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.

  • Victoria’s Secret Hong Kong flagship store abruptly shut down

    Victoria’s Secret Hong Kong flagship store abruptly shut down

    The high-profile Victoria’s Secret Hong Kong flagship store has been closed suddenly. According to multiple reports, employees were all laid off last night (June 24) on the even of Hong Kong’s public holiday.

    Signs were placed on the store’s entrance announcing the closure and telling customers they could continue to shop online. People visiting the store today could see stock being boxed in the store.

    Operated by Victoria’s Secret’s US parent Limited Brands, the store’s future was questioned by Inside Retail on several occasions, most recently last month as part of a strategic review of the company’s Chinese operations.

    The Victoria’s Secret Hong Kong store opened two years ago after another struggling US retailer Forever 21 quit the site. The lingerie brand’s four-story flagship featured a whole level for its Pink brand, and a floor dedicated to high-end products, complete with the city’s most luxurious fitting rooms.

    Sources said that Limited Brands was paying US$903,000 a month for the 50,000sqft space, which is about half the rent Forever 21 reportedly paid previously. In return, they signed a 10-year lease in 2017 which runs until August 2027. It took nearly a year to fit the store out.

    It is not clear what deal – if any – Limited Brands has agreed to in order to exit the space, however, a senior real estate industry source said last month he doubted the then rumors that the store would close because of the length of the lease.

    “They have a long lease and can’t just walk away. I would be surprised if the landlord takes backspace voluntarily.”

    Our source said the site would be difficult space to fill as it is so large and needs significant capital expenditure to convert into multiple retail spaces or refurbish to suit another brand.

    “If the landlord did take it back, it would need to be sub-divided as it was before with multiple tenants.”

    Another source told a Hong Kong publication that Limited Brands would face a $77 million bill for terminating the contract early – equivalent to nearly 90 months rent.

    In May, Limited Brands reported a 37-per-cent slump in first-quarter sales to $1.65 billion, with revenue from Victoria’s Secret down 45.6 percent, in part due to store closures relating to Covid-19.

    Subsequent to that, a company executive told an analysts’ briefing that it was “evaluating strategic alternatives to reduce or eliminate losses in the UK and China”. The Victoria’s Secret UK business subsequently collapsed early this month.

  • Espoir enters offline channels in Japan

    Espoir enters offline channels in Japan

    Amorepacific’s makeup brand Espoir has entered Japanese offline retail channels after making an online debut in April.

    The South Korean brand expanded into some mainstream multi-brand shops in Japan including @Cosme, Loft and Tokyu Hands. The brand’s top-selling products such as Pro Tailor Be Glow Cushion, Water Splash Suncream or Real Eye Palette are now on sale at these stores.

    “We plan to broaden our product range in response to the demand of local customers,” said Jieun Lee, brand communication manager at Espoir. “Starting with the Japanese multi-brand shop channel, we will expand the global retail network further.”

    Espoir entered the Japanese beauty market through several online channels in the country including Qoo10, Rakuten, Yahoo Japan and Amazon Japan. Since then, the brand has attracted many local customers who are fond of South Korean makeup.

  • 6ixty8ight makes Japanese debut with online launch

    6ixty8ight makes Japanese debut with online launch

    Hong Kong lingerie brand 6ixty8ight marks its Japanese debut tomorrow by launching an e-commerce store.

    The 6ixty8ight Japan online store will be used to build brand awareness in the market before the first physical stores open later this year.

    “The brand’s expansion strategy has been highly focused on e-commerce since the last quarter of 2019, which also became the top business priority as a result of multiple markets being locked down due to Covid-19 epidemic since the beginning of 2020,” the company said in a statement.

    The online store will feature a full range of lingerie, homeware, casualwear and accessories. The brand will also introduce its new collections on the Japan online store including Tropical Lace Collection and Everyday Dresses.

    Founded in 2002, 6ixty8ight operates more than 200 stores across Greater China, South Korea, Singapore and Malaysia.

  • How H&M got glocal in Asia

    How H&M got glocal in Asia

    ‘Glocalisation’ is a trend retail chains have been embracing for more than a decade. It’s the art of fostering a local appeal to a globalised retail offer, empowering regional decision making in the hope of creating a bond with people in communities of consumers a world away from the company’s head office, but continuing to enjoy the advantages of critical mass in production, logistics and other back-of-house operations.

    But the fashion industry, trapped in the pressure cooker of seasonality-driven product design and release, has been slow to respond on a global scale. While luxury brands have always found an insatiable audience of consumers in markets like China, where wearing a brand is a sign of status and success, some mainstream global fashion brands have foundered abroad. Gap failed in Australia, Victoria’s Secret had mixed success after discovering its styles, fits and sizes weren’t really a natural match for typically petite Asian physiques. River Island and Banana Republic never took off in Singapore, Marks & Spencer quit Mainland China – and labels like Forever 21 and Macy’s struggled to make any headway on the mainland.

    And that’s before you consider some of the public-relations disasters in recent years by brands large and small who were tone deaf to cultural differences and regional geopolitical tinder points (think Versace, Coach and Givenchy, who learned the hard way not to project Hong Kong, Macau and Taiwan as territories separate from China…)

    Given that context, H&M has begun to stand out from its peers by steadily building affinities with local personalities, influencers and designers – and most recently models. Not just in China, but regionally, one of the few continents where the company is aggressively expanding its store networks as growth wanes in Europe and North America.

    The move has been subtle and undertaken without fanfare (H&M declined to comment for this feature) but it gained momentum last year when the company appointed musician and artist Lay Zhang Yixing as its spokesperson for its menswear collection in Greater China.

    Most recently, the company assembled a group of models from around Asia for a photoshoot for its up-scale H&M Studio Spring Summer 2020 collection, choosing women well known in their home markets. While H&M has long embraced diversity in the talent modelling its new lines, this was something quite unique for the label.

    From Gotland to Sumba

    While top international models posed in the new collections on beaches and sand dunes in America, far away on the island of Sumba in Indonesia, five Asian models created a very different look for the range. The five were Quynh Anh Shyn of Vietnam, who has her own fashion line, Iman Fandi Ahmad of Singapore, and three Malaysians: designer Kittie Yiyi, blogger Rachel Wong and fashion and beauty entrepreneur Bella Kuan.

    The move drove widespread exposure for the brand and the range across Southeast Asia as the models-cum-influencers shared their experiences during the photo shoot, which one Vietnamese fashion magazine described as an “island boot camp”.

    “Free, colourful and bravery – adjectives to describe H&M Studio Spring Summer 2020 – are also adjectives easy to relate to Quynh Anh Shyn’s fashion style during the past year,” it wrote.

    That’s grassroots glocal praise for a fashion brand bedded in Sweden and a range inspired by a research trip to the Swedish island of Gotland, according to H&M creative advisor Ann-Sofie Johansson.

    “The SS20 collection muse is a forward-looking free spirit – someone who surfs, climbs, explores and who wants to experience new things,” she explained at the US launch. “The collection is both raw and refined: natural fabrics with raw edges are mixed with refined elements, such as shiny metallics and futuristic accessories. There’s a freedom in the way the collection can be worn, too: we want our customers to feel that anything goes.”

    Some of the new Studio pieces went on sale in February this year and the balance will be launched in late May.

    China focus

    Unsurprisingly, perhaps, a core focus of H&M’s ‘glocalisation’ in Asia is Mainland China.

    Lay’s appointment was a first for the brand’s menswear collection. The 28-year-old Chinese singer was a member of the South Korean-Chinese boy group Exo and has starred in films including The Island and Golden Eyes. Lay has also served as an ambassador for other global fashion brands, including Converse, Mac Cosmetics, Chaumet Paris and Ray-Ban. Last year he also signed on as Calvin Klein’s first Chinese global spokesperson and publicly terminated a similar contract with Samsung after the company violated the One-China policy.

    When he was signed with H&M, the company said in a statement that the move was aimed at continuing to enhance its market competitiveness and brand influence.

    “The brand is taking a bigger step developing further its business in Greater China based on its menswear products with design and quality.”

    “I hope everyone can see the versatility of H&M men’s wear through Lay’s interpretation,” added Magnus Olsson, GM of H&M Greater China, at the time.

    In late September, H&M released its first collaboration with a Chinese designer Angel Chen, which it says was inspired by the theme of “Kung Fu”.  “The collection portrays a surprising, unique east-meet-west street style via a groundbreaking combination of vivid colour and embroidery,” Chen’s publicity explained.

    Educated in London but now Shanghai-based Chen has her own successful label, which is now sold through 70 retailers around the world, including department stores Bergdorf Goodman in the US, Lane Crawford in Hong Kong, Galeries Lafayette in France and Selfridges in the UK. She has tailored garments for influential celebrities including Bella Hadid, Chris Lee and Fan Bingbing, all influential pop culture figures in Mainland China.

    Lunar New Year provides an opportunity for many international brands to plug in to a core feature of China’s culture and H&M is no different.

    This year, the brand released what was probably its most extensive range yet, spanning women, men and children. Celebrating the Year of the Rat, items featured motifs, bold red colour swatches and comfortable silhouettes, spanning more than 100 SKUs. The accompanying campaign and photography focused on families sharing time together, a core aspect of the festive season across Asia.

    H&M has a long way to go in its Asian journey. While it has an established presence in Southeast Asia, there was – before the coronavirus pandemic – a plan to open stores in smaller cities.

    India is H&M’s fastest-growing market globally, with 47 stores in tier-one cities (compared to Zara’s 22) and an online presence achieving 49-per-cent year-on-year growth last year. It is now targeting smaller cities and has announced a collaboration with local designer Sabyasachi Mukherjee to launch a new collection this year.

    With their rapidly rising middle class, parts of Asia represent a huge opportunity for global fashion brands. Using local models, influencers and celebrities is a sure-fire way to engage with consumers, adding local context to a global brand name.

  • Singapore fashion labels get boost from OneOrchard online store

    Singapore fashion labels get boost from OneOrchard online store

    Singaporean non-profit trade association Textile and Fashion Federation (TaFF) will launch an e-commerce platform in support of local fashion labels.

    Oneorchard.store, scheduled to go live on June 19, is designed to showcase and facilitate exposure of a range of locally-based designers from emerging to established labels. The platform is conceived of as a means to face current challenges in the industry and present an opportunity for sustenance within the Singapore retail market.

    The initiative has been borne out by a TaFF consumer survey showing the popularity of shopping on label e-commerce platforms amongst respondents in spite of the impact of Covid-19.

    A key finding of the survey was that local brands are just as popular as foreign brands within the territory, with 86 percent of respondents willing to make a repeat purchase of a local brand.

    “The launch of oneorchard.store is an essential step in the development of our long-term commitment in boosting the local fashion industry and promoting the local retail ecosystem,” said TaFF spokesperson Jiayi Wong.

    “In support of the recovery and the opening of physical retail, we hope this platform can complement those efforts and carry on working towards building a sustainable retail landscape.”

    TaFF’s portfolio of homegrown talents range from retailers in womenswear to accessories and childrenswear. Participating brands include Adrian Furstenberg, Ans.ein, Bells & Birds, Carrie K, Forbidden Hill, Ginlee Studio, Hher, Josee P, Ling Wu, Minor Miracles, Oeteo,  Plain Supplies, Quintessential, Ranee of Sarawak, R y e, Shirt Number White, The Form, Top Middle Base (Nena), Weekend Sundries and Ying The Label amongst others.

  • Morphe launches Coca Cola cosmetics and accessories

    Morphe launches Coca Cola cosmetics and accessories

    Beauty brand Morphe has teamed up with Coca Cola to launch a new makeup collection.

    Different to Morphe’s usual partnerships with famous beauty gurus such as Jaclyn Hill or Jeffree Star, the co-branding with Coca Cola has marked one of the brand’s biggest collabs.

    Called Thirst for Life Collection, the new beauty line will feature products designed with Coca Cola’s label, including lip glosses, an eyeshadow palette, highlighters and brushes.

    “The Thirst For Life Artistry Palette, in particular, was inspired by the full experience of drinking a Coca Cola – from the green glass of the bottle, to the blues of ice, to the colours of the actual liquid beverage,” the company said in a statement.

    Morphe is not the first beauty brand to collaborate with Coca Cola. The US soft drink brand teamed up with The Face Shop to launch a beauty collection in South Korea.

    The Morphe x Coca Cola Collection was launched today, June 18, with all products priced under US$30.

  • Loss-making Sa Sa will continue to cull stores if landlords won’t compromise

    Loss-making Sa Sa will continue to cull stores if landlords won’t compromise

    Beauty-products retailer Sa Sa International says it will continue to renegotiate rents and quit locations where it cannot get satisfactory rent reductions as it struggles to return to profitability in the decimated Hong Kong retail market.

    The company has just reported a loss of US$66.6 million for the year to March on sales down 29.9 percent to $737.7 million. The previous year, Sa Sa International posted a profit of $60.7 million. However, if a one-off impairment related to retail store assets in line with changing accounting standards, and a loss of $5.3 million related to the closure of the company’s Singapore business are excluded, the trading loss would have been a more modest $26.4 million.

    Retail and wholesale sales in Hong Kong and Macau fell 33.2 percent to $611.5 million.

    Between October 1 and June 14 this year, Sa Sa has closed 12 stores in Hong Kong, primarily in the tourist districts of Tsim Sha Tsui, Causeway Bay and Mongkok.

    “As we move into FY2020/21, we strive for a significant rental reduction in the renewal negotiations or closures of shops with an unsatisfactory rental reduction in order to reduce the rental expenses of the group as more leases will expire in this financial year,” said chairman and CEO Simon Kwok in a commentary for shareholders.

    “Meanwhile, we will continue to negotiate with landlords for temporary rental relief for shops with leases not yet expiring in the near term.”

    With new leases, the company is exploring changing from fixed-rental rates to turnover rent, which is the arrangement adopted for almost all of its current leases in Hong Kong and Macau.

    “This would help merchants such as Sa Sa and our landlords to align interests during market fluctuations,” said Kwok. “However, some landlords are willing to offer this arrangement only on a temporary basis.”

    Like most Hong Kong discretionary retailers Sa Sa has been hit heavily by declining tourist numbers from Mainland China, at first related to general economic malaise across the border, then concerns over protests from June last year and finally Covid-19 effectively ending border crossings since January.

    The chart below shows the change in the number of inbound mainlanders entering Hong Kong month by month between April last year and March this year (blue line), the decline of total retail sales in the territory (pink line) and the change in sales of medicines and cosmetics (black line).

    The year-on-year decline in Mainland tourist sales was 80.2 percent in the fourth quarter, reaching 97.4 percent in February for Hong Kong and Macau SARs combined. In the three months to March last year, mainlanders accounted for 71 percent of Sa Sa International’s sales, but in the same quarter this year just 38 percent.

    “Local consumption declined less by comparison, decreasing by 16.6 percent in the fourth quarter thanks to our quick shift of product sourcing towards personal protection equipment,” said Kwok.

    Inventory reduction

    On a more positive note, Sa Sa managed to cut its inventory by $52.6 million to $129.8 million, thanks to clearance sales and wholesale measures. Turnover days decreased by three days from 104 to 101 during the year.

    While the group’s cash balance reduced to $82.8 million at the end of March, the company says reserves are adequate for its current operational needs.

    “Currently, the top priority for Sa Sa is to manage our costs and working capital to navigate and survive the storm and to adjust our business strategy to ride on the much-awaited wave of gradual recovery,” said Kwok.

    “In addition to closely monitoring our inventory and cash positions, we aim to reduce our inventory by implementing aggressive clearance activities, as well as implementing stringent controls on product order placement to ensure that funds will only be allocated to strategically focused products.

    “While striving to retain stores and staff as much as we can, we aim to realize a leaner cost structure and enhance operational efficiency in order to achieve long term healthy development for the group.”

  • New York fashion label Sies Marjan closes its door

    New York fashion label Sies Marjan closes its door

    New York-based luxury fashion label Sies Marjan has shut down its operations after five years in business.

    Although the brand was backed by billionaire investors, Sies Marjan was financially affected by the impact of Covid-19 pandemic.

    “What we have worked on has been a dream come true,” said Sander Lak, creative director of Sies Marjan. “Thank you to everyone who has given their time and talent to Sies Marjan over the years.

    “We have built a singular brand whose legacy is not just in the clothes and collections but within each person who contributed along the way.”

    Named after Lak’s parents, Sies Marjan made its debut at the New York Fashion Week in 2016 and became famous for its colourful palette.

    The luxury brand successfully secured funding from billionaires, Howard and Nancy Marks, with an estimated net worth of US$2.2 billion. However, Sies Marjan faced a setback after its major stockist Barney New York went bankrupt last year.

  • Shiseido Beauty Square concept store starts in Tokyo

    Shiseido Beauty Square concept store starts in Tokyo

    Shiseido opens its new concept store Beauty Square in Tokyo’s Harajuku district today.

    Located on the first floor of the With Harajuku commercial complex, the 793sqm Shiseido Beauty Square will offer digital experience-based features and a salon, besides its cosmetics ranges.

    Shiseido describes the new retail space as “a spot offering experience and communication to discover, enjoy, and share beauty”.

    Beauty Square is divided into four zones – Go-live, Brand, Installation, and Salon.

    Located at the entrance, the Go-live Zone features a large LED display and signage showing live streaming, video programs, and promotional content.

    The Brand Zone ranges a variety of Shiseido products, covering makeup, skincare and hairstyling.  Brands on sale include IPSA, Cle de Peau Beaute, The Ginza, Shiseido Professional, Dolce&Gabbana Beauty, Nars, BareMinerals, and Laura Mercier.

    A large 4×4 meter LED screen and moving headlights are installed at the Installation Zone which will host events, including digital content and pop-up stores.

    Colorful spheres and motifs “represent the diversity of beauty, constantly change in light and image in sync with body movement and time,” the company explains.

    Here, customers can experience virtual avatar content using Zepeto, an app developed by Naver which allows users to create 3D avatars. There are more than 15 million users of Zepeto in Japan, who at Shiseido Beauty Square can customize their avatars with their favorite makeup and fashion.

    In the Installation Zone, customers go through a virtual experience projecting their avatar character in the store’s special virtual space, taking pictures with friends and avatars of famous brand ambassadors.

    Zepeto actively launches various features and new content, starting from the virtual space, and will provide users with new experiences daily.

    The Salon Zone (above) offers personalized makeup and hairstyling with Shiseido’s beauty artists

    In addition to Beauty Square, the With Harajuku complex also houses a restaurant called Shiseido Parlour The Harajuku on the 8th floor and a beauty academy Sabfa on the second floor.

    Sabfa conducts training for beauty professionals who have a cosmetology license, but in the new stores, training will be expanded to those without a license as a means to nurture more leaders in the profession.

    The new Shiseido parlour restaurant overlooks the forest surrounding the Meiji Shrine. The interior was supervised by Kazuya Ura and the menu features a mixture of French and Japanese cuisine.

  • Struggling Bossini issues another turnover and profit warning

    Struggling Bossini issues another turnover and profit warning

    Troubled apparel retailer Bossini has issued another profit warning after reviewing 11 months of its trading year.

    In a filing with the Hong Kong stock exchange, Bossini says it expects that the loss attributable to shareholders for the period to May 31 was between US$38 million and $42 million.

    The company attributed the loss to the adverse impact of social unrest and the subsequent arrival of the Covid-19 pandemic along with impairment provisions on property, plant and equipment

    Bossini reported a loss of $12 million during the six months to December – more than triple the $3.3 million loss of the same period a year earlier. Sales were down 20 percent to $90 million.

    The company is subject to a takeover offer from a Chinese company controlled by retired Chinese athlete Li Ning, who plans to expand the business in Mainland China.

    A venture called Viva China will buy 1.09 billion shares in Bossini, paying just $6 million for 66.6 percent of Bossini’s issued capital, effectively buying out the family interests of Bossini’s founder Law Ting-pong.

  • Oriental Watch issues profit warning

    Oriental Watch issues profit warning

    Slow-moving stock and falling sales due to the Covid-19 pandemic have prompted listed Hong Kong timepiece retailer Oriental Watch to issue a profit warning.

    The company has advised the stock exchange that net profit for the year to March 31 will fall by about 20 percent.

    Furthermore, for the two months ended May 31, the group’s revenue decreased by more than 10 percent compared with last year (when sales were impacted by social unrest in the territory).

    During the quarter to March, Oriental Watch has allowed for impairment of assets, plant and equipment and provisioned for “slow-moving watches”.

    “There has been no change in the group’s operation as a result of the Covid-19 outbreak and its financial position continues to be strong,” said chairman Yeung Ming Biu in the filing.

  • Superdry exiting Mainland China

    Superdry exiting Mainland China

    British clothing label Superdry is set to quit the Mainland China market after five years of mounting losses.

    Several Chinese-language fashion industry news channels on the mainland are reporting clearance sales in Superdry stores – a rare event in itself – with merchandise discounted by 25 or 30 percent.

    A staff member of a Superdry Xiamen store told Interface Fashion that sold stock was not being replenished. “We have received a notice from the Shanghai company that we will withdraw from the Chinese market in July,” she said, in a comment translated from traditional Chinese.

    News of Superdry’s withdrawal from Mainland China was confirmed by Azoya, which monitors multiple Chinese-language sources, in a LinkedIn post overnight. Azoya said steep discounts of the brand’s merchandise were also being offered on e-commerce platforms such as Tmall, JD and Vipshop.

    Superdry launched in China in September 2015 with a catwalk show at the British embassy in Beijing. In partnership with Trendy International Group which has around 3000 stores on the mainland, Superdry originally planned to open two to five stores in the first year. Each of the two companies pledged to invest £9 million each over 10 years to develop the brand.

    A spokesperson for Superdry’s Chinese partner neither confirmed or denied a decision for the brand to quit China in a note sent to Interface Fashion.

    “At present, due to the impact of the epidemic, Superdry and Trendy Group are currently reviewing the joint venture business and Superdry China operations.”

    Meanwhile, other sources have reported via Weibo that since April 1, about 90 percent of Superdry China employees, from store roles to head office, have been under pressure to take unpaid leave, while management and directors have accepted a 25-per-cent salary reduction.

    Ker Zheng, marketing & partnerships executive with Azoya said that Superdry failed to stand out as a brand in China.

    “Streetwear is trending upscale these days – while the prices at Superdry are high, I don’t think the brand has invested enough in marketing to really differentiate itself from other competitors. It’s not a popular brand,” he said.

    “Apparel is a tough and competitive industry and not many other foreign players besides Uniqlo and Zara have succeeded in China. In the past Chinese males have been less likely to splurge on shopping and prefer to buy simpler clothes, but this is starting to change, so there is hope.”

  • H&M sales tumbled in May quarter

    H&M sales tumbled in May quarter

    H&M says its sales decline in May was slightly below expectations, and less dramatic than during March and April as stores began to reopen across Asia and Europe.

    The Swedish-headquartered fast-fashion retailer said net sales in the three months to May 31 were down by 50 percent year on year to US$3.1 billion.

    More encouragingly, sales in the first 13 days of June were down 30 percent, suggesting a gradual return of customers to stores.

    H&M has 5058 stores worldwide and almost one in five of those remain shuttered due to the Covid-19 pandemic, the company said in a statement.

    The decline in sales was less than at rival Inditex, the parent of Zara, which last week reported a 34-per-cent decline in the week of June 2 to 8.

    But an H&M spokesperson said the pace of the sales recovery “varies largely between markets” around the world.

  • Guess Asia sales up, but store closures loom

    Guess Asia sales up, but store closures loom

    Guess Asia sales are recovering post-Covid-19, but the company will be exiting some stores in the region when leases come up for renewal, as part of a worldwide network trim of 100 outlets.

    The store closures represent about 9 percent of the global fleet and will take place over the next 18 months.

    CEO Carlos Alberini said last week that about 75 percent of the fashion retailer’s leases come up for renewal within the next three years, representing an opportunity to cut back unprofitable stores. Guess has 1169 company-operated shops along with 560 operated by partners.

    In the quarter to May 2, Guess sales globally fell by 51.5 percent to US$260.3 million, compared with $536.7 million in the same prior-year quarter. The company recorded an adjusted net loss of $118.9 million, compared to $19.6 million for the first quarter a year ago.

    In Asia, sales fell by 52.6 percent in US dollars and by 50.6 percent in constant currency terms.

    The Guess Asia regional operating margin decreased by 52.6 percent to negative 56.4 percent in the first quarter, due mainly to the negative impact of the Covid-19 pandemic which resulted in significantly higher inventory reserves.

    Since the end of the quarter, all Guess-run stores have now reopened, however, they continue to experience significant reductions in traffic and therefore, sales. The company said its e-commerce sites have experienced lower traffic, but this has been partially offset by a strengthening in conversion.

    Alberini said the Covid-19 crisis had a material impact on the company, including operations and financial results.

    “To minimize our loss and protect our liquidity, we challenged every aspect of our business which was being significantly impacted by extensive store closures and lower customer demand.”

    With all stores open in Asia, more than 400 in Europe and 180 stores in the US and Canada, Alberini says he is encouraged by initial trading results, which have been better than anticipated. “Our sales productivity for re-opened stores for the second quarter to date has reached roughly 75 percent in the US and Canada and 70 percent in Europe as compared to last year’s level.”

    He said the company was continuing to focus on improving its omnichannel platform centered around the consumer, and improving efficiencies in its global operations.

    “I fully expect to be on the other side of this crisis with a more efficient business model, a more focused and consistent global brand strategy, and a more nimble and agile organization.”

  • Lululemon comes unharmed out of the Covid-19 Crisis

    Lululemon comes unharmed out of the Covid-19 Crisis

    Lululemon has emerged from the Covid-19 crisis as one of its greatest retail survivors, posting an operating surplus in the first quarter while almost all of its apparel contemporaries were bleeding red ink.

    Net revenue was US$652 million, a decrease of ‘just’ 17 percent at a time when apparel brands like Guess dropped by 51.5 percent, and Puma by 50 percent.

    Lululemon reported $32.8 million income from operations in the quarter to May 3, down 75 percent on the same period last year, but an outlier in the industry.

    “Lululemon has managed through the crisis better than every company in our coverage universe (with Nike perhaps the lone exception),” analysts led by Sam Poser wrote, reported by Marketwatch. “Lululemon has cemented its position as the best publicly-traded company in the specialty retailer sector, in our view.”

    In its results statement, Lululemon said Covid-19 forced the closure of all of its company-operated stores in North America and Europe, with others in some Asia-Pacific markets over differing periods during the pandemic.

    But direct-to-consumer revenue soared 70 percent on a constant-currency basis as the company targeted housebound consumers eager to buy comfortable exercise wear in place of their normal office attire.

    Direct to consumer net revenue represented 54 percent of total sales compared to 26.8 percent for the first quarter of last year.

    “We are learning more every day about our guests — how they enjoy interacting with us online and what makes them comfortable as stores reopen,” said CEO Calvin McDonald.

    “Our strong digital business demonstrates the strength of our guest connection and the long-term opportunity to create further omni experiences going forward.”

    Perhaps the most alarming downside to the quarter was an increase in inventories of 41 percent to $625.8 million.