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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.

  • Hermes retail sales rose 8pc in Q1

    Hermes retail sales rose 8pc in Q1

    French leather goods maker Hermès Group’s revenue was up 6 percent in the first quarter of 2016, despite a challenging luxury landscape.

    Consolidated revenues for the house were 1.19 billion euro, or about $1.35 billion at current exchange rates. Even with the negative effects of the Paris terrorist attacks, Hermès’ European sales grew 9 percent compared to the same period the previous year, with strong performances of its brand-owned boutiques.

    Trying times
    Japan sales were up 13 percent compared to last year, which Hermès attributes to selective distribution. The rest of Asia saw sales rise 4 percent, with growth in China offset by challenges in Hong Kong and Macao.

    Hermès’ leather goods and saddlery business grew 15 percent in the quarter. The group has recently established new facilities for leather production, with the fifteenth opened on April 1 in Héricourt.

    All other areas of Hermès’ business saw a decline.

    With a slowdown in the United States, Asia and France, ready-to-wear and accessories sales were down 2 percent. Silk and textile sales were down 9 percent, attributed to the recent events in Europe.

    Perfume sales dipped 4 percent, while watches declined 3 percent.

    Its other business ventures, including silvermaker Puiforcat and bespoke shoemaker John Lobb, balked the trend, rising about 30 percent to about $65.6 million in sales.

    Hermes shoe fw 2014
    Hermès fall/winter 2014

    Hermès says that its goal of 8 percent revenue growth at constant exchange rates for 2016 may be out of reach due to economic, geopolitical and currency fluctuations.

    The brand is planning to celebrate the horse this year, with an effort that focuses on its longstanding connection to nature through equestrian arts.

    Other luxury brands are feeling the pinch of current events.

    French conglomerate Kering’s luxury sales in the first quarter of 2016 were buoyed by Western Europe, Japan and emerging markets, as it managed growth in a challenging environment.

    Bottega Veneta’s sales were down 7.6 percent as reported, or 8.3 percent on a comparable basis. The brand was mostly hurt by the strength of the U.S. dollar and by Asian tourists avoiding Europe and other parts of the globe following terror attacks

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  • H&M India opens Swedish brand’s 4000th store

    H&M India opens Swedish brand’s 4000th store

    Bollywood actress Parineeti Chopra hosted the grand opening of Swedish fashion brand H&M India’s newest – at the Mall of India in Noida, near Delhi.

    The shop is the 4000th globally to bear the famous red H&M logo.

    Covering 37,000 sqft (3437 sqm), the store has four floors, each devoted to apparel and accessories for women, men, teenagers and children respectively.

    parineeti chopra h&m india 1

    H&M country manager Janne Einola, area manager Mikko Alatalo and store manager Varun Pratap Singh cut the red ribbon to officially open the store.
    A queue formed ahead of the opening, with the first 10 customers receiving a gift card worth Rs 4000 (US$60), while the next 200 in the queue each received a goodie bag and gift card worth Rs 500.

    parineeti chopra h&m india

    DJ spin-offs were a feature of the launch, as well as dance and fashion contests for the customers.

    Parineeti Chopra was clearly impressed: “I’ve always liked H&M’s exciting and affordable fashion- there is plenty of inspiration in store to create your personal style. The opening was incredibly fun!”

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  • China fires, Hong Kong fizzles for Coach Asia

    China fires, Hong Kong fizzles for Coach Asia

    Coach Asia has reported a strong rise in Mainland China sales in the last quarter – which was eroded by a decline in Hong Kong and Macau.

    The rebounding US fashion retailer says international sales rose 5 per cent in the three months to March 27 to US$448 million and by 7 per cent on a constant currency basis.

    “Total China sales rose 2 per cent in constant currency and declined 2 per cent in dollars with double-digit growth and positive comparable store sales on the Mainland offset in part by continued weakness in Hong Kong and Macau,” the company said in its earnings statement overnight.

    Hong Kong’s subdued luxury market and high currency value significantly ate into the Greater China figures.

    In Japan, sales rose 7 per cent in constant currency, despite a decrease in square footage, while dollar sales rose 8 per cent, reflecting the stronger yen.

    “Sales for the remaining directly operated businesses in Asia posted solid growth in constant currency but rose slightly in dollars,” the company reported.

    Coach’s total sales were $1.03 billion for the third quarter, compared with $929 million in the same period of last year, an increase of 11 per cent. On a constant currency basis, total sales increased 13 per cent. Gross profit totaled $713 million versus $665 million a year ago, up 7 per cent, while gross margin was 69 per cent versus 71.6 per cent.

    Neil Saunders, said while Coach’s sales uplifts were modest when compared to prior year declines of 24 per cent in North America and 3 per cent in international markets, they added to the sense that a long promised recovery of the brand is starting to materialise.

    He said the Stuart Weitzman acquisition continues to add value to Coach’s top line, despite fairly weak margins. “To an extent this, along with the strong dollar, has under minded progress made in rebuilding margins for the core Coach brand.

    “While Coach has done much to rebuild its brand there is still further to go within North America before it sheds its image of being a ubiquitous product focused on discounting. The recent heritage campaign and the reduced promotional stance are helping to shift perceptions, and as such the direction of travel is correct,” observed Saunders.

    “With greater emphasis on product design, marketing, and store environment Coach should be able to rebuild traction within its core North American market over the course of the next quarter.”

    Coach CEO Victor Luis  said the company’s performance was in line with expectations and reflected “the consistent execution of the transformation initiatives put into place nearly two years ago, in spite of volatile tourist spending flows, as well as macroeconomic and promotional headwinds”.

    “We are delighted with how our plan for the Coach brand continues to unfold and is driving improvement across our financial metrics. We are on track to return to positive comps in North America in the fourth quarter and to achieve an inflection in our profitability.”

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  • Korea to allow four new duty-free shops in Seoul

    Korea to allow four new duty-free shops in Seoul

    Korea will allow four more duty-free shops to open in Seoul to meet growing demand from Chinese tourists, the government announced Friday.

    “Four new licenses will be issued for operation in Seoul, while the city of Busan and Gangwon Province will also get one each,” Lee Myung-gu, director of the Korea Customs Service, said at a press briefing in Sejong.

    The licensees will be selected by the end of this year through an open competition, the official explained, with one ticket reserved for midsized companies.

    Seoul currently has nine tax-exempt retail outlets. Friday’s decision will raise the total to 13.

    Duty-free stores are a rare bright spot in Korea’s lackluster retail sector, growing by an average 20 per cent over the past five years. Last year, they posted a combined 9.2 trillion won ($8 billion) in sales.

    Major retail giants Lotte Duty Free, part of Lotte Group, SK Networks of SK Group and Hyundai Department Store hailed the decision, vowing an all-out effort to win a license.

    For Lotte and SK, in particular, this represents a second chance after they failed to renew the license for shops that they have been running for years.

    “We will make utmost efforts to win the license back,” SK Networks said in a press statement after the announcement.

    SK’s only duty-free outlet inside the Walkerhill Hotel in eastern Seoul faces closure in May with the expiry of its license.

    Lotte, which runs the top duty-free store by sales in Seoul, has to shut its Lotte World Tower outlet in southern Seoul by the end of June. The Lotte World Tower shop ranked third by sales in 2014.

    Hyundai Department Store said it wants to open a tax-free retail outlet at Coex in the southern shopping district of Gangnam.

    The government last year changed its policy on duty-free shops, holding an open competition for operational licenses for the first time. HDC Shilla Duty Free, Hanwha Galleria and SM Duty Free grabbed new licenses to open outlets in Seoul, while Doosan and Shinsegae beat Lotte and SK to win theirs.

    The government, however, has changed its stance again this year, extending the operational licenses of local duty-free stores to 10 years from the current five. Also, the licenses will be automatically renewed to help the companies run their businesses in a more sustainable way.

    The decision to open the field wider for competition is a move in line with the government’s efforts to grow tourism and revive the sluggish domestic economy and create jobs, the KCS explained in a press statement. It expects the new licenses to spur domestic investment of 1 trillion won and 5,000 new jobs.

    Korea is the world’s largest duty-free market, accounting for more than 10 per cent of global revenues from duty-free shops.

    In 2014, it saw foreign tourist arrivals rising to a record 14.2 million, greatly helped by a surge in visitors from neighbouring China.

     

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  • Is Growth For Luxury Brands in China Over?

    Is Growth For Luxury Brands in China Over?

    China and the Chinese played a primary role in the growth of the luxury sector in the past decade. But what was once a boon for luxury goods brands is now turning around.

    Chinese consumers account for the largest portion (31 percent) of global luxury spending, up from only 1 percent in 2000, according to a study by consulting firm Bain & Company. And in the past decade, thanks to China and Chinese shoppers abroad, the luxury goods market worldwide grew by 72 percent in size.

    luxury goods

    (Statista)

    “The relentless expansion of the domestic economy that fueled China’s voracious appetite for the finer things in life has slowed,” Exane BNP Paribas analyst Luca Solca.

    “This only compounds the chilling effect that the government’s anti-corruption campaign has had on demand for luxury fashion and fine jewelry.”

    Many luxury goods brands opened up store after store to tap the Chinese market. The experts are now debating whether they are too exposed to China.

    In his analysis, Solca looked at whether each brand is over- or underexposed to the Chinese market based on the number of stores they have. Accordingly, Versace is the most over-exposed brand with 22 percent of its stores based in China. Moncler, Tod’s, and Dolce&Gabbana are among the overexposed brands as well.

    The only large brands underexposed to China are Hermes, Tiffany, and Michael Kors. And these brands still have some retail expansion opportunity in China, according to Solca.

    (Source: Exane BNP Paribas analysis, RE-Analystics, Business of Fashion)

    (Exane BNP Paribas analysis, RE-Analytics, Business of Fashion)

    Sales of luxury products in the mainland have started to slow down after Chinese regime leader Xi Jinping launched his political anti-corruption campaign in 2013. Many of the Chinese officials and their numerous cronies and associates notorious for using luxury items for bribes stopped shopping for those items.

    A slowdown in the Chinese economy since mid-2015 was the second blow for luxury brands. Some brands have already started closing stores in China.

    “A corollary to the drop in domestic sales is a reduction of the store footprint by most brands, with a greater focus on fewer, larger, and better-located stores” Bain & Company stated in its report on China’s luxury market in 2015.

    Louis Vuitton, which is the most valuable luxury brand in the world, closed six stores and opened two new stores in China in 2015. And the company recently announced the closure of two additional stores located in Shanghai and Shanxi.

    Meanwhile, Gucci closed five stores in China, Burberry closed two stores, and Prada closed four stores in 2015, according to the Bain report. Due to collapsing demand in China, brands are expected to shut more stores across the country in coming months.

    Adding to the industry’s woes, publicly traded luxury goods companies announced weaker than expected results in April 2016, caused by slowing Chinese tourism in Europe. Burberry Group Plc, Prada SpA,Kering SA, and LVMH Moet Hennessy Louis Vuitton SE all reported disappointing results following terror attacks in Europe.

    According to Bruno Lannes, a Bain partner based in Shanghai, luxury brands should place greater emphasis on exclusive and fashionable collections, digital platform engagement and digital content, as well as pricing, in order to remain competitive in rough times.

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  • Under Armour’s big first quarter

    Under Armour’s big first quarter

    Apparel and footwear chain, Under Armour, has reported net revenue growth of 30 per cent for the first quarter of 2016.

    The increase saw the sports brand reach net revenue of $1.05 billion, with the 2016 outlook raised to $5.0 billion representing growth of 26 per cent over 2015.

    “For the past 24 consecutive quarters or six years, we have driven net revenue growth above 20 per cent and we are incredibly proud of our start to 2016 with first quarter net revenue growth of 30 per cent,” said Under Armour chairman and CEO, Kevin Plank. “The strong results posted this quarter truly demonstrate the balanced growth of our brand across product categories, channels and geographies.”

    During the first quarter, wholesale net revenues grew 28 per cent year-over-year to $744 million compared to $579 million in the prior year’s period. North America net revenues for the first quarter grew 26 per cent year-over-year, or 27 per cent on a currency neutral basis.

    International net revenues, which represented 14 per cent of total net revenues for the first quarter, grew 56 per cent year-over-year, or 65 per cent on a currency neutral basis.

    “In footwear, this includes the remarkable success of the Stephen Curry signature basketball line, as well as the exciting launches of our first smart running shoe and our new line of Jordan Spieth inspired golf shoes,” said Plank.

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  • Old Navy Indonesia makes debut

    Old Navy Indonesia makes debut

    American apparel and accessories brand Old Navy Indonesia has opened its first retail outlet at the Central Park Mall in west Jakarta.

    Offering American-style basic clothing items, Old Navy is part of the Gap portfolio alongside Athleta, Banana Republic and Intermix. The brand has more than 700 stores and shops-in-shop in 11 countries, including the Philippines.

    Old Navy Central Park mall Indonesia

    “Indonesian customers understand the international retail scene very well,” says Old Navy senior director of franchise buying Michele Chinn Fahey. “There’s a really a high awareness of international retail brands and a growing demand for American fashion.”

    For its Indonesian debut, Old Navy is collaborating with Armaan Retail Indonesia.

    Old Navy Central Park mall Indonesia 1

    “With 250 million people living across 15,000 islands, and three different time zones, Indonesia has huge potential,” says Armaan Retail CEO Benjamin Handradjasa.

    Old Navy’s store covers 1200 sqm and offers clothing and accessories for men, women, children and babies. There is also a special section for maternity clothes.

    Among the store’s first customers on its opening day was Indonesian actress and singer Ana Octarina.

  • Versace Asia to open Central flagship

    Versace Asia to open Central flagship

    While other luxury brands are scaling back in Hong Kong’s subsiding retail market, international fashion brand Versace Asia plans to open a flagship store in Central in October.

    Shanghai Commercial Bank says the Milan-based fashion house has signed a three-year lease, with an option to renew, for 12,600 sqft (1170 sqm) on the ground and first-floor levels of a redeveloped building owned by the bank in Queen’s Rd.

    “We needed to pick clients in this market,” says the bank’s CEO David Kwok, noting that it interviewed Versace “for quite some time”.

    “Many other players wanted to sign Versace. You can’t miss our tower when driving through Central. It’s a good address for them,” says Kwok.

    “It goes to prove Hong Kong is a true financial centre. We had thought the market would be very bad, so we were quite modest when setting our pricing.”

    Jeannette Chan, JLL regional retail director, said Versace was taking advantage of declining retail rents and the availability of space in Central.

    “Versace sees it is an optimal time to boost its brand presence in Hong Kong.”

    Versace has two retail stores in Hong Kong, in Admiralty and Tsim Sha Tsui. Its new Asia flagship will sell men’s and women’s apparel, jewellery and accessories.

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  • On Pedder takes first step into eCommerce

    On Pedder takes first step into eCommerce

    Hong Kong shoe retailer On Pedder has launched an eCommerce site featuring a curated mix of luxury footwear.

    It is centered around the retailer’s Pedderzine, a seasonal art-fashion hybrid magazine distributed to customers.

    Complimentary shipping is being offered by the site, with returns possible, for customers in Hong Kong, Japan, Macau, Philippines, Singapore, South Korea, Taiwan and Vietnam, as well as Australia and New Zealand.

    Brands include 3.1 Phillip Lim, Aquazzura, Chloe, Common Projects, Gianvito Rossi, Giuseppe Zanotti Design, N⁰21 , Neil Barrett, Nicholas Kirkwood, Paul Andrew, Rene Caovilla, Sophia Webster and Valentino.

    More brands are showcased under the “On Pedder Love” section of the site, along with exclusive product.

    On Pedder collaborated with Hong Kong photography and video artist Luke Casey for Pedderzine this season, which focuses on Hong Kong and Kowloon’s roots and was shot on the streets of Jordan and Sham Shui Po and Jordan, including karaoke bars, back alleys, markets and brothels.

    “We wanted to create an online destination for our customers to enjoy the energy and aesthetics of our in-store curation,” says Pedder Group president Peter Harris.

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  • New Shiseido Travel Retail division set ¥18.5 billion target for FY2016

    New Shiseido Travel Retail division set ¥18.5 billion target for FY2016

    Shiseido is set to create a new travel retail unit, based in Singapore, on 1 May, combining the skin care, make-up and fragrances arms of the Japanese beauty house’s worldwide travel retail business, according to a report published by Travel Retail Business.

    Shiseido Travel Retail has been set a sales target of ¥18.5 billion for the financial year, a considerable jump on the ¥17.2 billion achieved in 2015.

    The new unit will usher in a key account management system, with dedicated regional teams allocated to key customers as well as a new business development function to explore global growth opportunities.

    The new unit is part of the company’s wider 2020 strategy, which will see the company usher in a matrix management structure with six regional entities led by Philippe Lesné.

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  • Another Luxury Retail Brand Cites Tourism Spending as Reason for Slump

    Another Luxury Retail Brand Cites Tourism Spending as Reason for Slump

    French luxury-goods maker Kering SA reported first-quarter revenue that trailed analysts’ estimates as slowing tourism and the strong dollar weighed on demand for Gucci loafers and Bottega Veneta handbags.

    Sales climbed 2.7 percent to 2.72 billion euros ($3.07 billion), Paris-based Kering said in a statement after European markets closed Thursday. Analysts predicted 2.78 billion euros, according to estimates compiled by Bloomberg. Growth was 4 percent on a basis that excludes currency shifts, acquisitions and disposals, compared with the 5.6 percent gain anticipated by analysts.

    Gucci Chief Executive Officer Marco Bizzarri and creative director Alessandro Michele turned Kering’s largest brand around by the end of their first year in charge. Their next challenge is to keep momentum going as a slowdown in China, the strong dollar as well as terrorist attacks in Europe have crimped demand for handbags and garments. Those same headwinds hurt competitor LVMH, whose first-quarter sales also missed estimates.

    Gucci’s comparable sales rose 3.1 percent, slowing from the previous quarter’s 4.8 percent gain. With Michele’s designs accounting for about half of sales in the period, the second straight quarter of growth confirms the turnaround “is starting to get traction,” said Luca Solca, an analyst at Exane BNP Paribas. However, the slower pace shows “Rome wasn’t built in a day.”

    Trends Improved

    The company said in a conference call that sales trends at Gucci have improved since the end of March.

    The biggest disappointment was handbag maker Bottega Veneta, which reported another quarter of declining sales. Revenue fell 8.3 percent, more than twice the decline anticipated by analysts. The brand is suffering from overexposure to Hong Kong and high price gaps between Europe and Asia, along with a slowdown in tourism.

    Bottega may need “more creativity and innovation,” said Exane’s Solca. “Lacking that, the risk could be of appearing boring to consumers.”

    Yves Saint Laurent, which replaced its creative director this month, was again the best performer, posting a 27 percent increase in sales that beat analysts’ expectations.

    “We are confident that we can extend our growth trajectory over the full year,” Kering CEO Francois-Henri Pinault said in the statement.

    Kering’s shares fell 0.8 percent to 160.10 euros at the close in Paris.

     

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  • MCM aims to double sales in five years

    MCM aims to double sales in five years

    German accessories brand MCM, owned and run by South Korean entrepreneur Sung-joo Kim, aims to more than double sales to RM7.8 billion (US$2 billion) within five years.

    Founded in Munich in 1976, MCM is known for its colourful $700 studded canvas backpacks. It  plans to expand in markets from Japan to Europe.

    “We have not even explored the Japanese market yet, we are just starting there,” says Kim.

    Unlike many European brands, MCM does not have a star designer, but has an in-house team of stylists to develop its products. Its collection is loaded with logo-embossed products. Its prices are around the same level as brands such as Celine and Louis Vuitton, and it makes around $700 million in annual sales, similar to Versace, reports Reuters.

    MCM is the second-biggest fashion brand by sales after Louis Vuitton in the duty-free market, where South Korea leads with annual sales of about $8 billion, says Kim. MCM makes about 60 per cent of its sales in Asia, with the balance in Europe, the Middle East and America.

    The youngest daughter of South Korean magnate Kim Soo-keon, Kim built her businesses from scratch after gaining experience at US department store Bloomingdale’s then developing Gucci’s South Korean business. After licensing MCM in 1991, she bought the German brand from a Swiss financier in 2005.

    Kim says she estimates that within five years, 15 to 20 per cent of MCM’s sales could be through eCommerce.

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  • All Saints Japan opens first Tokyo store

    All Saints Japan opens first Tokyo store

    Fashion group All Saints Japan has launched, with a dedicated website as well as a store in Tokyo.

    Out of the UK, All Saints made its Japan debut at Tokyo Fashion Week last month. It partnered with infrastructure company Locondo to develop the digital platform and tailor it for Japanese consumers. Locondo also worked on All Saints’ logistics offer, looking at delivery and returns options, and working out fulfilment logistics.

    All Saints Japan instore 1

    Both menswear and womenswear will be stocked in the 3000 sqft (278 sqm) Tokyo Bay store, as well as All Saints’ debut handbag collection. The store will carry more than 30 styles of leather jackets.

    All Saints Japan instore

    All Saints halved its pretax losses in its last financial year when sales jumped 11 per cent, thanks to its new CEO William Kim, who was brought in to run the business after private-equity firm Lion Capital bought a majority stake. He has closed stores, overhauled its website, streamlined distribution and cut supplier numbers from 400 to 55.

    While All Saints has on-the-ground presence in 18 countries, it ships to 200.

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  • Central Group to buy Zalora’s businesses in Thailand and Vietnam

    Central Group to buy Zalora’s businesses in Thailand and Vietnam

    Central Group is set to buy Zalora’s businesses in Thailand and Vietnam, according to reports.

    Zalora is a fashion-focused e-commerce site.

    Central Group’s assets, which include multiple shopping malls and national department store chains, are worth close to $10 billion and it employs some 70,000 people.

    The deal to buy the country businesses from Zalora will cost Central Group around $10 million each, reported TechCrunch.

    Sources close to Zalora suggest that the company is selling the businesses in an effort to streamline its costs and move towards becoming profitable.

    Even though Zalora was only started four years ago, the company claims 10 million people have downloaded its mobile apps and the company makes 1.4 million transactions per year across 10 countries in Asia-Pacific.

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  • L’Occitane sales on the up despite disappointing performance in Hong Kong

    L’Occitane sales on the up despite disappointing performance in Hong Kong

    French beauty brand L’Occitane has announced sales for the year ending March 31 increased by 8.9 percent at 1.28 billion euros.

    Growth surged on in China – which saw sales grow by 16.8 percent – France, Japan, Brazil and Russia however a poor performance in Hong Kong saw total retail sales in Hong Kong and Macau fall by 15.2 percent. The disappointing results were attributed to a fall in mainland Chinese tourists visiting the region, which also affected Hong Kong’s travel retail sector.

    L’Occitane has a strong presence in Hong Kong with 36 stores in the region.

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