Retail News CRM

Tag: International

  • Nike develops performance hijab

    Nike develops performance hijab

    Nike has developed a performance hijab for Muslim women athletes.

    The head covering, called the Nike Pro Hijab, has a single-layer pull-on design made from lightweight polyester in dark, neutral colors. Tiny holes in the fabric make it breathable while remaining opaque.

    Nike says it began work on the hijab after Muslim athletes complained about wearing a traditional head scarf during competition. The design process took 13 months, and the final product will be ready to roll out in the company’s spring 2018 collection.

    Meanwhile, a prototype is already being worn by Emirati figure skater Zahra Lari, who says few hijabs work for her when performing. “But once I put on the Nike hijab and took it for a spin on the ice, I was blown away by the fit and the light weight.”

    News of the new product comes just weeks after Nike released a commercial in the Middle East featuring five female professionals from different parts of the Arab world pursuing their athletic dreams while a voice asks, “What will they say about you?” – a rhetorical question many young Arab women face if they step out of cultural and traditional norms. The video went viral with million of views on social media, prompting a debate over its message.

    Lees ook:

  • Nike plus-sized workout range launched in US

    Nike plus-sized workout range launched in US

    A new Nike plus-sized range will expand the US sportswear brand’s reach – and appease those who criticise it for focusing on the purely athletic.

    The new workout wear range includes sizes from XL to 3XL.

    “Nike recognises that women are stronger, bolder and more outspoken than ever,” the sportswear giant said in a statement.

    “The days where we have to add ‘female’ before ‘athlete’ are over. She is an athlete, period. And having helped fuel this cultural shift, we celebrate these athletes’ diversity, from ethnicity to body shape.”

    Like Nike’s core range, the plus-size collection will use the same technology in design and fabric and includes sports bras, running tights, high-tech hoodies.

    Helen Boucher, VP of women’s training apparel, says when the company created its range it did not just make existing products larger.

    “That doesn’t work because as we know, everyone’s weight distribution is different.”

    The pressure will now be on rivals like Lululemon, Puma and Adidas to follow suit…

    Lees ook:

    Lees ook:

    Lees ook:

  • Abercrombie & Fitch ends year weak

    Abercrombie & Fitch ends year weak

    Abercrombie & Fitch ended the year in a tailspin, with sales down by almost 7 per cent and operating profit falling 49 per cent.

    The embryonic recovery seen at the start of this fiscal is now little more than a faded memory. Fortunately, the group has a fairly strong balance sheet and remains profitable, which provides some comfort that it has the time and financial firepower to try and turn things around.

    That said, it is now clear that fairly decisive and radical action is required to reconnect the brands with consumers. Especially so for Abercrombie which has, like last quarter, seen same-store sales deteriorate at a rapid pace. While factors like reduced tourist spend at flagship stores and negative mall traffic have pushed down sales, the main reason for the decline is that Abercrombie simply doesn’t resonate with customers like it once did. In essence it has lost its reason for existing.

    This is a serious issue and is one that needs an urgent remedy. Worryingly, A&F has already tried to shift perceptions and engineer a turnaround, but this is clearly not delivering. Part of this comes down to the fact that, to date, the company’s efforts have been rather patchy and piecemeal, and this has been insufficient to cut through with consumers.

    The recent marketing campaign, with the strapline of “people have a lot to say about us, they think they’ve got us figured out”, exemplifies this approach. Not only is the message confusing and opaque, but the promise of change that it suggests is not entirely delivered on by stores which look and feel the same as they have always done. To be fair, some developments – including making products more mature and stylish – have been substantial. However, when the package they are delivered in has not evolved it is difficult to communicate such efforts effectively.

    Fortunately, A&F is making an effort to change its stores – as the new format launch in Columbus, Ohio proves. This is a step forward and is more reflective of what the brand now wants to stand for. The integration of improved customer service elements – like better fitting rooms and the ability to place online orders from the store – are also helpful in making the environment more friendly, inclusive and welcoming.

    As good as the new format looks and feels, A&F will only roll out seven of them this year, so it is unlikely they will have a material impact on sales growth. However the cautious pace is sensible given the new concept has yet to be proven. In any case, it is likely that there will be existing stores in some locations where poor performance and declining traffic does not justify significant capital expenditure on refurbishments.

    A&F is clearly hoping that all of its changes will allow Abercrombie to shift into a higher gear – much as has been the case for Hollister, where positive same-store sales were achieved this quarter. But A&F still has much more work to do in building a new base of customers and this is a long-term effort that may not have a tangible impact on sales for many quarters.

    This noted, A&F is going in the right direction. As it has shown with Hollister, which is more advanced in its redevelopment program, the reinvention work will ultimately pay dividends. However, the company cannot turn on a dime and there will likely be a number of bumpy quarters ahead before recovery comes.

  • BCBG Max Azria bankruptcy is on process

    BCBG Max Azria bankruptcy is on process

    BCBG Max Azria has filed for bankruptcy protection.

    The filing is the latest step in a restructuring plan aimed at rescuing the business, following the closure of 120 stores.

    “Like many other apparel and retail companies, BCBG has fallen victim in recent years to adverse macro-trends, including a general shift away from brick-and-mortar to online retail channels, a shift in consumer demographics away from branded apparel,” said chief restructuring officer Holly Felder Etlin in papers filed with the Federal Court in Manhattan.

    As reported in January, the fashion label is crippled with a debt said to be as high as US$665 million. More recent reports say the “secured debt” is worth about $485 million. But its total sales last year were just $600 million. The restructuring plan is dependent on a $45 million loan which must be approved by the court.

    The company had embarked on a restructure which would involve slashing its US store network and refocusing on e-commerce and wholesale sales. The company has flagship stores in Tokyo and Hong Kong, but it is the wholesale division which supplies stores bearing the brand’s name in other Asian cities, including Ho Chi Minh City. Retail accounts for 71 per cent of its turnover.

    One of BCBG Max Azria’s advisors told landlords in February that its retail sales had declined 20 per cent during the past three years – a major change of fortune for a company which in 2013 was mulling an offer valued at $1 billion.

    Under January’s restructure plan, the company was looking at closing 120 of its 200 US stores – but now reports suggest almost all of them will be closed under bankruptcy protection. The company also has mounting debt to landlords in unpaid rent.

    BCBG Max Azria Group was founded by Tunian Max Azria in 1989. Educated in France before developing a passion for fashion, he was later based in California where he drove the BCBG Max Azria brand, but he is no longer associated with the company. His brother Serge founded women’s fashion labels Joie, Current/Elliott and Equipment.

    Dresses from BCBG Max Azria have been photographed firmly fitting celebrities including Selena Gomez and Drew Barrymore.

    BCBG is an acronym for the French phrase “bon chic, bon genre” or “good style, good attitude”.

    Lees ook:

  • Giorgio Armani consolidating brands

    Giorgio Armani consolidating brands

    Italian designer Giorgio Armani says he plans to consolidate his various collections under three labels as the fashion company undergoes an internal restructuring.

    “There will only be three lines: Giorgio Armani, Emporio Armani and A|X Armani Exchange starting with the spring-summer 2018 season,” he says.

    Armani Collezioni and Armani Jeans will be blended into the main three lines.

    “There was too much confusion with so many collections,” says Armani. “Times have changed, and we have to evolve.”

    Lees ook:

  • Impressive Primark sales growth boosted by new stores

    Impressive Primark sales growth boosted by new stores

    The impressive Primark sales growth over the last half year has been boosted by network expansion with the addition of 16 stores across both Europe and the US – and exchange rates.

    The value retailer expects to end the first half with 329 stores, and 13.1 million sqft of trading space – up 12 per cent year-on-year. Like-for-like sales to date are flat compared with last year at a group level, brought down by store cannibalisation in the Netherlands, but fared better at home, up 2 per cent.

    But tourists drawn to Britain by the low pound have driven sales up 10 per cent at the company’s two London flagships.

    Parent company ABF expects Primark’s sales over the half year to be 11 per cent ahead of last year at constant currency rates. At actual exchange rates, sales are expected to be up 21 per cent.

    Kate Ormrod, senior analyst with GlobalData, says margin pressure will remain the big story for Primark in the second half, especially given its commitment to maintaining prices until August.

    “That’s a necessary move given the importance of staying price competitive at the value end of the market. As a result, operating profit margin for the full year is expected to fall. Some form of price increase can still be expected on Primark’s more expensive products, with investment in design and fit used to justify any hikes, ensuring shoppers still receive value for money,” she says.

    “Being known as the price leader affords Primark some protection at a time when disposable incomes are being squeezed; however, ensuring product ranges remain fashionable and relevant will be imperative to retain appeal.”

    Ormrod says this is particularly important as emerging players such as boohoo.com and Missguided continue to encroach on Primark’s fast fashion unique selling point, enabling them to steal customers and share.

    “Further investment in menswear to address new trends will be important to build Primark’s fashion credentials, as its offer remains more basics-driven than those of rivals such as New Look and H&M,” she concluded.

  • Ellie Goulding shoes launch this week

    Ellie Goulding shoes launch this week

    British singer Ellie Goulding will launch a range of shoes this week, in partnership with German footwear retailer Deichmann.

    Ellie Goulding shoes go on sale Wednesday March 1, marking the singer’s first foray into fashion.

    After racing to the top of the charts with her contribution to the soundtrack of 50 Shades of Grey, she has become one of the UK’s most successful solo artists of the past decade.

    Deichmann says her move into shoes demonstrates her feel for the latest trends.

    “For me, shoes are an indication of what mood you are in,” Goulding said in a statement. “Launching a collection of my own gives me the opportunity to express my style.

    “My collection includes shoes for any occasion – I really can’t decide if I like wearing heels or flats better – I am constantly changing it up.”

    Ellie Goulding shoes include sneakers, ethnic sandals, heels, wedges, espadrilles or mules. The ‘Ellie Goulding for Deichmann’ collection is defined by the motto “Rock your Look”. Bright colours, extravagant shapes, individual trims or rock-star studs give the styles a unique look.

    The accompanying campaign was shot in London by celebrity photographer Louie Banks, and styling was the task of Cher Coulter, who has already worked with stars such as Rosie Huntington-Whitley, Kirsten Dunst and Demi Moore. The director of the accompanying TV spot was no less than Emil Nava, famous for his creation of music videos for Rihanna, Selena Gomez, Calvin Harris and Ne-Yo.

    The collection will be available in selected stores and on the online shop at www.deichmann.com. Styles cost between €19.90 and €34.90. They will be sold in 21 European countries in Deichmann Group stores and online shops.

    Deichmann SE, headquartered in Essen, Germany, was founded in 1913 and is still 100 per cent family-owned. The company is a market leader in the European retail shoe trade and employs over 37,300 people worldwide. It has retail stores in Germany, Austria, Bosnia-Herzegovina, Bulgaria, Croatia, the Czech Republic, Denmark, Hungary, Italy, Lithuania, Poland, Portugal, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Turkey and the UK.

  • Abercrombie & Fitch unveils new store concept

    Abercrombie & Fitch unveils new store concept

    US casualwear retailer Abercrombie & Fitch is about to unveil its first concept store for 15 years.

    In a dramatic change of direction, customers will be able to actually see the stock on display, the brand’s heavy scenting has been toned down and stock will be visible from outside.

    Only two images have been released by the brand, but these show the magnitude of the change of direction.  The concept store will open its doors on February 17, inside the Polaris Fashion Mall in Columbus, Ohio.

    Abercrombie & Fitch previously took pleasure in assaulting customers’ nasal senses as well as providing never-ending entertainment for store staff members who could watch customers walking into mirrors, squinting as bright spotlight beams shining directly into their eyes – and for special kicks, watching mothers with pushchairs trying to navigate narrow aisles, staircases and darkened passages, or children crying because they were scared of the dark.

    In place of the “mausoleum” style of store, the new design is a soft brown hue, strong lighting and subtle fixtures. The concept store was designed by MJ Sagan Architecture, which was also involved in creating the company’s New Albany headquarters.

    An A&F statement says the prototype’s look and feel “is in line with the brand’s new evolution”.

    However, A&F is in serious trouble. In November, Neil Saunders, New York-based MD of GlobalData Retail, described the company’s latest quarterly performance as “disastrous” by any standard.

    “Not only are total sales sequentially worse than last quarter, but revenues at Abercrombie have slumped and net income is down by more than 80 per cent.”

    At the core of the problem is the fact that consumers have grown out of clothing ranges bearing oversized logos.

    “A&F is changing – moving away from its traditional brash, image-obsessed focus toward a more inclusive and more gentle approach with an emphasis on stylish, quality clothing,” said Saunders.

    A&F concept store 2017

    First of seven

    Meanwhile, the new Ohio boutique, which covers 4860 sqft (451 sqm), is the first of seven to be built this year, providing the customer “with a new vision of the brand,” A&F says in a statement.

    “In line with the changes that have taken place over the past 18 months, the space was imagined with the best customer experience in mind, encouraging the discovery of the brand’s new collections.”

    A&F and Abercrombie Kids brand president Stacia Andersen says she hopes customers old and new will rediscover what is at the core of the American Heritage brand: “timeless, high-quality clothing you want to live in”.

    “The new A&F store design illustrates a strong brand, with a rich history that is evolving and moving forward. A cohesive material palette, an elevated collection and residential-scale elements enhance the personal, more intimate aspect of the A&F shopping experience,” says architect MJ Sagan.

    In place of the dark, product-devoid entrances more akin to a theme park’s “House of Horrors” than a retail store, the new storefront is transparent and features a metal sculpture of an A&F logo first used in the early 1900s. Inside, there are two shops-in-shops: a fragrance “apothecary” and an area for seasonal capsule collections. There is also a dedicated denim room.

    Mannequins for both genders stand on a concrete platform running from the storefront through the middle of the store, showcasing key trends and ideas for the current season. Throughout the store, the collections are merchandised to inspire the customer and showcase how pieces can be mixed together.

    “Looking to provide a unique and personal shopping experience, the updated layout includes accommodating features such as innovative fitting rooms and omni-channel capabilities,” says the company.

    “The fitting rooms will serve as a comfortable haven from the mall or street, comprising two individual capsules within a larger private suite. This allows each guest to share new looks with a friend or family member while also enjoying privacy. Each suite has thoughtful amenities that heighten the customer’s mood, including separate controls for light and music, as well as a phone-charging dock.”

    The interior features a cohesive palette of modern, tactile materials including cork, bronze, galvanised steel, concrete, “vegan leather”, wood and marble that act as a neutral but complementary background to the collections.

    And that obnoxious olfactory assault that is a trademark of A&F will – thankfully – be laid to rest: “The store will be subtly scented with a lighter, cleaner, gender-neutral fragrance.”

    Store staff members will help shoppers place and pick up online orders in store, and cash wraps will be located throughout the space rather than hidden in a back corner, which was a challenge for first-time visitors to find. Clearly, A&F realised it was too hard to find the register in the old store format, its statement conceding the new approach will “enable a quicker and more accessible checkout experience”.

    Gilly Hicks in comeback

    Meanwhile, A&F’s Hollister Co brand says it has relaunched its intimates brand, Gilly Hicks, in all Hollister stores across the US and will sell it globally online at HollisterCo.com.

    Gilly Hicks, “the brand to start and end your day with”, includes bras, bralettes, undies, swimwear, loungewear and sleepwear. The company launched the brand in 2008 and built a network of 28 exclusive stores, but these were closed in 2013. An online store was rolled into Hollister two years later.

    “We recognised an opportunity to redefine the Gilly Hicks brand, and we know our Hollister customer will enjoy another destination for fun and cozy bras, undies and sleepwear,” says brand president Kristin Scott. “We’ve designed our Gilly product to be effortless and comfortable to align with our customer’s on-the-go, busy lifestyle.”

    Some US stores will host shops-in-shops to provide “a unique Gilly Hicks brand experience”.

    The Old A&F look...(Image: A&F Canada)

    The Old A&F look…(Image: A&F Canada)

    Lees ook:

  • H&M Conscious Exclusive range made from shoreline waste

    H&M Conscious Exclusive range made from shoreline waste

    Swedish apparel giant H&M has launched a sustainably sourced high-fashion line made from recycled shoreline waste as part of a wider strategy to source more of their products from sustainable materials.

    The line, called ‘Conscious Exclusive’ will include a full collection for women and – for the first time- kids’ pieces. It will be available in 160 stores worldwide from April 20.

    HM Conscious Exclusive

    Marketing material for the new range, including a video below, challenge consumers: “Imagine a world where a dress can have a positive impact on the planet.”

    The products are made using Bionic, a material made from recycled polyester, and is designed to showcase the different ways that sustainable materials can be used to create stylish fashion.

    HM_Conscious_Exclusive_2017_Campaign_Natalia_Vodianova

    “For the design team at H&M, this year’s Conscious Exclusive is a chance to dream and create pieces that are both quirky and beautiful. It’s great to show just what is possible with sustainable materials like we have done with the delicate plissé dress made of Bionic,” said Pernilla Wohlfahrt, H&M’s head of design and creative director.

    HM Conscious Exclusive 1

    The campaign is part of a wider strategy that has already seen H&M produce at least 20 per cent of its products from sustainable materials. Also a user of organic cotton, the Swedish brand has committed to sourcing 100 per cent of its cotton sustainably by 2020.

    Supermodel and philanthropist Natalia Vodianova has come on as the star of the Conscious Exclusive campaign, in her first partnership with H&M.

    Lees ook:

    Lees ook:

  • New Look loses market share in tough year

    New Look loses market share in tough year

    New Look’s share of the UK clothing market has fallen to 2.6 per cent for calendar year 2016 – from 2.7 per cent in 2015.

    Stores have failed to drive the necessary footfall to return its like-for-like performance to positive territory, with year-to-date (39 weeks to 24 December 2016) UK like-for-likes are down 7.3 per cent with the likes of Next, Primark and Matalan also finding it tough to grow organic stores sales during 2016. Moreover, weaker sales and significant levels of discounting throughout the year led to a 32.6 per cent decline in underlying operating profit to £111.5 million, bringing margins down 4.2 percentage points to 9.8 pr cent.

    The strength of the online competition has dampened the appeal of New Look’s physical stores.

    The fashion-led product mix, attractive pricing and inspiring shopping experience at the likes of boohoo.com, Missguided and Asos continue to encourage New Look’s core shopper base to browse and shop more online reducing the need to visit physical stores. This shift has benefited New Look’s online platform as has its investment in product styling, delivery options and editorial content.

    The double digit growth in online sales highlights that the problem does not lie with product – it is the number of stores New Look operates and their lack of responsiveness during periods of unseasonal weaker.

    Store closures, enhanced visual merchandising, increased product newness and adapting its seasonal mix and phasing is essential to return like-for-likes to growth and limit the threat of the online pure-plays.

    Honor Strachan

  • Sales up, revenue down for Michael Kors Holdings

    Sales up, revenue down for Michael Kors Holdings

    While retail net sales grew 9.2 per cent to US$836.7 million for luxury lifestyle brand Michael Kors in its third quarter, ended December 31, its revenue decreased 3.2 per cent to $1.35 billion.

    It sales growth was mainly driven by 193 store openings since the end of the third quarter, including 143 stores associated with the company acquiring its the previously licensed outlets in Greater China and South Korea. This resulted in licensing revenue dropping 22.9 per cent to $43 million, but revenue in Asia growing 89.1 per cent to $112.3 million.

    At the end of December, the company had 816 retail stores, including concessions, compared to 623 at the same time the previous year. There were also 128 retail outlets run by licensing partners.

    Chairman/CEO John Idol says the company believes Asia represents a $1 billion opportunity over the long term.
    For the first nine months ended December 31, the company saw retail net sales increase 9.6 per cent to $2 billion while comparable store sales fell 6.6 per cent. Wholesale net sales dropped 15 per cent to $1.32 billion. Gross profit eased 2.8 per cent to $2.04 billion.

    “More work to do”

    Neil Saunders, MD of research company GlobalData Retail, says the poor holiday quarter shows that Michael Kors has a lot more work to do before it is back on track.

    “The numbers provide a marked contrast to those of Coach, a company going through a similar brand reinvention, which had a much more positive third quarter. To be fair, the overall decline is partly because of the decision to cut back on distribution through department stores and other channels, which Michael Kors believes have been undermining its brand through excessive discounting, ” says Saunders.

    While the resulting 17.8 per cent slide in wholesale revenues and 22.9 per cent drop in licensing revenues was painful. “We believe the decision to dial back is a necessary step in making the brand less ubiquitous, and driving higher margins.

    “However, the issue is that the reduction in the number of doors through which Michael Kors is available is not immediately translating into an uplift in sales through its own stores. With a 9.2 per cent rise in retail sales, the numbers look robust enough, but most of this is down to store openings and the shops acquired in Asia where Michael Kors bought out the brand licence.”

    Saunders says the underlying comparable sales tell a more revealing story. “These remain weak and have actually deteriorated since the previous quarter. Only a small element of this decline is because of the stronger dollar; indeed, on a constant currency basis same-store sales are still down by 6.4 per cent.

    “As much as we believe that Michael Kors is headed in the right direction, and that its new lines are generating interest, it has much more work to do in reconnecting with customers who have been alienated by the overexpansion of the brand. As yet, it is simply not exciting customers in the same way that Coach or Kate Spade are. ”

    Saunders says that reconnecting customers with the brand is particularly important as Michael Kors expands its range.

    “The new Access smartwatches and fitness trackers, and the new fragrance lines are sensible additions to the portfolio. However, they will only really drive sales as part of a strong lifestyle brand that consumers want to buy into. In our opinion, on this front Michael Kors has more convincing to do. ”

  • Tiffany CEO in shock resignation

    Tiffany CEO in shock resignation

    Tiffany CEO Frederic Cumenal has stepped down, effective immediately.

    Cumenal assumed the role just last April after a long transition to replace previous CEO Michael Kowalski, who is now chairman, Kowalski will take back the role while a search gets underway for a permanent replacement.

    The iconic US jewellery retailer is facing a raft of challenges. Weak holiday sales impacted on its share price, its top designer departed three weeks ago and turnover in its flagship store in Manhattan has been impacted by increased security procedures for the neighbouring Trump Tower.

    Abroad, tourist spending has slumped and the high US dollar value has impacted on sales revenues in its native currency.

    In a statement, Tiffany was complimentary about Cumenal.

    “On behalf of the entire board…, I would like to thank Frederic Cumenal for his contributions to Tiffany,”Kowalski said. “At a time of continuing challenges in the global luxury market, Frederic has enhanced the management team and taken important steps to position Tiffany for success in the long term. We wish him the best in his future endeavors.”

    Kowalski said the board was disappointed by recent financial results, but remained committed to its current core business strategies.

    “The board believes that accelerating execution of those strategies is necessary to compete more effectively in today’s global luxury market and improve performance. As such, we remain focused on enhancing the customer experience, increasing the rate of new product introductions and innovation, maximising marketing effectiveness, optimising the store network, and improving our business operations and processes, all while efficiently managing our capital and costs.

    “We believe these initiatives and the pace of their execution are key to driving shareholder value,” he said.

    Cumenal said he had great confidence in Tiffany’s brand, strategic direction and people. “I believe the company will have many exciting opportunities in the future.”

    Lees ook:

  • Waterstones faith finally changes

    Waterstones faith finally changes

    UK bookstore chain Waterstones has posted its first profit in seven years.

    The return from the red comes after the company reviewed its network, closing six stores and opening seven. It has invested £9 million over the last year (on top of £8.3 million in 2015) to refurbish stores, including opening cafes in 46 of them.

    Mostafa Abd El Haleem, an analyst with GlobalData, says the cafes allowed the retailer to differentiate itself from its competitors.

    The return to profit also reflects a recovery in the book market after a period when it struggled to compete with online retailers and the growth in eBooks.

    “Waterstones has widened its product offering, benefiting from the growth of children’s books, seeing a 25 per cent rise in sales since 2010, with titles from Patrick Ness and Katherine Rundell performing particularly well,” says El Haleem.

    “The future for Waterstones looks brighter than it has for some time. E-books no longer pose the sort of digital threat that continues to devastate physical music and video sales, as consumers spend less time on e-readers in favour of mobile phones.”

    He said physical book sales continued to grow in the UK in 2016, “and we expect Waterstones to have been a key beneficiary of this”.

    Lees ook:

    Lees ook:

  • LVMH launches incubator division Luxury Ventures

    LVMH launches incubator division Luxury Ventures

    LVMH has launched Luxury Ventures to invest in small and promising fashion, cosmetics or accessories companies.

    LVMH Luxury Ventures will be headed up by group deputy-head of mergers and acquisitions Julie Bercovy and will target companies turning over between 2 million and 5 million euros, the company announced Friday.

    “The aim is to accompany financially the development of these small nuggets to create value,” said a spokesman.

    Luxury Ventures will launch with a starting capital of 50 million euros and invest between 2 million and 10 million euros in target businesses.

    LVMH has also announced a design and manufacturing joint venture with eyewear manufacturer Marcolin in which it will buy a 10 per cent stake. The move is aimed at giving Louis Vuitton greater control of its eyewear brands and represents a shift away from the traditional licensing model. Previously, LVMH contracted Safilo for most of its eyewear brands.

    Marcolin says it will start by making eyewear for the Celine and Louis Vuitton brands from 2018, before taking over other labels in the French giant’s stable.

    Lees ook:

    Lees ook:

  • CEO quits after ‘dire’ Ralph Lauren results

    Ralph Lauren is in worsening trouble after posting a set of holiday season sales figures which one analyst termed “dire” and the loss of its CEO.

    A day after Ralph Lauren results were released showing a 12 per cent decline in sales the company announced its CEO Stefan Larsson will step down on May 1 following disagreements with chairman and founder Ralph Lauren over the direction of the company. The company’s share price fell more than 10 per cent this week.

    “There is no getting around the fact that this is a dire set of results from Ralph Lauren,” observed Neil Saunders, MD of GlobalData Retail. “Not only is the 12 per cent revenue decline a significant step down from the prior quarter, it comes off the back of a very soft comparative from 2016 when overall sales dipped by just over 4 per cent, partly thanks to very unfavorable weather.”

    Ralph Lauren closed its Hong Kong flagship store in Lee Gardens in the last quarter of 2016, part of a global move to streamline its retail channels as it tries to revive sales and profitability.

    But the main reason for the decline, says Saunders is the company’s wholesale vision which he described as “in freefall”. Retail sales were also down.

    “Both things, along with some costs from the transformation plan, have resulted in a sharp net income decline of 37 per cent.”

    He said the departure of Larsson after just over one year in the role in which he was charged with turning the company around gives the impression of a brand in crisis.

    “We believe it signals significant internal wrangling over the future direction of the firm. It also demonstrates the founder’s continued dominance over the business. As much as Ralph Lauren should be respected for his significant achievements, and his undeniable design talent, we are concerned by the orthodoxy of his leadership, under which questioning and fresh thinking are relatively rare. This, in our view, is not the way to reinvent a brand that has clearly lost its way.”

    Ralph Lauren has “lost some of its cachet”

    Analysis of GlobalData Retail’s research shows that over the past two years, there has been a steady decline in the number of shoppers considering buying from Ralph Lauren.

    “The same data also show that the brand has lost some of its cachet, especially with younger shoppers,” says Saunders.

    “There are several reasons behind this slide in popularity. The first is a change in consumer tastes and sensibilities. For a long time, Ralph Lauren, through its various brands, was the undoubted king of preppy cool. That aesthetic is no longer as popular as it once was: and for many consumers it stands for old world, old money exclusivity. Such concepts are an anathema to today’s younger shoppers. To be fair, designs have changed and the latest fall/winter collections are a step away from the preppy vibe and incorporate more ‘democratic’ aesthetics like western and street wear. Unfortunately, because Ralph Lauren is such a strong and distinctive brand, it is hard to shed its historic image.

    “The second issue is that the Ralph Lauren brand has become too ubiquitous and diffused. At the higher end, the brand is carefully controlled and curated, but as it filters down through retail channels, that control is lost. The Ralph Lauren flagship in New York’s Upper East Side is a world away from the selection of random Polo sweaters thrown onto a fixture at Macy’s, and it is becoming increasingly difficult for the two to coexist without causing brand confusion.”

    While Saunders acknowledges the brand is taking steps to remedy the problem of ubiquity, with Ralph Lauren becoming more selective about the channels it sells through, to work economically it must be counterbalanced with a step up in the retail side of the business.

    “Those uplifts are not yet coming through, and we see few signs that they will do so any time soon. There is a lot more work to do before retail is back on track.”

    For the sake of balance, it is important to recognise that a strong dollar has affected the Ralph Lauren results, depleting foreign earnings and reducing tourist spend at flagships within the US, he said. “However, this simply does not explain away all the declines; even on a constant currency basis, Ralph Lauren’s sales and profits are tumbling.

    “Ralph Lauren has made some progress, and does have a general sense of the direction it wants to move in – a direction that we believe is broadly sensible. However, execution has been extremely poor, and will not be improved by management squabbling or the absence of key executives. As such, the year ahead is likely to be another one of treading water rather than of significant progress.”

     

    Lees ook:

    Lees ook: