Retail News Asia is committed to providing both local and global retailers with the latest Fashion news throughout the Asian market. This on a daily base.
Philips and L’Oréal Paris Men Expert have joined forces to launch a pop-up barber shop at Singapore Changi Airport.
The Male Grooming Club initiative, in partnership with Changi Airport Group, The Shilla Duty Free and Sprint-Cass, is said to be the first-of-its-kind in an airport. The barber shop, open from 13 December to 24 January, offers male passengers in Terminal 3 a range of grooming services, products and promotions.
Professional barbers use Philips’ range of premium shavers for a complimentary hot towel shave alongside head and face massages, finishing with the L’Oréal Paris Men Expert range to pamper skin. Individual consultations with a grooming adviser are also available to select the best shaver and skincare products suited to customers’ needs.
The Male Grooming Club showcases Philips’ most advanced shavers featuring proprietary ContourDetect technology designed to maximise comfort and minimise cuts and irritation. Other male grooming tools available at the pop-up store include Philips hair clippers, beard trimmers and body groomers.
Men in focus
While more than 50% of travellers are male, they represent less than 10% of the total spend in airport cosmetic stores. Changi Airport said there is a huge opportunity in the travel retail space to target men specifically when it comes to their grooming needs.
Primed and ready to fly.
The pop-up offers exclusive promotions such as S$50 (US$35) off selected Philips Shavers with any purchase of a L’Oréal Paris Men Expert gift set. Complimentary gifting services are also available along with a limited-edition gift bag with any purchase of a Philips male grooming tool or L’Oréal Paris Men Expert travel retail exclusive sets.
Philips and L’Oréal Paris Men Expert product ranges are available at Sprint-Cass and The Shilla Duty Free. Complimentary male grooming services are available from 6am to 10am and 7pm to 11pm daily; while the Male Grooming Club will operate from 6am to 1am daily.
Diamonds may be a girl’s best friend, and that’s especially true of female millennials in China.
According to diamond-producing giant De Beers SA, 68 percent of diamond jewellery sales in China ($6.78 billion in 2015) are driven by millennial women, many of whom are college-educated, not married and quickly cultivating a collection of the gems.
Bloomberg spoke with one 27-year-old Chinese woman who, like many of her peers, has a 15-plus-piece diamond collection including a 2.5-carat solitaire given to her by her parents.
The fact that she’s not married is part of the trend to — as she said — not wait passively for a diamond gift from a man. For Chinese millennial women, independence is the top trait they aspire to: More than 40 percent of them say financial independence is more important than marriage, with 32 percent saying that independence is what personal success looks like to them.
That’s according to research by J. Walter Thompson surveying 4,300 women across nine countries in 2015. Some jewellery companies have made a conscious decision to not even show any couples at all in their advertisements.
A sparkling opportunity
In the top four diamond markets in the world, there are more than 220 million millennial women who spent $26 billion on diamond jewellery last year. Behind China is India but after a significant drop, followed by the U.S and then Japan. Within this four-country demographic, more diamonds have been acquired than any other generation, and yet the demographic hasn’t even come into their most affluent years.
Compared to their Chinese mothers who historically bought jade and gold, these millennial women are struck by the western lifestyle that includes the glamour of Harry Winston and Tiffany gems. Having those diamonds is a status signal of wealth and accomplishment, rather than love. As a result, more jewellery companies have popped up in China trying to get their share of the desire. Boston-based Hearts on Fire was usurped in 2014 by Hong Kong’s Chow Tai Fook, grabbing nearly 6 percent market share.
But it’s not just about status, as the gems are seen as assets that will not depreciate in the way that other high-end items like bags and shoes can due to wear and seasonality.
Gold x diamonds
Chow Tai Fook has noticed this by rolling out lines of jewellery that mix gold with diamonds to make sure their female millennials — half the business — stay engaged, and it has also pulled in celebrities like hunky actor Li Min-ho and rapper G-Dragon — both millennials — to appeal to these women.
But even with diamond jewellery being a sign of independence, the divorce rate in China is more than triple what it was back in 2002 — currently 2.8 per 1,000 people, back just 14 years ago it was 0.9 per that same thousand. More than 3.84 couples went their separate ways in 2015, which is 5.6 percent more than 2014.
But those diamonds are still forever, even if marriage isn’t or has never even happened yet. And diamond companies know this. De Beers research cites the American trend of couples spending more on their second marriage than on their first. Experts say those Chinese millennials may follow suit as well.
Swiss luxury watchmaker Breitling is expanding its reach in Asia, opening two new stores in Macau.
Located in luxury malls Shoppes at Venetian and Shoppes at Parisian in Macau, the new boutiques sell a full selection of timepiece models from the entire Breitling and ‘Breitling for Bentley ‘ collections. The chronographs come equipped with ‘Manufacture Breitling movements, as well as special limited ‘Boutique Editions’.
Each Macau boutique has been designed with old and new world characteristics, typical of Breitling. The décor also highlights the brand’s aeronautical heritage, enabling “visitors to plunge directly into the Breitling universe, a unique experience that excites the senses,” said Breitling in a statement.
Both stores boast a VIP lounge, offering customers a one-on-one, personalised shopping experience.
Breitling was founded in 1884. Since then, it has played a crucial role in the development of the wrist chronograph. Breitling is also one of the rare companies to produce its own mechanical chronograph movements, entirely developed and manufactured in its own workshops. This family business is also one of the last remaining independent Swiss watch brands.
Shoppes at Parisian Macau, which only opened in September this year, hosts 170 luxury and lifestyle brands in its 320,000 square feet retail space. The new Breitling Macau Parisian store is located at Place Vendome on Level 3.
Shoppes at Venetian is located inside the Sands Shoppes, the largest mall in Macau offers with more than 850 duty free outlets. The new Breitling store is in the Great Hall, on Level 3.
Domestic textile enterprises and logistics service providers should work together to reduce costs and improve their competitiveness, according to experts.
Nguyễn Tường, Vice Chairman of the Việt Nam Logistics Association, said the textile industry needs to import raw materials from abroad and export products to foreign markets.
Working together, many enterprises could purchase raw materials by combining their orders to create a large shipment, which will help significantly reduce transportation costs, he said.
The costs of logistics currently account for nearly one-third of the costs of each textile product exported, so the Vietnamese garment sector could save more than US$1 billion per year by reducing this cost.
Additionally, Trương Văn Cầm, Vice Chairman of the Việt Nam Textile and Apparel Association, said most textile companies currently perform outsourcing jobs, causing them to depend on the supply of raw materials and transportation services of providers assigned by their partners.
Most of these providers are foreign companies, thus the market share for local logistics companies has been narrowed, Cầm said.
Further, high transportation costs are undermining the competitiveness of Vietnamese goods in international markets, he added.
Director of the Nam Việt Co Ltd, Nguyễn Đức Chương, said that during peak seasons, textile firms have to pay the container imbalance charge (CIC) – a kind of sea freight charge which a carrier requires to offset costs arising from the transfer of a large amount of empty containers from one place to another.
This charge is only affordable to enterprises with large-scale import-export orders, such as Nhà Bè Corporation or Việt Tiến Garment Joint Stock Corporation, but is a heavy burden on small and medium-sized textile firms.
Meanwhile, there is a lack of confidence between the owners of goods and Vietnamese logistics service providers due to low-quality and high prices, said representative of the Đam San joint stock company, which specialises in producing fibers.
Located in the northern province of Thái Bình, the firm has to spend $3 billion to $4 billion every year on logistics costs.
Self-services
To improve the quality of the supply chain and reduce logistics costs, many textile enterprises have turned towards “self-service”.
A representative of the Nhà Bè Corporation said the corporation has established the NBC logistics company to carry and load goods, and to export and import procedures for its shipments.
To facilitate the transaction, NBC logistics firms also opened a representative office in China’s Shanghai, and many textile enterprises are seeking to hire it to perform export and import services.
So far, conducting self-logistics services for approximately 70 per cent of their goods has helped the corporation save $2 billion per year. Previously, it had to pay $6 billion for import-export of goods annually.
However, self-service is still not a solution for small and medium-sized firms.
Therefore, business leaders in the two sectors agreed that it was necessary for the Ministry of Industry and Trade and the Ministry of Transport to assist the coordination and connection between shippers and the owners of goods.
The Made In China label has become synonymous with cheap fabrics and fast fashion — but that’s changing just as quickly as the industry grew.
As the country’s economy shifts from one of manufacturing to consumption, the quick and dirty goods so beloved by the West are likely to be made in other countries with lower labour costs.
Meanwhile, China’s booming middle class is demanding quality and sophistication, and that could mean a $140 billion payday for the Australian economy, experts predict.
Rich Chinese are now the target customer for any Aussie business, and the transaction works both ways. The nation’s newly powerful creators could soon be exporting their ideas straight into your home and wardrobe.
Chinese shoppers spend billions in Australia each year.
LABEL FREAKS TO FASHION GEEKS
As their economy has exploded, the Chinese have gained a reputation for being obsessed with designer labels. If it’s Prada, Gucci or Dior, it’s a status symbol they want in their wardrobe.
But the still fledging market is catching on to what’s seen as truly sophisticated worldwide.
Now the demand is for innovation, style and originality, and China is starting to make its name in the fashion business for more than just factories. The industry has tripled in size and is valued at $85 billion.
Vogue China was only established in 2005, and at the time there were no Chinese supermodels. Now the magazine has a monthly print circulation of 1.8 million to American Vogue’s 1.2 million, and 30 million unique users online.
Its editor Angelica Cheung says the Chinese consumer is increasingly willing to take risks, whether on an original look or a less well-known designer.
If Aussie businesses are agile enough, that could mean important opportunities. China’s middle class have higher disposable incomes than ever, but demand for products is not yet being met.
Alice McCall became the first Australian designer to open their own boutique in China last year, and our wool industry is looking at how it can offer more than raw material to the rapidly developing country.
But if we are too slow, China’s homegrown designers will outstrip the competition domestically and export its own ideas to the world.
Chinese designers like Madame Zhou are exploring new territory, and their ideas are coming to your wardrobe.Source:Supplied
AUSTRALIA’S $140 BILLION BONUS
The growth of China’s gross domestic product (GDP) is at six per cent compared to 10 per cent ten years ago, with manufacturing only nominally up while services have dramatically increased.
This has coincided with both rapid urbanisation and industrialisation and a new demand for goods and services from overseas, particularly Australia, according to Helen Sawczak, national CEO with the Australia China Business Council.
“This demand has been fuelled by a growing and relatively affluent middle class in China, which conservative estimates have put at 109 million adults,” Ms Sawczak said. “The new middle class in China continues to demand clean, green and safe premium products which includes Australian agribusiness products especially fresh produce, wine, vitamins, health supplements, infant formula. They also want high quality education, property investment opportunities and unique tourism experiences.”
Chinese tourists have the potential to make Australians far richer, with 1.4 million visiting in 2016 and spending billions of dollars.
“Some projections have suggested that by 2025, Australia will receive two million tourists per annum which could impact the Australian economy by $140 billion,” says Ms Sawczak, who recently produced a report entitled The Long Boom: What China’s Rebalancing means for Australia’s Future.
“Chinese tourists tend to be avid shoppers when visiting Australia and our report indicates that visitors are more likely to continue buying Australian products after their trip.”
The Mercedes-Benz China Fashion Week made the world sit up and take notice. Picture: Lintao Zhang/Getty ImagesSource:Getty Images
POWER COUPLE
The China Australia Free Trade Agreement has now been in place for a year, substantially removing tariffs on a wide range of products and has helped to facilitate more bilateral trade.
Australian manufacturers are hoping to bypass the multi-million dollar daigou trade, which came to public attention in Australia at the peak of last year’s baby formula shortage scandal.
Tens of thousands of international grey market traders, now better known by the Chinese term daigou, ship groceries and skincare products to friends and relatives in China — selling goods at a premium of up to 50 per cent and making as much as $100,000 a year.
Competition to capture China’s lucrative market is fierce. The Chinese may see Australia as a destination for food and wine, but it is not as synonymous with premium fashion.
But there is an opening. Li Zhang, project director of the Australian Lifestyle Expo, said earlier this year: “Australian brands are seen as healthy, green, organic, natural, environmentally friendly and high quality, therefore their willingness to pay is pretty high.”
The large market could be vital for Australian businesses looking to grow, with Shanghai alone matching our population of 24 million.
China is no longer the world’s factory, and we need to take notice.
British department store chain House of Fraser has opened its first standalone store in China, in Sanpower Plaza in Nanjing, the capital of Jiangsu province.
Owned by Chinese conglomerate Sanpower Group, the House of Fraser China store spans six floors with more than 425,000 sqft (39,483 sqm) of retail space. It is introducing such brands as Cambridge Satchel Company, Peter Werth and Radley into the Chinese market.
House of Fraser chairman Frank Slevin says the chain will look to benefit from the strong demand by Chinese consumers for UK brands.
In September, the company described trading in the UK as “very challenging”. It said the retail sector there was facing significant change in “structural dynamics as consumers’ shopping habits and delivery expectations continue to evolve”.
“The opening of the store in Nanjing is a strong way to finish the year,” says Slevin.
A rebound in basketball drove strong Nike sales and profit growth in the last quarter.
The US-headquartered sports giant has reported a profit rise of 7.3 per cent to US$842 million in the three months to November 30, with sales up 6.4 per cent, to $8.18 billion. Excluding the impact of currency rates, profit rose 8 per cent.
Sales in the basketball category, which includes its Jordan brand, accounted for 15 per cent of wholesale revenue in 2016. And even greater growth is expected in the next quarter after the brand lost momentum in the core category in previous periods.
“We’re seeing incredible momentum in basketball,” said Trevor Edwards, president of Nike Brand. “To be clear, basketball is back.”
Sales in China rose 12 per cent, and in the US by 3 per cent.
Nike has moved to drive more direct sales, improved its online sales apps and adjusted pricing on some of its marquee products, including basketball shoes.
Fashion brand Cos Malaysia has opened its first store, at the new Pavilion Elite Mall in Kuala Lumpur.
The brand, which is part of the Swedish H&M stable, is offering menswear and womenswear from its latest autumn/winter collection. This explores hybrid garments combining wardrobe classics with the eccentric and eclectic, featuring warm colours, organic tones and draped proportions, says Malaysian beauty and wellness website Pamper.my.
The store’s interior reflects the Cos design aesthetic of clean lines and natural elements, and features a lounge area.
Cos MD Marie Honda describes the inaugural Malaysian store as “an exciting stage in our expansion in Asia”.
Italian fashion label Salvatore Ferragamo has taken over four JVs created in partnership with Trinity (Fung Group), which distributes the brand in South Korea and Southeast Asia.
Ferragamo says it has bought the companies’ 20 per cent share, still owned by Trinity through Trinity Luxury Brands Holdings and Ferrinch. The value of the transaction has not been disclosed.
Impacting Ferragamo Korea, Ferragamo (Malaysia), Ferragamo (Singapore) and Ferragamo (Thailand), the takeover follows an agreement signed in 2012. This included a purchasing option allowing for Salvatore Ferragamo to take full control of the JV companies.
At the time, Ferragamo had already increased its stake in the four companies to 80 per cent.
In the past few years, the Asia-Pacific region has become Salvatore Ferragamo’s main market, accounting for 35.5 per cent of its global revenue. At the end of September, the label’s sales in the region amounted to €360 million (US$375 million), equivalent to a 0.3 per cent decrease compared to the first nine months of the previous fiscal year.
Hong Kong luxury brand Luk Fook Jewellery has arrived in Malaysia, opening two stores – at Pavilion Elite and Suria KLCC.
The group hosted a grand ribbon-cutting ceremony at its Pavilion Elite outlet, attended by actress Kristal Tin, Pavilion Kuala Lumpur retail CEO Joyce Yap, Hong Kong-Malaysia Business Association VP Henry Yip Choong Hung and Luk Fook Group executive director/deputy-GM Shirley Wong.
Hosting the event was Luk Fook Group chairman/CEO Wong Wai Sheung.
Luk Fook Jewellery first entered the Southeast Asian market in 2010 with a retail shop in Singapore. The two new outlets join its 1470 stores in the nine countries, including Australia, China, Korea, Macau and the US.
Luxury travel retailer DFS Group has been awarded the master duty-free and general merchandise concession at Singapore Cruise Centre (SCC).
Winning the public tender process announced in June, DFS has a five-year contract covering SCC’s HarbourFront and Tanah Merah ferry terminals, with a two-year extension option.
It is the first time SCC has awarded a master duty-free concession, consolidating several contracts including liquor and tobacco, perfumes and cosmetics, fashion, travel accessories and confectionery into a single contract.
DFS will start trading on April 1, being allocated commercial space spanning 6000 sqft (557 sqm) across seven outlets at the terminals. The deal involves a reconfiguration of the main retail space at the arrival and departure areas of both terminals.
Singapore Cruise Centre CEO Christina Siaw says the tender process attracted participation from the world’s leading international duty-free concession companies. “We were highly impressed with the passion, innovation and attention to detail demonstrated by participants in the tender proposal and interview stages.”
She says passengers at the SCC terminals will soon have access to more retail space with a new store concept as well as new brands, marketing activities and services.
DFS will offer products from more than 150 brands and introduce food and whisky-tasting stations as well as eCommerce, collection and home-delivery platforms.
Outlets will undergo a phased renovation, introducing a revamped design inspired by the traditional seafront buildings nestled along Singapore’s coastline.
More than 6.3 million ferry passengers and 560,000 cruise passengers pass through SCC’s terminals annually. DFS has had a presence at SCC for two decades.
Quirky US skincare brand Burt’s Bees is set to open stores across Asia after testing new concept formats in Hong Kong.
The first stores are now trading at Queensway Plaza and Ocean Terminal.
Despite its relative youth, Burt’s Bees is something of an institution in the US. Formed in 1984 in Maine by Roxanne Quimby and Burt Shavitz, Burt’s Bees started out making candles using excess wax from the latter’s honey business, before expanding into soaps and other personal care products using recipes discovered in 19th-century beekeeping books.
By 2007 they’d given up the candles and were producing some 197 lines including lip gloss, shampoos, baby care lines and outdoor remedies, which were sold in 30,000 retail outlets in the US, UK, Hong Kong, Australia, Canada, Ireland and Taiwan among other countries. Late that year, industrial group Clorox reportedly paid US$925 million for the business.
Burt died in 2014 aged 80, but his image lives on, forming a strong backdrop in the Hong Kong stores, which were designed by Sydney-headquartered design house Landini Associates.
Landini has effectively reinvented the brand, repositioning it as a premium product, and paying tribute to the brand’s focus on sustainability and its philosophy “that everything should be for the Greater Good – good for you; good for us, good for all”.
Two concepts have been created – a standalone store model and a store-in-store created for department stores.
In tandem with the interiors, Landini has redesigned the graphics and communication: signage, ticketing and information graphics often embossed with a playful, iconic bee.
“This is a big step for Burt’s Bees into the highly competitive Asian skincare market, explained a Landini spokesperson. “It will now roll out throughout Asia, South America and Europe.”
Landini is also working on new packaging, designs of which will be released shortly.
Luxury brand group LVMH is thinking about taking its eyewear business in-house.
This could be a further blow for Italian eyewear group Safilo, which lost the Armani licence in 2013 and those for the Kering Group labels (Alexander McQueen, Bottega Veneta, Gucci and Saint Laurent) at the end of 2014, reports CPP-Luxury.com.
Italian investment bank Mediobanca has published a report about Safilo, owned by Dutch investment fund Hal, focussing on its announcement that its licence agreement with Celine has been terminated while its contract with Christian Dior has been extended until 2020. The licence for Celine’s eyeglass collections – the LVMH label joined Safilo’s portfolio in 2012 – ends on December 31.
While the licence agreement for the design, production and distribution of eyeglasses and sunglasses for Dior and Dior Homme, also part of LVMH’s galaxy, has been extended until the end of 2020, Mediobanca says the extension is for three years only, not for seven years as was the case for the previous contract, renewed in September 2010.
The bank’s analysts noted that the standard renewable licence contract is for five years.
“We believe markets are much more volatile than in the past, and renegotiating contracts on a more frequent basis may be to the advantage of both parties,” says the bank. “But we think this could also signal a change in LVMH’s approach as the group has the financial strength to internalise its eyewear business, as Kering did a few years ago.”
LVMH has been managing the eyewear collections for its leading brand, Louis Vuitton, internally for several years.
Mediobanca estimates the sales for Celine and Dior eyeglasses collections are worth respectively €40 million (US$41 million) and €200 million. As well as these, there are the sales for the eyewear lines of Fendi, Givenchy and Marc Jacobs, all licensed to Safilo. Altogether, LVMH brands are worth €350 million in annual revenue for the eyewear group, equivalent to nearly 30 per cent of its total revenue, which Mediobanca pegs at €1.2 billion.
The bank report also highlighted the Safilo portfolio’s “marked reliance on one single client”, plus the weakness of its own brands.
Warmer than expected Christmas weather appears to be providing little comfort for Hong Kong’s retail sector this year. Business has been cold at many outlets despite a projected rebound in mainland visitor arrivals.
Otherwise, what can explain a gold shop branching out into sunglass sales and news that the city’s biggest karaoke operator is scaling down its operation?
Let’s talk about the gold retail chain first.
I’m referring to Luk Fook Jewellery, which has just opened its first eyewear store — “Vision Gallery”.
The new venture comes after the company announced last month a 31.5 percent slide in same-store sales for the six months ended September compared to the same period a year ago.
The eyewear store has been put up in a prime location, next to an H&M outlet, on Dundas Street in Mongkok.
Luk Fook is said to have signed a two-year lease for the 600-square-foot retail space, offering a monthly rental of HK$128,000.
Though the rent is just half what the previous tenant, bankrupt home appliance chain DSC, was paying earlier, there is still this question: why an eyewear shop, instead of another gold store?
Well, the answer lies in economics.
Chairman Wong Wai-sheung told Ming Pao that a 1,000-square-foot gold shop, in terms of costs, would be equivalent to opening 10 eyewear stores.
Guess what? Luk Fook, which currently has 47 gold shops in Hong Kong, has earmarked HK$20 million to open 10 eyewear stores next year, with a focus on the middle class.
Last year, the company had 50 gold shops in the city.
To boost Christmas sales at the new eyewear outlet, Luk Fook is giving away a pair of pearl earrings to the customers.
We are not sure if this is a nice cross-selling idea but would reckon this is a defensive move.
Luk Fook as well as its competitors such as Chow Tai Fook and Tse Sui Luen have seen their same-store sales fall steeply this year, with 20-30 percent slide in many cases.
In comparison, an eyewear retailer such as Stelux Holdings has seen its sales dip just 5 percent.
During its interim results, Luk Fook said it will strive to broaden its income sources, enhance the operational efficiency and reduce costs in order to minimize the impact of the business downturn.
The foray into eyewear retail is part of that strategy.
Elsewhere in the city, Karaoke operator Neway has also come up with a new way to survive.
Rather than open a new venture, Neway is leasing the 4,000 square-feet lobby and first floor at its Causeway Bay flagship store CEO Neway, according to Apple Daily.
By sub-leasing 30 percent of the original floor area, Neway is trying to shore up revenues which have been hit by a decline in night-time singing parties at its karaoke outlets.
The plan will also help the company save some HK$1.8 million in monthly rental.
The sub-leasing of Causeway Bay shop space comes after the group shut down an 18,000-square-foot Mongkok facility last year.
As much as we miss the grand lobby of CEO Neway and the good old days of group singing, we cannot help but admit that Karaoke outlets are now a bit out of fashion after they dominated the social scene for about twenty years.
This year, one of the best-selling items at the Golden Computer Arcade in Sham Shui Po is a microphone with karaoke function that sells at no more than HK$500.
The made-in-China product, which connects through bluetooth with iPad and the home stereo system, has become an immediate hit and is now a must-have during family gatherings.
If you can get the same kick at home, why bother spending money on a karaoke shop? This seems to be the view of a growing number of people.
Given this reality, Neway may need to find something else to sell other than songs.
Suripong Tantiyanon (left), Visa Country Manager, Thailand and Noppadon Pakprot (right), Deputy Governor for Tourism Product and Business, Tourism Authority of Thailand(TAT), launch Thailand Spectacular Year End 2016, aiming to boost inbound tourist spending during the festive seasons.
The joint promotional campaign rewards non-Thai Visa cardholders with special privileges and complimentary gifts when they spend at 14 shopping complexes throughout Bangkok, from now until January 31, 2017. TAT forecast that more than 375,000 tourists will visit Thailand during the four-day New Year period, generating more than THB 5.5 billion of revenue for the country, a 12-percent increase from the same period last year.
