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  • Harbour City mall boosts market share

    Harbour City mall boosts market share

    Retail sales Hong Kong fell 0.2 per cent in 2014 – but Harbour City mall bucked the trend with an increase in footfall, sales and market share.

    In its annual profit announcement, parent The Wharf Holdings said total sales in the centre grew by 3.4 per cent to set another record of HK$35 billion. Market share improved further to 7.1 per cent, “manifesting its productivity and leading position in the marketplace”.

    Revenue to Harbour City from retail increased by 16 per cent to HK$5.674 billion.

    The Wharf described Hong Kong’s retail market last year as “challenging,” primarily due to mainland China’s anti-extravagance campaign that dented luxury spending and competition from Europe, Korea and Japan as their currencies continued to weaken relative to Hong Kong Dollar and Renminibi. “The ‘Occupy Movement’ towards the end of the year inflicted further damage.”

    The company said good management, size and location are the key success factors contributing to the Harbour City mall’s outperformance in a competitive retail landscape.

    “With 2 million sqft of contiguous mall space, Harbour City is among the world’s leading shopping destinations. It is the core of the “Greater Harbour City” cluster with 6 million sqft spanning vibrant shopping, entertainment, dining and lifestyle in Tsim Sha Tsui’s most dynamic retail area. Its presence strengthens the prominence of the region,” said The Wharf.

    “The coveted Harbour City and its 530 metre contiguous retail frontage along Canton Rd is well positioned as a global retail showcase for celebrated brands and has become the most sought-after location for the best-of-class retailers.”

    Demand from renowned fashion brands for expansion and flagship stores at Harbour City remains intense, the company said. New additions Bvlgari and Valentino and the expansion of Prada took place on on Canton Rd last year. Other expansions inside included Moncler, Celine, Roger Vivier and Jimmy Choo

    New openings or commitments further refined the tenant mix, including Chaumet, Van Cleef & Arpels and Italian fashion brand Armani Collezioni. Michelin star chef’s Italian restaurant La Locanda by Giancarlo Perbellini, French fine dining Dalloyau and Wedgewood’s café opened their debut stores in Hong Kong at Harbour City.

    Jamie (Oliver)’s Italian is also set to open its Kowloon debut. Following the opening of Uniqlo’s largest flagship store in Kowloon in April, Page One’s 37,000 sqft full concept store and Versace’s three-level full concept store were opened in late September and October respectively.

    Meanwhile, Ocean Terminal’s renovation is progressing to plan. Upon completion of the new escalators at KidX and a new atrium as well as creation of three new shops taken up by Mont Blanc, IWC Schaffhausen and Hublot in Golden Mile, new retail and food and beverage attractions on the third floor will be created by mid-2015.

    Designed by Foster & Partners, the extension building plan for OT is pending approval. New culinary options with breathtaking panoramic views of the Hong Kong harbour and skyline will be offered at the extension building.

    The Wharf says a series of trade-mix enhancements as well as the renovation and extension of OT “will further unleash retail value, add growth impetus and bring surprises and excitement to the discerning shoppers”.

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  • Hugo Boss takes control in Asia

    Hugo Boss takes control in Asia

    German luxury fashion retailer Hugo Boss is forging ahead with plans to take direct control of its Asian store network as it looks to the region to offset stagnant sales growth in Europe.

    Hugo Boss says it will take over 17 franchise stores in South Korea and set up its own distribution company in Dubai.

    It will also take over all of its stores in China, currently operated by a joint venture, with plans for 130 shops in the mainland.

    The Russian market is crumbling, on concert with its currency, the rouble. And Germany’s luxury fashion market has lost its lustre in recent times. Fashion retail sales slid eight per cent in the fourth quarter of 2014 according to independent data. Investment house Goldman Sachs Group has advised clients to sell Hugo Boss shares, predicting little growth for the company in 2015.

    But the German company remains optimistic, focusing its hopes on Asia, especially China, where it says there is a growing thirst for luxury fashion.

    “Looking ahead over the next few years, Hugo Boss faces excellent prospects for growth,” said Claus-Dietrich Lahrs, CEO, in a statement.

    In its latest quarterly earnings statement, Hugo Boss reported group-wide sales growth of five per cent to US$721 million and pre-tax earnings of $176 million.

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  • Foodpanda Malaysia eats up rival

    Foodpanda Malaysia eats up rival

    Foodpanda Malaysia is now the largest food delivery service in the country after the US$110 million funding and acquisition of rival Food Runner Group.

    Sidney Ng, country manager of foodpanda Malaysia said the funding from investors underlined the confidence in the venture’s business model and the acquisition of Room Service brought significant synergies.

    Room Service has been in the food delivery industry since 2003 focusing mainly on high end restaurant food delivery in the Klang Valley.

    “With Room Service’s expertise in delivery system and Foodpanda’s strong online marketing, we believe that this synergy will bring in greater food variety and greater delivery efficiency to further delight our customers. This cements our commitment to bring the best restaurant experience directly to the doorsteps of Malaysia,” said Ng.

    Ralf Wenzel, co-founder and CEO of the Foodpanda Group said the investment and acquisition were further steps in the company becoming the leading online food delivery marketplace across the most promising and fastest growing emerging markets internationally.

    “The new funding allows us to fully focus on user experience and customer service with the aim of completely disrupting the way people order food by establishing a real alternative to pizza flyers and phone calls.”

    Foodpanda Group is active in 39 countries on five continents. The company enables restaurants to become visible in the online and mobile world and provides them with a constantly evolving online technology. For consumers, the group’s Foodpanda  and Hellofood brands offer the convenience of ordering food online and the widest gastronomic range, from which they can choose their favorite meal on the web or via an app.

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  • French Connection on comeback trail

    French Connection on comeback trail

    UK fashion chain French Connection has reduced its full year loss as sales recover.

    FCUK has reported an £800,000 underlying operating loss for the year to January 31 – vastly better than the £4.4 million loss in the year to January 31, 2014.

    The retailer, once notorious for its casual fashion items bearing slogans with its abbreviated name FCUK, had fallen out of favour with customers when the ‘joke’ wore off. It subsequently changed its labeling to French Connection and tried to move more upmarket path with its design positioning. But that change took years to gain favour with shoppers.

    The company spent the last year closing unprofitable stores and redesigning its product range.

    Announcing its figures this week, FCUK said same store sales across the UK fell by three per cent year-on-year, citing unusually warm weather in the second half of the year for the drop, in concert with its rivals.

    Wholesale revenues rose 4.6 per cent.

    Chairman and CEO Stephen Marks said despite “difficult retail trading conditions” in the second half the results demonstrated the company has made another step towards returning to profitability.

    “Although we are encouraged by forward orders in our wholesale business, trading on the high street remains challenging and we are planning accordingly.”

  • Linen Club to add 20-25 outlets in India next fisca

    Linen Club to add 20-25 outlets in India next fisca

    Amid rising demand for linen fabrics, Jaya Shree Textiles, an Aditya Birla Group company, plans to add 20-25 Linen Club stores to its retail chain in 2015-16. Jaya Shree has 116 Linen Club stores at present and the company’s fabrics are available through 4,000 outlets across India.

    The company launched its flagship retail store in Bengaluru with a new identity that showcases the largest variety of linen fabrics and products and wherein customers can walk into a store, feel the fabric and get it stitched to their requirement.

    Linen Club has also launched readymade garments that would be soon made available across all stores, said, S Krishnamoorthy, CEO, Domestic Textiles, Jaya Shree.

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  • Sharp to cut 6,000 jobs, spend over USD1.7b to restructure

    Sharp to cut 6,000 jobs, spend over USD1.7b to restructure

    Japan’s loss-making electronics firm Sharp plans to cut around 6,000 jobs, over 10 percent of its workforce, in a global restructuring that will cost over 200 billion yen ($1.7 billion), a person familiar with the plan said on Thursday.

    The job cuts will include around 3,000 in Japan through early retirement and 3,000 overseas, according to the person, who was briefed on the matter but asked not to be named. The company had around 50,000 employees at the end of 2014.

    The display maker expects to post its third annual net loss in four years after weak sales of smartphone screens in China, aggravated by an unexpected comeback by rival Japan Display, derailed its recovery efforts. Last month it forecast a net loss of around 30 billion yen for the fiscal year ending in March, compared with the 30 billion net profit it previously estimated.

    Sharp Chief Executive Kozo Takahashi has been in negotiations with the firm’s main lenders, Mizuho Financial Group, Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ, part of Mitsubishi UFJ Financial Group, for the company’s second major bailout since 2012, people familiar with the matter have said.

    The firm’s banks agreed in September 2012 to provide Sharp with loans and credit lines worth 360 billion yen, or $3 billion at today’s exchange rates, in exchange for promises to return to profit by this year. So far, it has exited the European TV market and closed solar-panel businesses in Europe and the United States.

    One person familiar with the matter previously said Sharp has also asked Japan Industrial Solutions, a corporate turnaround fund, to invest up to $250 million in capital.

    The Nikkei reported earlier on Thursday that Sharp could also shed its North American television business and lower the pay scale for workers in Japan. The Yomiuri newspaper reported Sharp was considering closing its TV factory in Mexico and cutting the size of its North American sales division.

    The company, which is expected to include the restructuring plan in a medium-term business strategy due to be announced in May, said it was considering various options to restructure its business but no decisions had been made.

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  • Dairy Farm cleared to buy Yonghui stake

    Dairy Farm cleared to buy Yonghui stake

    Dairy Farm International has been given regulatory clearance to acquire its target 19.99 per cent stake in Shanghai-listed Yonghui Superstores.

    The deal, announced last August, was conditional on regulatory approvals. Dairy Farm has now confirmed it has received the final and unconditional approval of the China Securities Regulatory Commission, which was the final clearance required.

    The deal, worth RMB5.69 billion (US$908 million), will see the Hong Kong based retail giant take a cornerstone stake in one of China’s fifth largest hypermarket operator. Yonghui had 288 hypermarkets and supermarkets across 17 provinces in China as at the end of 2013.

    Dairy Farm has more than 6100 supermarkets, health and beauty stores, home furnishings shops and restaurants across Asia on its own or in joint ventures. It will collaborate with Yonghui in procurement, fresh food processing and store development.

    “Dairy Farm has for some time been looking for opportunities to participate in the large and high growth Chinese market,” Graham Allan, CEO of Dairy Farm, said in a statement at the time the deal was announced.

    “This strategic partnership with Yonghui provides an attractive way to do that.”

    With clearances now in hand, completion of the purchase is now expected to take place in April.

  • Crocs India terminates franchise deal

    Crocs India terminates franchise deal

    US shoemaker Crocs has cancelled its exclusive franchising agreement in India with Chogori Retail.

    The Colorado-based company, renowned for its unsightly but comfortable shoes, says it will now partner with several retail companies and will ramp up its store roll-out program.

    Crocs debuted in India in 2007 after entering into an exclusive joint venture deal with Chogori retail. Later the contract was converted into a franchise agreement.

    But the venture has been far from successful to date. After eight years the brand has just 30 stores in India, after closing about 12 during the last eight months.

    Crocs says by opening the door to other partners in the fast growing market it can open about 60 new stores over the next three years. The company also has a successful eCommerce operation which already accounts for 10 per cent of its India sales.

    “We have planned out a strategy of having few but strong franchise and shedding some of the partners that don’t, can’t or won’t want to grow with us whatever the reason might be,” said Nissan Joseph, Crocs India GM.

    The last of the Chogori JV stores would close by June.

    “Some will close and reopen, some will reopen in different locations inside the mall and some will reopen through new franchise partners,” he said.

    Chogori, meanwhile, has other priorities. It is the India licensee for Hi-Tec, amongst other brands, and has recently announced a partnership with US adventure wear brand Columbia Sportswear to open 25 stores.

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  • Hysan Place sales soar 22%

    Hysan Place sales soar 22%

    Causeway Bay retail landlord Hysan Development says its core net profit rose 5.9 per cent last year to HK$2.16 billion.

    Turnover rose 5.3 per cent to HK$3.22 billion but the company’s net profit fell 20.4 per cent to HK$4.9 billion due to a smaller ‘fair value gain’ on its investment property valuations.

    The company is now exploring investment opportunities both within Hong Kong and offshore.

    “With a strong balance sheet and proven financial discipline, Hysan is now well-positioned to seek opportunities beyond our core portfolio in Causeway Bay,” said chairman Irene Lee Yun-lien.

    Hysan, which owns Hysan Place and Lee Gardens, said retail sales within its property portfolio increased 22 per cent year-on-year – against a 0.2 per cent fall in Hong Kong’s overall retail market. A major contributor to that was the opening of an Apple store in Hysan Place.

    Deputy chairman and CEO Lau Siu-chuen said the company was unconcerned about possible tightening of mainland travellers access into Hong Kong.

    He said Causeway Bay is far from the Shenzhen border and the centres have not been a popular destination for Chinese using multiple-entry permits.

     

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  • Vipshop takes stake in Ensogo

    Vipshop takes stake in Ensogo

    Chinese eCommerce company Vipshop has taken a cornerstone stake in southeast Asian online retailer Ensogo.

    The deal will open the way for Vipshop’s inventory to be offered on Ensogo and for the two parties to share commercial and business expertise to drive Ensogo’s growth.

    Australian Stock Exchange listed Ensogo has also raised US$7.5 million from the issue of nearly 60 million shares to equity fund investor Ward Ferry, through a subsidiary WF Asian Reconnaissance Fund.

    Ward Ferry will now hold a 10.6 per cent stake and Vipshop 12.2 per cent. The total capital raised in the two transactions is approximately $12 million.

    Ensogo CEO Kris Marszalek said to have an investor of the caliber of Ward Ferry was exciting.

    “The additional AU$10m of funding means we are perfectly positioned to execute on the tremendous opportunity our strategic relationship with Vipshop brings, as well as on the enormous opportunity for eCommerce in Southeast Asia.

    “As a part of the (Vipshop) strategic investment, the companies will also enter a strategic operating partnership, whereby Ensogo will have access to Vipshop’s vast volume and selection of existing inventory, all to be made available for immediate shipping. The companies also intend to cooperate in the areas of logistics, merchandising, technology, marketing and user acquisition; the very expertise, which enabled Vipshop to scale its revenues from US$32 million in 2010 to US$3.77 billion in 2014,” said Marszalek.

    “We’re excited to be in the perfect position to build the Vipshop of Southeast Asia.”

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  • Bitcoin breakthrough

    Bitcoin breakthrough

    Japanese eCommerce giant Rakuten will start to accept bitcoin, the ‘cryptocurrency’ on its global marketplaces.

    TechinAsia.com reports the payment format will begin its roll out in America and then spread to Rakuten Germany and Rakuten Austria.

    Bitnet, an enterprise-focused developer that creates bitcoin platforms, is Rakuten’s partner in the rollout. Bitnet is a young company, founded in January 2014, but it is not your average startup. The team behind the firm also created CyberSource, a payment gateway sold to Visa for US$2 billion.

    “Rakuten’s mission is to empower the world through the Internet,” commented Yaz Iida, president of Rakuten US in a statement. “Not only can Bitcoin support this vision by helping our merchants better compete globally, but it also has the potential to benefit society by enhancing the security, privacy, and convenience of financial transactions. This is one of the reasons why we invested in Bitnet last year and we look forward to working with them on our US marketplace.”

    Rakuten’s move indicates that it is moving closer and closer to accepting Bitcoin. Already, its American logistics subsidiary accepts the currency. With its core ecommerce operations now getting integrated, it could just be a matter of time before the Japan office follows suit, writes David Corbin of TechinAsia.com

    It would not be the first Japanese tech titan to accept Bitcoin. GMO Internet set that precedent last September. However, Rakuten’s integration of bitcoin domestically could be the sort of move that pushes the currency into the mainstream. Rakuten is used by almost every adult in Japan. It has over 97 million registered users while Japan itself has a population of 127 million. Those users drove US$16.5 billion worth of sales last year.

    For Japanese bitcoin enthusiasts, the march towards widespread acceptance in their country is a long slog. With Rakuten’s latest signal of support, the goal becomes less of a mirage and more of an steadily approaching reality.

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  • Spotlight Malaysia opens second store

    Spotlight Malaysia opens second store

    Australian fabric, craft, party and home and living superstore Spotlight has opened its second store in Malaysia.

    The new stores is in the IPC Shopping Centre, Mutiara Damansara in Petaling Jaya, near Kuala Lumpur. It follows one in Ampang Point, Kuala Lumpur, which opened last July.

    Spotlight Malaysia 7-315.

    The store offers 2000sqm of retail space, and stocks 70,000 products in six categories: home furnishings and decor, bedding, dress and fashion fabrics, crafts, hobby and party essentials.

    Spotlight Malaysia 315

    Spotlight GM Juno Gelfand said the expansion to the IPC mall was part of Spotlight’s philosophy “to be able to offer more neighbourhoods the largest possible choice of fashionable and affordable products”.

    Spotlight Malaysia 6-315.

    “We know too well the inconvenience of searching far and wide, running from store to store just to find that one (or more) beautiful decor piece.

    Spotlight Malaysia 4- 315.

    “Here, with all-time popular home essentials and seasonal selections of products for every room of the house available under one roof, we are certain that sprucing up the home will be less stressful and hassle-free,” he said.

    Spotlight Malaysia 3- 315.

    Spotlight Malaysia 2- 315.

    “Think of it as a pit-stop whenever you are preparing for a party, breathing new life into your home interiors, or pursuing your hobbies.”

    Spotlight Malaysia 5- 315.Spotlight Malaysia 1 - 315.

    Spotlight is targeting home decorators, dressmakers, hobbyists and DIY enthusiasts as well as party organisers.

  • Chengdu IFS mall excels

    Chengdu IFS mall excels

    The 206,000sqm Chengdu IFS mall which opened last year is trading 21 per cent ahead of budget.

    The mall’s success helped drive Hong Kong-based parent The Wharf Holdings’ Chinese revenues by 57 per cent to HK$1.984 billion in 2014. Operating profit in the market rose 30 per cent to HK$991 million.

    Located on the prime intersection of Hongxing Rd, Dacisi Rd and Beishamao St, Chengdu’s busiest pedestrian shopping area, the IFS (International Finance Square) mall is modelled on The Wharf’s Harbour City mall in Hong Kong.

    The total development area of 760,000 sqm features a mega shopping mall designed by Benoy, two premium-grade A office towers designed by Kohn Pederson Fox Associates, a luxurious residential tower and a premium hotel. The mall and the office towers were completed in 2014 and the full development will be completed this year.

    “Since its opening in early 2014, the mega mall has become a one-stop lifestyle shopping landmark in Western China, thanks to its unparalleled location, critical mass, world-class management and services,” said The Wharf in its 2014 profit announcement.

    “Its most comprehensive trade mix, lifestyle and entertainment offering fuels strong demand from the rising middle class. The presence of nearly 300 of the world’s most coveted brands (including over 100 debut stores of renowned brands in Western China) underlined retailers’ confidence in Wharf’s management expertise. With its 530 metre retail street frontage on par with Harbour City’s Canton Rd frontage, Chengdu IFS is comparable to Harbour City in terms of showcase effect and attraction power.”

    The mall is over 99 per cent leased, with 98 per cent of shops already trading. Since its opening, retail sales jumped 400 per cent and foot traffic by 250 per cent at year-end.

    The mall generated a revenue of RMB483 million in 2014, 21 per cent above target, and is expected to reap an annual retail revenue of RMB600 million at full operation.

    Further China success

    The Wharf’s other properties also enjoyed improved fortunes in 2014.

    Shanghai Times Square, located on Huaihai Rd, has been transformed into a high-end retail destination with the largest Lane Crawford store in China and a mega lifestyle specialty store City’Super, upon completion of its substantial renovation in 2013. The renewed mall alongside the new cluster on HuaiHai Rd and the new Lane Crawford complements one another and creates value. Shanghai Times Square was over 99 per cent occupied at year-end after the tenant mix was further refined with the addition of new brands, culinary and lifestyle tenants.

    The Wharf group is developing five IFSs in China, with a scale comparable to or surpassing that of Harbour City and Times Square in Hong Kong. These IFSs, upon full completion by 2017, will significantly enhance the group’s recurring income base in China and be a significant growth driver.

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  • SF aims to revolutionise community mall business in Thailand

    SF aims to revolutionise community mall business in Thailand

    Siam Future Development Plc (SF), a SET-listed community mall developer, will resume its expansion by allocating 1.5 billion baht to develop up to three new community malls in the next three years.

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  • Tag Heuer latest luxury brand to tweak prices on forex

    Tag Heuer latest luxury brand to tweak prices on forex

    Tag Heuer, French luxury group LVMH’s biggest watch brand, said on Wednesday it planned to freeze prices in some markets while it cuts them elsewhere in a move to balance out the impacts of the recent jump in the Swiss franc.

    Prices will drop an average 8 per cent in Switzerland, China, the United States, the Caribbean, and Central and South America, 7 per cent in the UK and 13 per cent in Hong Kong, but Tag Heuer said it would not raise prices in the eurozone, Japan or Singapore.

    “Tag Heuer is seizing the opportunity of the recent appreciation of the Swiss franc to rebalance its international price policy,” it said in a statement.

    The news follows a decision by French fashion house Chanel this week to hike prices in Europe and cut them in Asia to counter the euro’s decline and discourage customers from buying fakes, while Swiss family-owned watch brand Patek Philippe was reported to have already made similar moves.

    The Swiss National Bank’s surprise decision two months ago to abandon its longstanding 1.20 Swiss franc per euro cap caused the currency to surge to 0.86 per euro. The franc is currently trading at 1.064 per euro.

    The euro has lost almost a quarter of its value against the dollar in the last 12 months, meanwhile, including 12 per cent since the start of this year.

    “While price harmonisation is easier said than done and forex volatility tends to make things quite complicated, we believe the era of global, unique pricing in the industry is not that far-fetched nor that far away,” HSBC luxury analysts wrote. “Chanel and Patek are showing the way.”

    The analysts said they did not expect many other brands to increase prices significantly short-term in Europe “as there is a risk of alienating what little is left of local European consumer interest”.

    However, they expected most moves to come in Asia, “with likely further brands trimming in Hong Kong and in mainland China, but also likely increasing prices in Tokyo”.

    Patek Philippe did not immediately respond to an email seeking comment.

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