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Category: Fashion

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.

  • Korean fashion brands in Zalora pop-up

    Korean fashion brands in Zalora pop-up

    South Korean fashion brands are featuring in an online pop-up store on regional sites of online fashion portal Zalora.

    It’s all part of a concerted bid to expand recognition of Korean fashion bards across the broader Asia-Pacific region.

    Launched in Singapore, the Premium Korean Fashion pop-up shop is open until October in Zalora sites in Singapore, Malaysia, Indonesia, the Philippines, Hong Kong and Taiwan, according to the officials at the Korea Trade-Investment Promotion Agency (Kotra) and the Korea Fashion Association.

    Seventeen South Korean designer brands, which have been recognised for their competitiveness both at home and abroad, are showcasing their products on the pop-up store.

    A launch ceremony was attended by some 80 Southeast Asian fashion journalists and so-called power bloggers. It marks South Korea’s first marketing activity targeting the entire Southeast Asian region.
    At the event, Giulio Xiloyannis said there is growing interest in Korean fashion in Southeast Asia and that the opening of the pop-up store is not only a new attempt but also an important event for Zalora.

    A Kotra official said the trade agency will step up efforts to gain access to major online portals in an effort to make inroads into regional markets.

    “Southeast Asia is emerging as the next eCommerce market after China as youths account for a large portion of its population and regional economies are growing at a fast pace,” Lee Byung-woo, head of Kotra’s office in Kuala Lumpur. “Efforts will be made to help Korean brands gain a foothold there.”

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  • From loss to profit for Parkson Retail Asia

    From loss to profit for Parkson Retail Asia

    Department store Parkson Retail Asia has managed a turnaround with profit before tax (PBT) of S$35 million (US$25.8 million) for the year ended June 30, compared to a pre-tax loss of $40.6 million the previous year.

    Profit was boosted by gain from a partial disposal of equity interest in Parkson Hanoi (PHCL) of $45.6 million. A subsidiary of the group, PHCL is now an associate company.

    On a same-store basis, PBT for the year fell by 46.9 per cent year-on-year to $17.4 million.

    For Malaysia, PBT declined by 28.9 per cent through negative same-store sales of -6.5 per cent and weak local currency; Vietnam had a pre-tax loss of $0.5 million with -2.9 per cent same-store sales; there was a pre-tax loss of $3.2 million in Indonesia; while Myanmar’s results were affected by uncertainty arising from redevelopment plans for the FMI Centre where the store is located.

    For the group’s fourth quarter, same-store sales grew 21.5 per cent in Malaysia, attributed to early festive buying arising from a shift in the Hari Raya calendar as well as the same quarter last year being hit by low sales following the introduction of the Goods & Services Tax.

    New concepts

    New concepts have been initiated, such as introducing Korean apparel, affordable private labels, and specialty shoe stores.

    “We have been consolidating our department store space by identifying non-performing stores with the view to closure upon tenancy expiry,” says Parkson.

    In Myanmar, the group had a 25 per cent decline in same-store sales, affected by plans to close the FMI Centre, while Vietnam had a 4.1 per cent decline for the quarter, with the discretionary retail environment difficult amid an increasingly crowded retail scene.

    Indonesia was more positive with 7.3 per cent growth in same-store sales, mainly because of early festive buying as a result of a shift in the Lebaran calendar.

    Overall, gross sales proceeds (GSP) and revenue for the quarter grew by 9.8 per cent and 10.9 per cent respectively to $232.1 million and $93.9 million. However, GSP and revenue declined by 10.2 and 9.4 per cent respectively to $967.7 million and $388.4 million.

    The group’s pre-tax loss for the quarter was $13.4 million. Contributing factors included impairment on fixed assets for two loss-making stores of $5.4 million, impairment on prepaid rental and rental deposit of $3.3 million, provision on deposit for a managed store in Ho Chi Minh City of $2.2 million, and the initial loss-making periods associated with new stores and businesses.

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  • What lies behind the Gap sales decline

    What lies behind the Gap sales decline

    That the overall pace of the Gap sales decline has moderated since both last quarter and last year is the only – very small – crumb of comfort for Gap Inc in its latest set of results.

    Gap last week reported a profit of US$125 million for the quarter, down from $219 million a year earlier. Total revenue declined 1.2 per cent to $3.85 billion.

    The total sales decline in the US is actually worse than last year with much heavier declines at Banana Republic and flat growth at Old Navy dragging down performance.

    Looking in stores it is not hard to see why this is the case. The Gap brand has no sense of newness and heavy discounting and constant promotion still appear to be the only tools the company has to drive trade. From Conlumino’s data it is clear that in the US Gap is not only losing customers but the customers it has retained are visiting less and spending less – mostly thanks to taking advantage of offers and deals. This is a dangerous position that erodes sales and profit, and suggests Gap has not even begun to remedy its underlying problems.

    Although it is clear the company is serious about creating a step change at its main brand, and while the autumn “#DoYou” campaign and its associated merchandise represent a small step forward, Gap has failed to convince it has done enough to correct the problems in its business.

    While Gap has troubles, Banana Republic is even more problematic. Over the quarter total sales in the US fell by 7.1 per cent, and on a global basis comparable sales for Banana shrunk by 9 per cent off the back of a 4 per cent decline in the prior year. The assortment is at the heart of Banana’s issues and symbolises a brand that has simply lost its way. The spring and summer collection is best described as predominantly bland with a generous sprinkling of oddness thanks to garments with strange cuts and patterning. Customers are confused and, of course, increasingly unwilling to pay the premium that Banana Republic once commanded. As a consequence the brand is falling into exactly the same trap as Gap as it resorts to discounting and deals to shift merchandise.

    Banana Republic is a smaller part of the group, but it is one in which a turnaround will be difficult to engineer. For this reason, it is getting set to completely shutter its UK, and possibly European, operations. As much as this retrenchment is an admission of failure, it is a necessary contraction given the parlous state of the business.

    Old Navy, which once delivered consistently positive numbers, spluttered again this quarter with flat growth in the US. While this brand is in a much better position than its siblings, it has become much less consistent in its marketing and instore merchandising, something which is reflected in its choppier sales numbers.

    Gap Inc is a troubled retailer without much of a plan – a plan that is desperately needed as its net profit decline of 43 per cent in this quarter aptly shows.

  • Estee Lauder’s quarterly sales miss on lower retail traffic

    Cosmetics maker Estee Lauder Cos. reported a smaller-than-expected rise in quarterly sales, hurt by a slowdown in sales in the Americas as fewer customers visited department stores and tourist spending declined.

    Shares of the company were down about 4 percent at $91.34 before the bell on Friday. Up to Thursday’s close, the stock had risen 13.5 percent in the past year.

    Sales in the Americas, its biggest market, rose 1.4 pct to $1.1 billion on a reported basis, its slowest growth in four quarters.

    Lower retail traffic mainly affected the company’s “heritage” brands Estee Lauder and Clinique, and a few M.A.C freestanding stores.

    Demand for its skin care products continued to weaken, as the company cited overall global slowdown in the category. Sales from its namesake brand and Clinique were also hurt by lower sales in some Asia-Pacific countries, mainly Hong Kong.

    “Social and political issues, currency volatility and economic challenges are affecting consumer behavior in certain countries, such as Hong Kong, France and some emerging markets,” the company said.

    Rival L’Oreal SA earlier reported second-quarter sales growth marginally below forecast as the company said Western Europe was being held back due to a “very difficult market in France.”

    Net income attributable to the company fell to $93.5 million, or 25 cents per share, in the quarter, from $153 million, or 40 cents per share, a year earlier.

    Net income was hurt by restructuring and other charges. Excluding items, the company earned 43 cents per share. Net sales rose to $2.65 billion from $2.52 billion. Analysts on average had expected a profit of 40 cents per share and revenue of $2.66 billion.

    New York City-based Estee Lauder said its expects fiscal 2017 adjusted profit to be between $3.38-$3.44 per share, missing analysts’ estimates of $3.53.

    The company also said it expects to incur restructuring charges of about $80 million-$100 million in fiscal 2017, related to its Leading Beauty Forward strategy.

    As part of its Leading Beauty Forward strategy, the company had earlier approved restructuring initiatives to exit businesses in certain markets and channels of distribution while also reducing its workforce globally.

     

  • H&M Beauty sets opening date

    H&M Beauty sets opening date

    The Swedish fast-fashion brand, H&M has set September 10 as launch date for its beauty line in Asia.

    After making its debut late last year, H&M beauty line will come to its Asian customers this September, with Singapore as the first destination.

    The first two Singapore stores to present the line are at Orchard Building and H&M Raffles Place.

    The range covers cosmetics, skincare, body-care and haircare products. The makeup range will include more than 700 products for all makeup styles and occasions. The body-care products are said to be made from premium ingredients with ‘Conscious’ collection using recyclable packaging.

    The beauty line is part of H&M’s philosophy to offer shoppers the latest styles and quality with affordable prices.

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  • Parkson Retail Asia cuts Q4 loss by 80%

    Parkson Retail Asia cuts Q4 loss by 80%

    South-east Asian department store operator Parkson Retail Asia narrowed its fourth quarter net loss by 80 per cent, owing to the absence of costs associated with a store closure a year earlier.

    Parkson, which does not have stores in Singapore, reported a net loss of $12 million for the three months to June 30.

    Revenue was up 10.9 per cent to $93.9 million from a year earlier, it added yesterday.

    The closure of a store at Landmark 72 in Hanoi, Vietnam in January last year had cost the firm $68.4 million. This went under other expenses – which include advertising, selling and administrative expenses, for instance – which improved 70.4 per cent to $27.6 million.

    Owing to this, the firm added in a statement that “as a percentage of revenue, the other expense ratios for the fourth quarter and the full year declined substantially year on year”.

    For the 12 months to June 30, Parkson reversed a net loss of $34.7 million to a net profit of $33 million, while revenue dipped 9.4 per cent to $388.4 million from a year earlier.

    Parkson has department stores in cities across Malaysia, Vietnam, Indonesia and Myanmar.

    Malaysia reported same store sales growth being up 21.5 per cent, thanks to “early festive buying arising from the shift in the Hari Raya calendar”. The growth also came from a low base a year earlier, where consumers bought less after the 6 per cent goods and services tax was introduced on April 1 last year.

    Even though consumer sentiment remains subdued in Malaysia, the firm said it has initiated new concepts such as introducing South Korean apparel, affordable private labels and shoe speciality stores to diversify earnings.

    Parkson added: “We have been consolidating our department store space by identifying non-performing stores with the view to closure upon tenancy expiry.”

    The Myanmar operations’ same store sales growth, however, took a 25 per cent hit in the fourth quarter.

    Parkson added that there are plans to close the store in FMI Centre in Yangon for re-development, and this upcoming closure has affected sales.

    “The landlord has not confirmed the timing for the re-development,” the firm added.

    Overall, it expects the first quarter of the next financial year to remain challenging.

    Quarterly loss per share stood at 1.78 cents, up from a loss of 8.82 cents in the same period last year. Net asset value per share was 24 cents as at June 30, up from 19 cents as at the same date last year.

    Parkson proposed a final dividend of 0.5 cent.

    Its shares closed 0.3 cent lower at 15.6 cents yesterday.

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  • CDFG opened 3000sqm Duty Free in Phnom Penh

    CDFG opened 3000sqm Duty Free in Phnom Penh

    Phnom Penh Duty Free is located inside the integrated entertainment destination of Naga City at Naga City Walk which connects Naga World to ‘Naga 2’. It offers approximately 4,000sq m of retail space with all the main DF&TR and luxury categories available: cosmetics, perfume, jewellery, sunglasses, watches, fashion, beverages, tobacco, travel goods and confectionery as well as “famous local products”.

    The end of September will see the arrival of a slew of further brands: Estée Lauder, Kiehl’s, La Mer, SK-II, Lancôme, MK, Rimowa, and Tumi.

    CDFG Phnom Penh beauty cambodia

    The beauty area in the new store.

    State-owned CDFG, which operates a brand company in Cambodia, comments: “We are the top luxury retail store in Phnom Penh providing a high-end shopping destination to tourists and business travellers. Customers can choose from more than 200 brands from around the world.”

    On opening, branded boutiques will include Longines, Tissot, Swarovski, Samsonite and Prada, with further boutiques from Armani, Coach and Furla to be unveiled at the end of this year.

    SILK ROAD TARGET

    The Phnom Penh development is part of an international expansion policy targeting the so-called ‘Silk Road Economic Belt’ to which CDFG parent, China Travel Group, is committed.

    Cambodia is a key market within the plan: CDFG has already opened its Angkor duty free store in December 2014 (where it competes with DFS), followed a year later by the Shihanoukville duty free store in December 2015. CDFG says it has “the full support at all levels of government in Cambodia”.

    CDFG – which claims to be China’s largest retailer of luxury merchandise – says that with its three stores in place it “will write a new chapter in the tourism industry in Cambodia”.

    To celebrate today’s soft opening, promotions are in place with a 15% discount on all shopping; a chance to experiencing the VIP shopping service; and a gift on purchases over $100. Scanning the company’s official WeChat account, or clicking ‘like’ on the company’s official Facebook, also qualifies for a surprise gift.

  • Laura Ashley to expand to China

    Laura Ashley to expand to China

    After several attempts at cracking the market, Laura Ashley will finally launch in China.

    The British retailer, owned by Malaysia-based MUI Group, will open a website via the Alibaba-owned Tmall website and will have a concession within the first House of Fraser store in China set to open this autumn.

    Laura Ashley finance director Seán Anglim said its long-term aim was to find a Chinese franchise partner.

    “China is not easy as evidenced by how many have got in and how many have come out,” Anglim said.

    “It is all about finding the right partner and doing it at the right time.”

    Laura Ashley currently has franchise partners in 30 countries outside the UK and an online store in six.

    The company also has ambitions to establish new online stores in Hungary and the Czech Republic in coming months.

    The Chinese move comes after the retailer this week reported a £25.8 million profit before tax and exceptional items for the 74 week period to June 30 – a 12.6 per cent increase on the 2015 figure.

     

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  • New post at Luxasia Group for SingPost’s ex-boss

    New post at Luxasia Group for SingPost’s ex-boss

    Beauty retailer The Luxasia Group has appointed former SingPost CEO Dr Wolfgang Baier as group CEO, while founder/owner Patrick Chong has become chairman.

    “Luxasia is now at an important crossroads,” says Chong. “We intend to grow with our international partners and strengthen our core competencies to become the leading Asia consumer-centric omnichannel go-to-market partner of the beauty industry.”

    Patrick-Chong-Wolfgang-Baier

    He says Baier has proven leadership capabilities, vast knowledge and skills in areas such as CRM and omnichannel retail. “His track record in the logistics sector will also help strengthen Luxasia’s partnerships.”

    “Transformation is relevant in every sector and particularly for retail, where the digital and physical space is converging,” says Baier. “This makes developing an omni-channel ecosystem critical. We want to revolutionise how we serve consumers and brand partners in the beauty industry across Asia.”

    Chong says the search for a CEO took more than a year, as it was important Luxasia found the right leader.

    “Not only does Wolfgang understand our operations and share the same aspirations, in some ways he is even more ambitious for Luxasia with regard to developing new areas.”

    Established in 1986, The Luxasia Group has developed retail and distribution networks across Asia for some of the world’s biggest beauty companies. Based in Singapore, the privately held company has 11 offices and more than 2000 full-time employees in Singapore, China, Hong Kong, India, Indonesia, Malaysia, Myanmar, Taiwan, Thailand, the Philippines and Vietnam.

    It manages a portfolio of more than 120 international fragrance, cosmetics, skincare and
    professional salon brands including Beiersdorf, Burberry, Clarins, Estee Lauder, Ferragamo, Hermes, P&G and Shiseido.

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  • Yamada Denki profits from strategy change

    Yamada Denki profits from strategy change

    Japanese electronics retailer Yamada Denki saw its operating profit surged to 2.5 times the year-earlier level in its latest quarter.

    The company says this reflects a strategic pivot to highly profitable white goods from digital electronics, which are susceptible to price drops.

    Logging 6.4 billion yen (US$62.4 million) in operating profit for the April-June period, the company says air conditioners sold briskly, as did ultra-high-resolution 4K televisions ahead of the Olympic Games in Rio de Janeiro.

    However, sales for the quarter fell 2 per cent to 363.7 billion yen. Widespread clearance sales ahead of store closures last year account for part of the comparative drop.

    Yamada Denki’s gross margin widened 0.4 points to 28 per cent following the closure of about 60 unprofitable locations last year. It has also remodelled about 200 stores a year since 2014, allowing more space for home appliances such as refrigerators and washers at the expense of personal computers.

    Coming from a human resources background, the company’s new president appointed in April, Mitsumasa Kuwano, has spearheaded reforms to the company’s staffing strategy, such as putting more workers on the sales floor during busy periods.

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  • Faster roll-out for Mister Minit Asia

    Faster roll-out for Mister Minit Asia

    Australasian services retailer Mister Minit is to expand its retail presence in SE Asia after stellar growth in Malaysia and Singapore.

    The company says it is experiencing an increasing appetite for its personal services among time-poor shoppers.

    For the third consecutive year, the company has experienced strong comparable growth in Singapore and Malaysia with current running rates at 30 to 40 per cent, and is now on the verge of a major expansion program in South East Asia.

    “We are committing significant funding over the next three years initially in Singapore and Malaysia, with interest in also expanding into other Asian markets in the medium term,” said Mark Rusbatch, CEO of Mister Minit.

    Mark Rusbatch - CEO cropped

    There are currently 12 Mister Minit Singapore retail stores and seven in Malaysia.  The company is developing a pipeline of new shop openings for both countries and working with key landlords on identifying prime locations in shopping centres.

    “One of the fastest growing trends right now is ‘do it for me’ and Mister Minit is well placed to make time poor customer’s lives that bit easier – from shoe repairs to other household and personal services including key duplication, engraving and watch servicing,” said Rusbatch.

    Mister Minit Shoes 8157 (Large)

    The company is synonymous with ‘fixing people’s problems’ in Australia and New Zealand, where it is the clear market leader, and has shown year on year comparable sales and total growth for the past 15 years.

    “Our strategy in Australia and New Zealand has been to secure prominent locations in high foot traffic areas that provide ready access to those customers who are time poor and need to utilise our array of services as part of their everyday shopping needs including visiting the supermarket,” said Rusbatch.

    Mister Minit Service2 8406 (Large)

    Mister Minit will adopt a similar strategy in Southeast Asia, where it sees a real opportunity to accelerate its growth rates in the medium and long term.

    “Mister Minit’s heritage in this region has been around high quality shoe services and augmenting these with our full array of services, which include key duplication, personalisation through engraving, and watch servicing including band and battery replacement.”

    “As an international brand we deliver a consistent level of quality and services from our shop fit outs to our high service standards. We recognise the importance of people – from securing the best people to retaining them. We also invest in a significant level of training, upskilling our team in the latest technology and expertise. We know the quality of our people defines our brand.”

    The company’s franchise model is also a strength of the business, and has so far been implemented across five of the Singapore stores with more anticipated to follow.

    Mister Minit Singapore

    “Franchising is our preferred business model as it delivers a strong offer – combining local ownership with an International brand profile,” said Rusbatch.

    Mister Minit will next year celebrate its 60th Anniversary, following its establishment in 1957 in Europe.  In a further sign of the importance of the South East Asia region to the company, it will celebrate the milestone locally.  Mister Minit will host its Annual Franchisees Conference in Singapore in 2017, attended by franchisees and employees from across Australia, New Zealand and South East Asia.

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  • Naughty Cat Vietnam makes Saigon debut

    Naughty Cat Vietnam makes Saigon debut

    Leading Korean accessories chain Naughty Cat has opened its first Vietnam store on Nguyen Hue St in the city centre.

    Naughty Cat Vietnam is located at 47 Nguyen Hue street, D1. The store hopes to cash in on the crowded ‘walking street’ as well as the growing influence of the Hallyu wave in Vietnam.

    To mark the launch, the brand invited Vietnamese models and actresses to the store to demonstrate how fashionable girls will be when wearing these accessories.

    naughty cat

    Customers might be overwhelmed by thousands of items from headbands, hair clips, wigs, gloves and socks to earrings, necklaces, bracelets and even cell phone plugs. Naughty Cat – or N.Cat for short – has collections for men as well.

    After 23 years in the industry, N.Cat knows how to vary its collections to serve different fashion styles, and maintain quality and affordable prices. Globally, it introduces more than 5000 items every month to maintain customer interest and encourage repeat store visits.

    Founded in 1991, N. Cat Accessories had 110 franchised stores in Korea, Europe, America and Asia at the end of 2015.

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  • Chopard Singapore fails to notice missing millions

    Chopard Singapore fails to notice missing millions

    Geneva-based luxury goods company Chopard Singapore failed to notice it was missing S$11.2 million until a government investigator started looking into the embezzlement after a tip-off.

    Now the former accounting manager of the luxury goods company, known for its watches and jewellery, has been sentenced to 15 years’ jail for siphoning the money from her employer over nearly seven years.

    Chew Siew Lang, 53, misappropriated most of the money using erasable ink to write on cheques made out to Chopard suppliers for bogus transactions. After gaining the required two signatures on the cheques – Chew herself was an authorised signatory – she replaced the payee’s names with her own.

    The offences took place between January 2006 and August 2012, and Chew spent at least $2.1 million on lottery bets – she wrote 76 cheques of between $20,000 and $68,000 to a Singapore Pools retailer.

    In December, she pleaded guilty in the High Court to 56 charges – six counts of criminal breach of trust, 30 counts of falsification of accounts and 20 counts of using the benefits of her criminal conduct. A further 187 similar charges were taken into consideration.

    The prosecution had sought 18 to 20 years’ jail, but the defence argued that Chew has an impulse control disorder that turns her into a pathological gambler. The case was adjourned after Justice Woo Bih Li asked if there was a causal link between her mental disorder and her offences.

    In her latest appearance, Chew’s lawyer, Daniel Chia, told the court his client was not pursuing the point about her disorder after the prosecution submitted two psychiatric reports. He sought a jail term of 12 years.

    In sentencing, Justice Woo noted it was good Chew has the support of her family. “However, I also have to take into account that you misappropriate a very huge sum for which only a small portion has been recovered.”

    Chopard found out about the embezzlement only after the Commercial Affairs Department started investigating Chew. The company sacked her in August 2012, and two months later filed a civil suit against her. It has managed to recover only $197,000.

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  • Pacsafe opens first global flagship store in the Philippines

    Pacsafe opens first global flagship store in the Philippines

    Keeping in mind the growing demand for safer travel, globally recognized travel gear brand Pacsafe has opened its first flagship store in the Philippines. The boutique, the company’s first in the world, is located at G/F Glorietta 5, Makati City. It was officially launched through United Limsun International Trading Corp., the brand’s exclusive distributor in the country. At least 10 more retail locations are expected to open in three years.

    The new boutique will carry the company’s full range of products (adventure backpacks, urban and leisure bags, women’s bags, photography bags, luggage and travel accessories such as straps, cables and locks).

    Pacsafe has extended its company’s global marine turtle conservation advocacy by providing a kick-off fund donation of P235,000 to the Bantay Pawikan Conservation Center in Morong, Bataan, through the Bataan Tourism Council. Present to accept the donations were Vicky Garcia and Isabel Garcia, chairs of the Bataan Tourism Council.

    Built on the aspirations of Australian founders Rob Schlipper, CEO, and Magnus McGlashan, president and cofounder, Pacsafe has become synonymous with smart and safe travel. As the pioneer of the travel security category since 1998, Pacsafe is known all over the globe as the world’s most secure antitheft travel gear. It has steadily gained solid industry leadership throughout the years, thanks to trademark innovations like the eXomesh, RFIDsafe and other technologies.

     

  • Ralph Lauren sales tumble

    After a slight uptick in performance at the close of last year, Ralph Lauren sales have tumbled.

    Compared to 2015 – when total revenues declined by 5 per cent, wholesale by 9 per cent, and retail by 3 per cent – the latest sales figures are decidedly weak.

    In the first quarter of the new fiscal year, net revenues fell for a fifth straight quarter, dropping 4 per cent to US$1.6 billion

    The wholesale numbers are wholly understandable and are thanks, in large part, to the car-crash that is the American department store channel. While Ralph Lauren has representation in stores like Macy’s the fact that its sales areas look like a flea-market do nothing to help the brand or its revenues. This is further exacerbated by the generally weak customer traffic at department stores across the past few months.

    The retail numbers are much more of a disappointment, and a concern given that this division delivers the largest chunk of revenue. Ralph Lauren has been keen to emphasise its Way Forward Plan, which it says is changing the operational structure of the business so that it can deliver growth. As much as many of the actions are prudent, it feels like the company has been turning itself around in perpetuity. At some point, these actions need to deliver growth – something they are currently failing to do at either the sales level, or on the bottom line where the company posted a $31 million operating loss for the quarter.

    Decisive action is needed to put the brand on the right track. This includes withdrawing from department stores like Macy’s which are now actively damaging the Ralph Lauren brand, and focusing only on more upscale department stores like Nordstrom and Neiman Marcus as sales channels.

    A proper brand review is also needed as Ralph Lauren has become muddled and confused and is simply not competing effectively against brands like Vineyard Vines, which have good traction with younger, high spending consumers. Some action has already been taken to simplify the brand structure but much more clarity is needed in communicating the various parts of the offer to consumers. At present the various parts of Ralph Lauren are too hit and miss.

    Reconnecting with younger consumers is also a priority. Rather like Tiffany, Ralph Lauren is seen as an older, established brand that, while not actively disliked, is less relevant than it was a generation ago. Spin-offs like Club Monaco and RRL have helped to remedy this, but the company needs to put more energy and effort around extending and expanding their reach.

    That said, current plans should deliver some cost savings over the course of this fiscal as operations are streamlined. However, expect the plan’s impact on revenue to be negative across at least the next quarter.

    • Håkon Helgesen is a retail analyst at Conlumino.
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