10.2 pence.
“We have created a focused retail business by accelerating our plans to sell the London office assets through a single transformational deal,” Atkins said in today’s statement. “We expect to deliver further growth to shareholders by building scale in our chosen retail sectors through extensions, developments and acquisitions.”
Hammerson has gained 29 percent in London trading this year, the second highest in the 11-member FTSE350 REIT Index (F3REITS), behind Great Portland Estates Plc. (GPOR) The stock was little changed at 463.1 pence as of 9:46 a.m., giving the company a market value of 3.3 billion pounds.
Net income fell to 47.2 million pounds from 188.3 million pounds a year earlier after a one-time gain wasn’t repeated. Like-for-like net rental income increased by 2.4 percent in the period as group retail occupancy climbed to 97.5 percent from 97 percent. The interim dividend increased 5.5 percent to 7.7 pence a share.
“Overall, these are a good set of results, with Hammerson beating the market and our estimates,” said Harm Meijer, an analyst at JPMorgan Chase & Co., who rates the stock at overweight, meaning he expects it outperform the average total return of stocks covered by him over the next six to 12 months. “But they also highlight the weakness in the broader market.”
Global luxury goods sales are defying initial concerns over Eurozone turmoil and fears of a cool down in emerging markets, and will exceed €200 billion in 2012.
This is according to global consultancy firm Bain & Company’s just unveiled Spring 2012 Update to its industry bellwether “Luxury Goods Worldwide Market Study.”
Bain further revealed that the Middle East luxury market will grow by 15 per cent in 2012, leading the strong performance of the global luxury market.
Cyrille Fabre, Bain & Company partner who leads the Retail & Consumer Products practice for the Middle East, said: “The Middle East remains a crucial component in the sustained growth of the global luxury market. The region has opened exciting growth possibilities for key industry players and continues to be a major destination for a wide range of luxury brands. Bain’s latest Luxury Goods Worldwide Market Study reaffirms the robust shape of the global luxury market and likewise underlines the huge growth potential of the Middle East region.”
Bain also expects an average of 7 to 9 per cent annual increases in global sales to fuel luxury brands’ growth aspirations until the middle of the decade. The study points to a continuation of the core market trends that created sharp recovery from luxury’s 2008-09 recession: growth of online sales, rapid expansion in China, and shift from wholesale to direct-owned retail remain factors to watch.
As the industry matures around its global retail and e-commerce capabilities, however, the Bain study identifies new factors to watch in the mix of consumers and products that define the industry. Most important, Bain finds that luxury has become a more truly global market. Growth for 2012 of 2 to 4 per cent in Europe, 5 to 7 per cent in the Americas, and as much as 2 per cent in Japan will generate the highest sales in terms of absolute numbers.
At the same time, China’s growth of 18 to 20 per cent now stands alongside resumed growth in India and Russia, where recovery was delayed, and in a host of new markets where the luxury market is solidifying, including Azerbaijan, Brazil, Indonesia, Kazakhstan, Malaysia, Mexico, South Africa, Turkey and Vietnam.
“Brands must develop strategies with much wider reach than ever before,” said Claudia D’Arpizio, a Bain partner in Milan and lead author of the study. “The lessons they learned in earlier emerging markets will help, but they now must manage even broader diversity of consumer preferences, and more variations in their model of how to take products to market.”
As consumers and product trends evolve, the study also finds that hard and soft accessories will consistently outperform even the rapid-growing luxury sector, as much as double the growth rate of other luxury categories. Market growth is tilting to the absolute end of the luxury spectrum, with the true highest-end brands and products outperforming more accessible offerings by 2 to 4 per cent a year. Within these trends, Bain has identified the top nine market-defining factors for luxury in the next three to five years:
– Chinese consumers, including their spending as tourists, now account for over 20 per cent of global luxury sales. Asian consumers (i.e., adding Japan, Korea, and Southeast Asia) account for more than 50 per cent.
– Thirty per cent of global luxury sales now occur within emerging markets.
– The average age of Asian luxury consumers is decreasing steadily, while that in Japan, Europe and the United States increases, creating a new generation of luxury consumers, but with very different tastes and preferences.
– Women are encroaching on traditional male purchases (business attire, luxury watches), as women’s spending becomes increasingly independent.
– en are increasingly likely to seek traditionally female brand dimensions around “fashion” and “beauty” as well as product functionality.
– Luxury product usage has crept in to more casual occasions, which in turn affects the kinds of products that brands develop (e.g. casual-chic apparel lines).
– Luxury is fuelled by newer and bigger money. In turn, consumers’ insatiable chase for higher quality and greater craftsmanship/materials favours absolute luxury offerings.
– Premium and fast-fashion brands are forcing luxury brands to rethink their value proposition by competing directly with lower segment luxury.
– The convergence of stores, e-commerce, social media and mobile commerce is creating an “omnichannel” experience for consumers.
“Fast growth is bringing even faster change to the luxury sector,” concluded Bain’s D’Arpizio. “With more markets to manage and accelerating trends to anticipate, brands that struggle to respond quickly may find the markets’ rapid growth a double-edged sword.”
Sainsbury’s has announced that it’s working with key partners E.ON and Geothermal International to roll out the first phase of an energy solution to up to 100 stores, tapping renewable energy from deep underground to provide energy efficient heating, hot water and cooling.
Both new-build and existing stores have been identified as part of separate projects with E.ON and Geothermal International. These will see both companies installing and operating geo-thermal heat pump technology and follows Sainsbury’s successful world-first use of geo-thermal technology developed by Greenfield Energy at its Crayford store, enabling it to supply 30% of its energy from on-site renewable sources.
The schemes aim to deliver up to 100MW of renewable energy sources in supermarkets by the end of 2016. They are also part of Sainsbury’s 20 by 20 Sustainability Plan renewables commitment which includes reducing its absolute operational carbon emissions by 30% and delivering a fully renewable heat strategy for its supermarkets by 2030.
Neil Sachdev, Sainsbury’s property director, said: “We are continuing to lead the way in environmental firsts. We were the world’s first to use geo-thermal technology in a supermarket to tap natural, renewable energy trapped 600 feet under the ground. We’ve also reduced our absolute electricity usage in supermarkets by over 9% in the past four years despite an increase in space.
“The roll out of this technology with our partners is an important milestone in our renewables commitment. It supports job creation in the renewable energy sector and our goal to reduce our absolute operational carbon emissions by 2020, as well as delivering energy cost savings for our business.”
E.ON, one of the UK’s leading energy companies, is working with thermal energy specialist Greenfield Energy, which developed the technology that was first pioneered at Sainsbury’s Crayford store in south-east London. Its borehole designs also allow large-scale installations while using minimal land area.
Michael Woodhead, managing director of E.ON’s Sustainable Energy business, said: “We’ve often said the most efficient power station is the one we don’t have to build and this technology is an excellent solution to deliver locally produced, renewable energy at a scale that really makes a difference. We’re delighted to have signed up for the first ten stores and we hope very much to extend the number of sites to help meet Sainsbury’s environmental ambitions, working together to make the best use of the natural resources on offer.”
Sainsbury’s other key partner is one of the UK’s leading ground source heat pump businesses, Geothermal International (GI), which is working in partnership with investment firm Octopus Investments, to support the growth of the renewables energy market in the UK.
(MENAFN – Arab News) The Savola Group announced its interim consolidated financial results for the six-month period ended June 30.
According to the Tadawul website, Savola achieved net income of SR 341.3 million for Q2 ended June 30, 2012, an increase of 48 percent compared to the same quarter last year of SR 230.7 million and an increase of 40.9 percent compared to SR 242.3 Million for the first quarter 2012.
Gross profit for Q2 ended June 30 amounted to SR 1.2 billion, an increase of 24.6 percent compared to same quarter last year of SR 963.2 million.
Operating profit for Q2 ended June 30 amounted to SR 603.8 million, an increase of 42.6 percent compared to same quarter last year SR 423.4 million.
Net income for the six months ended June 30 amounted to SR 583.6 million, an increase of 47.4 percent compared to same period last year of SR 395.9 million.
Earnings per share for the six months ended June 30 amounted to SR 1.17 compared to SR 0.79 for the same period last year.
Gross profit for the six months ended June 30 amounted to SR 2.2 billion an increase of 22.2 percent compared to same period last year SR 1.8 billion.
Operating profit for six months ended June 30 amounted to SR 1.04 billion, an increase of 42.4 percent compared to same period last year SR 730.1 million.
The increase in the group’s net income for Q2 and the six-month period ended June 30 as compared to same quarter and period last year is mainly due to turnaround in profitability of its operations in food sector, continued sales growth and increased market share in its retail sector, as a result the group revenues for the six-month ended June 30 reached SR 13.57 billion, an increase of 13.6 percent compared to the same quarter last year of SR 11.95 billion. The increase in net income of Q2 compared to Q1 of this year is due to the reasons mentioned above as well as the seasonal impact experience every year.
Abdulraouf M. Mannaa, managing director of Savola Group, highlighted that the Q2 net income reached SR 341.3 million, which is 10 percent higher than the forecast of SR 310 million.
Savola expects to achieve a net income before capital gain of SR 340 million for Q3 of 2012.
Coach Inc. scored a $44 million judgment against a U.S.-based mother-and-daughter duo operating Web sites advertising and selling counterfeit Coach handbags.
The case, which was filed in Manhattan federal court, stands out from similar Internet counterfeiting suits because the defendants, Linda and Courtney Allen, reside in Syosset, N.Y. Typically, these cases involve foreign-based Web operators who are difficult to track down.
In her decision, presiding Judge Colleen McMahon said Thursday that the defendants had violated Coach’s trademarks on 11 types of goods for a total of 22 separate infringements. In addition to awarding the handbag maker a hefty multimillion-dollar judgment, she granted Coach a permanent injunction, shutting down the defendants’ infringing Web sites, Bellafashions.net and MyClassyFashion.com.
“I know nothing about this,” said a testy Linda Allen, who returned calls for comment regarding the judgment.
When pressed further, she repeatedly said, “it’s not valid,” but finally admitted that while she did indeed know she had been sued by Coach, she had not yet received word of a verdict against her.
A repeat offender, Allen had been sued by French fashion house Chanel Inc. for trademark counterfeiting and infringement in 2007 for the “same exact illegal conduct” with the operation of MyClassyFashion.com and UltimateDesignersHandbags.com, according to Judge McMahon, who noted that in the Coach case, the defendants had also sold counterfeit bags on eBay.
“Linda Allen plainly requires substantial deterrence because she has not been deterred by prior judgments,” explained the judge. “She persists in her contumacious behavior. This award may be crippling, but it is plainly needed to prevent Allen from going back once again into the business of counterfeiting.”
To back up her decision, Judge McMahon said the Allens “willfully” infringed Coach’s trademark because they admitted on their Web sites that the goods they were selling were “not original” and that they were “in no way affiliated with the authentic manufacturers.”
She added that when the defendants finally turned in a response to Coach’s allegations in June, the paperwork was “utterly devoid of substance.”
“Coach is exceedingly pleased with the court’s ruling,” said Nancy Axilrod, Coach’s deputy general counsel. “The decision in Coach v. Linda Allen, et al. should serve as a warning to defendants in all pending Coach lawsuits that courts consider counterfeiting a serious issue and are prepared to order defendants to pay large sums of money. This decision should also serve as notice to all who traffic in counterfeit goods that Coach will vigorously pursue you, and will win.”